Some of these technologies create electronic scrip or digital cash, sometimes called e-cash, for making payments that are too small for credit card transactions.
In micropayment systems allow payments of low value. Low cost for transaction is the main requirement for micropayments. It serves as a convenient alternative to traditional payment arrangements.
Micropayments system involves:
*A buyer/client
*A vendor/data editor
*One or more brokers/intermediaries/billing serves
Encryption and authentication techniques are used to generate strings of data that can handled like currency for making cash payments.
For example, websites like ESPNet SportZone, Discovery Online and The Wall Street Journal Interactive Edition let the people chat with superstars, download video segments or pay for business reports by using digital cash micropayment systems.
An important factor in the evaluation of electronic payment systems is the cost of the overhead involved in collecting payments as compared to the actual amount of money being transferred.
Apart from the overhead costs incurred in the extra transactions required to implement the payment protocol, there is also another set of costs that bank may charge for their services.
What is Micropayment System?
