ANTICIPATING MICROPAYMENT GROWTH

Table of Contents

• Index of Figures...........................................................................................................................3
• Index of Tables............................................................................................................................3
• Introduction...................................................................................................................................4
• Defining Micropayments................................................................................................................5
• Micropayment Business Models....................................................................................................6
  • Online Digital Content..............................................................................................................7
  • Mobile Digital Content...........................................................................................................11
  • Coin Operated Micropayments.............................................................................................13
• Enabling Growth..........................................................................................................................14
  • Contactless...............................................................................................................................14
  • Interchange and Transaction Fees........................................................................................14
  • Micropayments and Online Gaming.....................................................................................17
  • Wireless POS...........................................................................................................................18
• Competitive Landscape.................................................................................................................19
  • BitPass.....................................................................................................................................19
  • Click & Buy.............................................................................................................................19
  • PaymentOne............................................................................................................................20
  • PayPal......................................................................................................................................21
  • Paystone..................................................................................................................................22
• Looking Forward..........................................................................................................................23

Index of Figures

• Figure 1: Micropayments grew faster than other single use payment categories for online content from 2003 to 2004...........................................................................................................................8
• Figure 2: Strong growth in online research purchases at the sub-five dollar level........................9
• Figure 3: Greeting cards and credit help were strong growth areas in 2004..............................10
• Figure 4: Mobile micropayments are composed primarily by ringtones and games....................11
• Figure 5: Consumers are increasingly using credit and debit cards to make small dollar payments.......................................................................................................................................12
• Figure 6: Comparing PayPals micropayment and standard transaction fee schedules..............17

Index of Tables

• Table 1: Micropayment processing models.....................................................................................6
• Table 2: Micropayment qualifying interchange rates: MasterCard and Visa..............................15