The payment of services, goods or content that costs only a few cents is referred to as micropayment. Micropayment is when clicked items on a website cost only a few cents. Amounts of money between 0.01 euros and 5 euros can be classified as micropayments, although the smallest amounts overlap with picopayments, while larger amounts overlap with macropayments.
Micropayment can be triggered directly by clicking on a chargeable item, but it can also be processed via credit-based systems or via credit-card-sized micromoney cards. When billing online, the customer is redirected to the micropayment system and must confirm the transaction using their login and password. The online store receives feedback from the system about the correct transaction and can deliver the item(s). The settlement amount, which is the sum of many small individual amounts, is settled via so-called payment providers or micropayment providers. The payment provider is responsible for invoicing the customer and collecting the payment.
Retail purchases are comparable. Settlement takes place in a triangular constellation between the customer or buyer, the financial institution or brokerage house, and the provider or retailer. A transfer of funds takes place between the buyer and the financial institution; likewise between the retailer and the financial institution. The exchange of goods, on the other hand, takes place between the merchant and the buyer.
In online retailing, micropayment systems are based primarily on payment by credit card, but payment can also be made by direct debit. One of the best-known micropayment systems is Firstgate. Internationally active micropayment companies have the advantage that they accept different value dates.