Cents and Sensibility: The Marriage of Online Micropayments and Digital Commerce

September 29, 2005


San Francisco, CA, USA September 29, 2005

Celent estimates that the digital content market will grow to $50 billion by 2009, but online micropayments account for only 2.8% of digital content sales.

In a new report, " ," Celent finds that online micropayments are a very small component of the growing digital commerce market. But online micropayments vendors are repositioning themselves to take advantage of the budding digital content commerce market that will reach $50 billion by 2009.

Online micropayments are just one small piece of the digital commerce supply chain. Online micropayment vendors’ main value proposition is that they fulfill a variety of unique requirements that merchants need to ensure successful digital content commerce. They facilitate online merchandising, billing, promotions, distribution, and financial reporting, all important ingredients in the digital commerce supply chain.

According to Dan Schatt, author of the report and senior analyst at Celent, "Today’s online micropayments vendors are positioning themselves within the natural evolution of e-commerce—promoting an offering, facilitating acceptance of an offering around an online product or search, and creating as seamless a process as possible for purchase and fulfillment. Online subscriptions, promotions, and post-paid billing have all gradually come together in the last few years, giving us a glimpse of what piece of the puzzle online micropayment vendors may ultimately solve."

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Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

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Table of Contents


San Francisco, CA, USA September 29,  2005

Online Micropayments and  Digital Commerce

Return to report Abstract

Executive Summary 3
Online Micropayments in The Age of Reason 5
Market Overview 8
  Creating the Combustion 10
  Pervasive Broadband 12
  Content Ubiquity 14
Vendor Landscape 16
  Online Micropayment Marketplace 16
  Infrastructure Provider 17
  Paypal's Success 18
  The Google Wallet Threat: PPP 21
The Digital Store 24
  Pay Per View, Use, or Trial 25
  Subscriptions 26
  Promotions 27
  Post Paid Billing 27
  Customer Service/Reporting 28
  Sizing Up The Online Merchant or Marketplace 29
Conclusion 30
Objectivity & Methodology 31

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