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Ars Technica Newsdesk A penny for your bits: micropayments to make a comeback? Posted 11/18/2003 @ 3:41 PM, by Elle Cayabyab Remember DigiCash? Did you have Flooz gift certificates or earn Beenz by shopping online? The e-payment startups of the dot-com boom are no longer around, driven out of the Internet payments business by companies and consumers that expected Web content to be free, and the costs associated with processing micropayments. Times have changed, and with the success of Apple's iTunes Music Store, micropayments are poised to return to e-commerce in a big way. With companies likePeppercoin already in the beta stages of providing these services to content providers as diverse as comics, music, and art, micropayments are back, and its backers hope it's here to stay. "The key is timing and technology," says payment clearinghouse overseer Ron Rivest, who thinks Peppercoin has both right. The company's technical credibility, at least, is not an issue. Rivest coinvented the RSA public-key encryption system, used by Web browsers to make credit card purchases secure. Micali holds more than 20 patents on data security technologies and won the 1993 G? Prize, the highest award in theoretical computer science. Their system uses statistics and encryption to overcome profit-erasing transaction fees; the approach is unique and more efficient than its predecessors. The user interfaces are deceptively simple; in Peppercoin's instance, one simply has to click an icon to charge an item to their account. Behind the scenes, the action gets a little more complicated. Some services deduct purchases from a prepaid account while others deliver content and charge later, e.g., in batches. The difference between the dot-com darlings and today's companies is in its currency; where Flooz and Beenz used a points system to track charges, companies like Peppercoin and BitPass use dollars and cents to state prices, easing the user experience. Despite skepticism about the viability of micropayments, one has but to look overseas to see how it has transformed e-commerce. In Japan, the bulk of mobile content and services are sold by the download. Firstgate Internet's partnership with clients such as British Telecommunications brings in more than $1 million in revenue monthly. Proponents of the technology see a clear path to adoption. Paypal's Max Levchin is quick to note that companies only need to figure out how best to reach the critical mass they will need to succeed past their rollout phases. Who knows - maybe you'll see Ars selling PDFs by the article soon. -- ----------------- R. A. Hettinga <mailto: [EMAIL PROTECTED]> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire' --------------------------------------------------------------------- The Cryptography Mailing List Unsubscribe by sending "unsubscribe cryptography" to [EMAIL PROTECTED]