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Micropayments Overview

Micropayments -   Overview  -  Recommended Reading

The W3C Ecommerce/Micropayment Activity is now closed.

An major factor in the evolution of the Web is Electronic Commerce: the ability to buy, sell, and advertise goods and services to customers and consumers. One concern in the development of Electronic Commerce on the Web is the trust that can be placed in the provenance, reliability, security and privacy of information available from or transferred over the internet. Another concern is the need for low friction commerce transactions allowing quality and ease of use for consumers, a key factor the future of Electronic Commerce. The potential for global electronic commerce is immense; much of this potential is and will be realized by the continued development of Web technologies. The World Wide Web Consortium, leading the web to its full potential, is therefore concerned with the evolution of Electronic Commerce on the Web. The role of W3C is to focus on core infrastructure technologies for Electronic Commerce and identify common infrastructure needed in this area. W3C is not committed for example in specifying banking systems nor schemas for specific Electronic Commerce applications.

W3C has closed its Ecommerce and Micropayment Activity, but through the following activities W3C is committed to key factors for success in the evolution of Electronic Commerce:


About the micropayments

At the September Electronic Commerce Interest Group Meeting in Brussels, W3C's members expressed their interest in W3C working in the area of Micropayments.

The Working Groups will propose two specifications,  as defined in the Briefing Package "Micropayments Initiation" :

This specification shall provide an extensible way to embed in a Web page all the information necessary to initialise a micropayment.
Likely candidates of the data elements provided are amounts and currencies, payment systems and/or brand and possibly other kinds of information like conditions of the transfer and others. This embedding should be considered in a way to facilitate an intuitive user interface and limited error handling (e.g. in case the original request was not accompanied with a payment). The latter may include practices for embedding payment requests in HTTP error codes.
The API should be able to register and handle multiple wallets. A possible result of this Working Group could be sample code for a "wallet handler".

What is a "Micropayment"?

One important aspect of "micropayments" is that the definition varies with the audience. This page lists a variety of systems claiming to be "Micropayments". All of them are capable of handling arbitrarily small amounts of money. This was never a real problem; the problem is keeping the cost for the individual transaction low. A very practical approach can be derived from the MPTP Working Draft (Micro Payment Transport Protocol, at the IETF). Micropayments have to be suitable for the sale of non-tangible goods over the Internet. This imposes requirements on speed and cost of processing of the payments: delivery occurs nearly instantaneously on the Internet, and often in arbitrarily small pieces. On the other hand, the bottleneck in sales of tangible goods, handling and shipping, sets a lower bound particularly for costs to remain economical.

Why do we need it?

With the rising importance of intangible (e.g. information) goods in global economies and their instantaneous delivery at negligible cost, "conventional" payment methods tend to be more expensive than the actual product. On the other hand, billing for small portions of a product or service reduces the need of security* .

* security is defined here to be the ratio of security cost to protected value

Related Reading :

Micropayments Technology Providers

Please note that online services should be listed here as well: Most of them have at least experience with time-based billing, so "online time" acts as some "intermediate currency".

Other payment related links

Related W3C links

Electronic Commerce Interest Group - Public Policy Interest Group - Security Interest Group

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Thierry MICHEL, W3C Electronic Commerce Activity Leader
Last updated: $Date: 2001/08/31 06:13:14 $