Tuesday, September 15, 2009

Google Micropayments to Allow Payment from Penny to Several Dollars

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Google Micropayments to be Made Available Soon

In a press release to the Newspaper Association of America Google has announced that it will soon allow merchants to accept micropayments from its Google Checkout..

Micropayments is a new form of earning revenue online by offering say contents to a large volume of subscribers for a very small price per reader. It could be as low as a tenth of a cent per single web page of a book or magazine such as comics.

These innovative ideas for providing micropayment services online are the result of an evolutionary process amongst Internet content providers.

This is just another method for obtaining revenue from contents such as Google Ads (Adsense) by webmasters.

In a micropayment system, as the amount of micropayments continue to accumulate and reaches a predetermined level, that total amount of revenue earned could be paid as one lump sum payment to the webmaster either before or after transaction.

Its a novel form of earning revenue from subscribers for whom the price is ridiculously low

Its already in use in some massively multi player online games (MMOGs)that has no monthly fee.

This is a good way to compensate for the cost of increased bandwidth costs, if the site attracts a large volume of surfers. Unlike radio, Internet cannot cope with huge volume of subscriber, since it puts strain on the bandwidth provided by the host.

That's why sites that depend totally on advertising revenue have failed and the only alternative left is to charge a minuscule amount from each subscriber to overcome the cost of bandwidth suffered by the operator because of the popularity of its site.

If this facility for micropayments is to be provided in Google Checkout, then those merchants who provide contents and services would find it convenient to accept payments from cents to several dollars from their subscribers and clients.

The following document has been released by Google to the Press with reagards to its plan to introduce Micropayment facility:

"Micropayments - While currently in the early planning stages, micropayments will be a payment vehicle available to both Google and non-Google properties within the next year. The idea is to allow viable payments of a penny to several dollars by aggregating purchases across merchants and over time. Google will mitigate the risk of non-payment by assigning credit limits based on past purchasing behavior and having credit card instruments on file for those with higher credit limits and using our proprietary risk engines to track abuse or fraud. Merchant integration will be extremely simple."

Way back in 2005 DFC Intelligence made a forecast that revenue from micro-transactions under $5 would reach $1.8 bl by 2009.

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