Online Retail Grows As Micropayments Reappear

Micropayments, typified by the 99 cents that iTunes charges to download a song or the $2.99 users might see on their Cingular Wireless phone bills after buying a custom ring tone, are on a dramatic rise CNET reports.

Internet currency vendors of the dot-com era, companies including Beenz, Flooz and DigiCash, failed to generate enough business fostering micropayments to survive. Fast-forward a few years, and news that iTunes topped 125 million downloads last week is more evidence that digital content may hold the key to unlocking the low end of e-commerce.

Research by TowerGroup indicates that the total market for Internet and wireless micropayments, led by demand for digital content, will increase by 23 percent annually over the next five years to reach $11.5 billion by 2009. While credit card companies and online transaction specialists like PayPal are ringing up bigger sales online, micropayments are getting a boost from digital content sales.

CNET News Article
TowerGroup