Micropayment system history

The micropayments technology allows low value payments beside low-cost. In the history of micropayments, two generations are distinguished. The first generations micropayment systems appeared around 1994 when credit cards dominated the online e-payment market. At that time, payments that contained credit card numbers were transferred through communications channels without any security measures.

The developers of these systems primarily aimed at the introduction of the electronic form of cash on the internet.

Such systems aimed at the online introduction of the electronic form of cash, called E-Cash, E-Corns, digital cash, or tokens. They generated E-Cash, or tokens, and provided secure, anonymous and untraceable exchange of them with validation and fraud voidance.

In the late 1990s, more companies and organizations started to develop their micropayments solutions: the World Wide Web Consortium (W3C), IBM, Compaq, and the Carnegie Mellon University, to mention a few.

The second generation micropayment systems emerged in 1999-2000. This type of micropayment system was account based, transferring small amount of money from customer accounts to merchants, similar to banking systems. Typically, there is no charging occurring simultaneously with transaction, Instead, users are invoiced on a monthly basis.
Micropayment system history