Micro-payments

The worldwide mobile commerce (m-commerce) marketplace is growing rapidly, enabled by an increasing use of micro-payments.Micro-payments are payments for purchases costing from about 5 pence to £5, made using a mobile device such as a mobile phone. Phone users register in advance for this service and from that point on they can pay these small bills directly from their phones.

The network operators manage point-of-sale accounting for their client businesses. Customers' purchases are added to their monthly phone bills, or deducted directly from their "pay as you go" accounts.The network operator handles all the direct sale formalities including:customer authentication,payment processing,response processing

While network operators are still the main payment processor, third-party syatems are still being made available that can also process mobile payment (including micro payments). Third-party systems usually charge lower fees than network operators - shop around for the best deal available.

The combination of these services makes it feasible for businesses to handle an extremely large volume of low value sales without needing an extensive chain of retail locations.The initial growth in micro-payments has been in the purchase of items like car parking and cinema tickets. The next major area of growth is anticipated to be in vending machines, where a vast reduction in the need to use and handle coins would bring large benefits.