R. Parhonyi

Second generation micropayment systems: lessons learned

In the next years the market for low value products such as online music and videos and the role of micropayment systems for selling such products are expected to grow substantially. The first generation micropayment systems appeared around 1994, with systems such as eCash, MilliCent and CyberCoin. These systems were unable to gain market share, however, and disappeared slowly in the late 1990s. The second generation micropayment systems appeared around 1999-2000, and are still operational. In this paper we present an overview of first and second generation micropayment systems, and compare their key characteristics to determine their success or failure. This paper explains why the first generation systems failed and concludes that second generation systems have a better chance for success than their predecessors.

The Fall and Rise of Micropayment Systems

In this article, we discuss the chance that the second generation systems will become more successful than their predecessors and to what extent do these sys-tems solve or avoid problems causing the failure of the first generation systems. We show that most failure causes are avoided in the second generation, and con-clude that these systems have a much better chance to be successful than their predecessors.

A provider based accounting architecture

The paper presents a novel content accounting architecture. Content accounting is becoming increasingly important since it is anticipated that in the near future more billable content will be published on the Internet. The presented architecture has a distributed functionality and an innovative view with respect to the payment system that is incorporated. The architecture enables outsourcing of the accounting functions. In particular, it is shown how Internet service providers can be involved in the billing function. The proposed payment system is applicable worldwide and allows online, instant and small payments to be made for a number of content types and units. An important characteristic of this payment system is that customers can always use the same payment mechanism regardless the expectations and requirements of the other (paid) party.