February 1, 2014
Micro-payments’ is a term that identifies transactions of low value; however the exact definition varies considerably by audience. Definition of Micro-payment varies from company to company, and country to country. A micro-payment (in US) is defined as ‘an online or mobile, real-time or deferred, financial transaction below $12 amount' according to PayPal.
1) Amazing growth of digital content and digital media like news, music, videos, etc. (small ticket size)
2) Exponential growth of Mobile app industry (priced at $0.99, $1.99 and so on)
3) Growth of social networks and online gaming communities (small amount credits, perks, virtual currency, etc.)
Global Market Size (Knowledgefaber Estimates)
The Global Micro-payments industry is pegged at $9.8 Billion in 2013. The industry has grown at a CAGR of 23% in the last 3 years. And is expected to grow strongly going forward, to cross $13 B in next few years
Micro-payments are used to charge customers on a purchase-by-purchase basis for a range of digital goods, apps, including access to news content, online music, TV shows & films, mobile recharges and transit payments.
Key Players in the US
Hi Media is a Paris-based, publicly traded company that has been around for 14 years but initially kept its focus in Europe. HiPay offers on the Internet and on mobile a wide range of payment solutions that meet all online monetization issues that companies face, regardless of their size and business sector.
HiPay Micropayment / Allopass: This solution provides 50 ways to monetize your digital goods. Monetize your digital contents on all sales channels throughout the world and increase your earnings thanks to dedicated tools that go further than simple payments such as mobile CRM.
PayPal Micropayments is a new payment option offered for merchants who sell eBooks and other digital products that usually sell for a price of less than $2.00
As for Pricing:
Micropayments are currently available to merchants with Verified Business/Premier accounts who receive U.S. to U.S. transactions, U.K. to U.K. transactions or EU to EU transactions.
TinyPass is a micropayments provider with a strong focus on content businesses. It calls itself Ecommerce enabler for content. TinyPass provides many options for selling premium content. They allow you to: offer pay-per-view for a page, download, or video; sell bundled content packages; charge for a subscription to your site’s content; meter the access, so that you can trigger the pay wall after a certain number of views; or create a tiered membership plan. TinyPass recently raised $3 Mn in a funding round led by Cascabel Management. This brings its total funding to $4.25 Mn
BOKU Inc. is a global, mobile payments company headquartered in San Francisco. The company provides a mobile payments platform and carrier network, enabling consumers to pay using their mobile phone. Boku's platform supports any charge on any device—offline, online; mobile, desktop, console, or Smart TV—whether it's one-time-only, subscription, or top-up. And no matter where they are, no matter what they're buying, our 1-Tap™ authorization allows your customers to pay instantly.
Tap2Pay is an application developed by Text2Pay to serve as a payment solution for mobiles. This software is used by the developers to integrate Tap2Pay widget to the application using a simple Java and API library. Using this Tap2Pay, consumers make single-click payments on mobile websites and within mobile apps on a smartphone.
Text2Pay is a privately held firm launched in February 2011 with Mark Reiken as CEO. The company is backed by mBill. Text2Pay currently has an employee base of less than 50 and is headquartered in New York with offices in Sydney and Brisbane. The company has agreements with carriers in Australia, Canada, France, Germany, South Korea, the United States and nearly 60 others. At the moment, direct-carrier billing is popular with online and mobile gaming providers and one of Text2Pay’s clients successfully using the service is Mobile Media Group.
Fortumo was launched in 2007, aiming to be the most developer friendly mobile payments provider. Mobi Solutions a specialist in SMS based service provider owned major stake in Fortumo when the service was launched. Back in February, 2013 Fortumo raised $10 Mn from Intel Capital and Greycroft Partners to foray into emerging markets, according to Techcrunch. Globally, Fortumo has presence in over 180 countries and has tie ups with over 300 carriers and 92,000 developers. Some of the popular app or game developers who use Fortumo’s direct carrier billing service include Pop Cap Games, Rovio (Angry Birds app maker), EA, Gameloft, Badoo, etc.
Today, Fortumo has tie ups with 30 Chinese app development companies, mostly from the gaming sector. Through Fortumo Expand, developers get to choose which market they would like to enter in. Fortumo also says that the Chinese developers who sign up for the Fortumo Expand program would have access to 23 third party app stores. They would also have access to monthly reports which indicate which emerging markets have the highest revenue potential.
The PaymentPin Payment solutions allow customers to charge purchases on the web and on their mobile phone to their carrier bill, landline and mobile. For merchants, additional payment methods add new revenue streams unlocking segments of new customers.
With PaymentPin mobile payment solution, your customers can charge their purchases directly to their mobile bill using just their mobile number. No credit card info. No bank accounts. No registration. The result? The easiest checkout experience for them. And more sales for you.