Home  › Stats › Audience/Traffic

Micropayments On The Rise

  |  October 11, 2004   |  Comments

A resurgence in the growth of non-cash purchases under $5.

The march towards a cashless society continues. Non-cash payments of less than $5, often referred to as micropayments, continues to rise.

A study of 1,112 Americans aged 12 and older, conducted by Peppercoin and Ipsos-Reid, found 17 percent of survey respondents saying they'd use a non-cash form of payment (credit, debit or charge card) for purchases under $5. That percentage, according to the pollster, equates to some 37 million Americans.

The survey also found more than 14 million Americans made digital content purchases in the past year for less than $2. That represents a 350 percent increase over the previous year (2003 -- 4 million; 2004 -- 14 million). Of the 14 million people who purchased items costing under $2, approximately 1.4 million consumers purchased such items from five or more Web sites.

"In the physical world, we were surprised to see how much value and benefit consumers realize from using credit cards. They want to use them for their everyday purchases," Perry Solomon, VP of strategy and co-founder of Peppercoin, told ClickZ Stats. "Specifically, they want to use them for the everyday purchases that they make many times a month, such as for coffee, fast food, vending and parking. This shows that consumers feel comfortable with the speed, convenience and security of electronic payments."

TowerGroup report released in August reported in 2003, the market for micropayments was just over $2 billion. Tower forecast by 2009, the market would grow to $11.5 billion in revenue, a compound annual growth rate (CAGR) of 23 percent.

Internet and Mobile Micropayments
Revenues, US Market (in billions)
Year Internet Mobile
2003 $1.9 $0.15
2004 $2.8 $0.40
2005 $3.7 $0.80
2006 $4.6 $1.70
2007 $5.5 $2.90
2008 $6.10 $4
2009 $6.7 $4.8
Source: TowerGroup estimates

One area in which micropayments are growing is in the US online paid content market. According to a May study comscore conducted for the Online Publishers Association (OPA) entitled "Online Paid Content U.S. Market Spending Report," micropayments grew 34 percent over the previous year. The largest proportion of single purchase revenue for micropayments on a percentage basis was news (43.8 percent), followed by greeting cards (14.5 percent) and games (9.2 percent). The OPA/comscore report notes despite double-digit increase for micropayments, at $12.8 million in revenue, the share is only a 1 percent of total online paid content revenues.

Proportionality of Single Purchase Revenue by
Price Bracket, Year 2003
Purchase $0 to$4.99 $5 to $49.99 $50 or more
Sports 3.8% 81.0% 15.2%
Research 1.0% 69.0% 30.0%
Personal/Dating 4.6% 89.2% 6.2%
Personal Growth 0.7% 65.2% 34.1%
Greeting Cards 14.5% 64.2% 21.4%
General News 43.8% 49.7% 6.5%
Games 9.2% 84.6% 6.2%
Entertainment
Lifestyles
1.6% 94.0% 4.4%
Credit Help 1.1% 95.6% 3.3%
Community-Made
Directories
0.2% 55.2% 44.6%
Business Content
Investment
1.8% 54.6% 43.6%
Source: Online Publishers Association (OPA)

"On the digital side, we expect, as do the industry analysts, that more and more consumers will buy low-priced content online, with music continuing to lead the way," Peppercoin's Solomon said. "We do, however, expect significant growth in the games and video markets as more and more content providers look to develop pay-per-use/pay-per-view offerings to meet consumers' preferences for flexibility and choice."

ClickZ Live New York What's New for 2015?
You spoke, we listened! ClickZ Live New York (Mar 30-Apr 1) is back with a brand new streamlined agenda. Don't miss the latest digital marketing tips, tricks and tools that will make you re-think your strategy and revolutionize your marketing campaigns. Super Saver Rates are available now. Register today!

ABOUT THE AUTHOR

COMMENTSCommenting policy

comments powered by Disqus

ClickZ Stats delivers stats headlines to your inbox twice a week. Subscribe today!

COMMENTS

UPCOMING EVENTS

UPCOMING TRAINING

Featured White Papers

Google My Business Listings Demystified

Google My Business Listings Demystified
To help brands control how they appear online, Google has developed a new offering: Google My Business Locations. This whitepaper helps marketers understand how to use this powerful new tool.

5 Ways to Personalize Beyond the Subject Line

5 Ways to Personalize Beyond the Subject Line
82 percent of shoppers say they would buy more items from a brand if the emails they sent were more personalized. This white paper offer five tactics that will personalize your email beyond the subject line and drive real business growth.

WEBINARS

Resources

Jobs

    • Customer Service Consultant
      Customer Service Consultant (Bonner and Partners) - Delray BeachBonner & Partners: Full-time Customer Service Consultant Position Who we are...
    • Financial Editor
      Financial Editor (Confidential) - DurhamSIX FIGURE EDITORS WANTED: To enforce lofty NEW editing standards. Easy Conditions Unlikely. Promotion and...
    • Information Processing Specialist
      Information Processing Specialist (Agora Inc. ) - BaltimoreInformation Processing Specialist – The IP specialist position ensures the successful...