In E-commerce, Small is the New Big

[mandy]

McDonalds' started taking credit and debit cards for purchases as small as $1 to make customers happier and attract a little new business. But it's had other benefits, too, benefits that show the $1.3 trillian U.S. market for items less than $5 is ready to go electronic...

Meanwhile, microcommerce continues unabated: Americans spent $1.3 trillion last year on purchases that cost less than $5, and 99 percent of that was paid for with cash, according to the TowerGroup. Now, the credit card companies, the most dominant payment method on earth, want a piece of the action. So a variety of new technologies that work with credit cards, not against them, and a new willingness on the part of the credit card companies to reconsider their fee structures, are combining to enable new business models and profit centers based on very small transactions...

It's a step in the right direction, but even the lowered fees aren't enough for some merchants. That's where the third-party micropayment processors such as eBay Inc.'s PayPal, BitPass Inc. and Peppercoin Inc. fit in. These firms have come up with several creative work-arounds that make small payments profitable...

full article: http://www.cioinsight.com/article2/0,154...812,00.asp