Coined in the year 1960 by Ted Nelson, the term Micropayments as the name suggest is an online transaction method wherein small or micro payments are made in return for a product or service that is available online. When we talk about Virtual Wallet, it is virtually equivalent to a wallet with digital credit-card details and a digital signature to authenticate the wallet. Though very useful when used securely, Virtual wallet does hold many risks also, the most threatening financially being the risk of credit card fraud.
Advantages of using Micropayment platforms for making online transactions:
1. Safe and higher privacy – Micropayment services are more secure and robust as well as reduce the chances of online theft by decreasing the chances of making actual payments while buying products and services.
2. Third party elimination – When it comes to making online transactions, there is always a third party involved on the merchandiser’s side to make the entire transaction process seamless and successful but when it comes to using MicroPayment platforms, companies could eliminate the need to involve middlemen and attain higher profits in the longer run.
3. Alternative Payment option – As it is obvious, micropayment platforms offer you one more alternative of making online transactions securely along with debit and credit card transactions.
4. Fast and Convenient – By using micropayment systems, the transactions on the merchants’ site can be made easily and quickly by using the credits in the wallet directly.
5. Maintaining Anonymity – Micropayment systems ensure to provide a degree of anonymity between the customer and the merchants ranging from full to partial to no anonymity as required.
6. Increased chances of buying lower prices products: One of the major advantages of using Micropayment platforms is that you can use your virtual wallet for buying goods which are very low-priced as less as 1 dollar.
Micropayment model is available with a Prepay wherein a customer has the privilege to authenticate a merchant to charge their card, convert it into virtual money or credits and use it for making transactions as well as Postpay model which is like pay-as-you-go after making the decision to purchase with microtransactions all clubbed together.