Question

Describe micropayments in detail. Discuss three different situations where micropayments could occur.

Answer 1

Micropayment is the small transaction that happens over the internet. Usually, these payments are less than a dollar and in some cases, it can even be less than a fraction of a cent. The number considered as a micropayment might vary from company to company. The people can buy things online for a very less price these days and not all the companies can process such low payments. This created the need for the micropayment systems and the companies adapted them just to process very small payments. The seller or a vendor will have to create an account with the micropayment service provider and even the customer will have to create an account with them. The vendor can accumulate multiple micropayments until they become a single large payment for the transfer.

The three situations where micropayments could occur are:

1. The customer pays $0.40 to register for an online game

2. The vendor will have to reimburse $0.19 to a customer after thee changes in the order

3. The customer will have to pay $0.33 to get the product delivered soon from the e-commerce company