(by Geck Finn)

By 2009, the Internet- and mobile phone-based micropayments market in the US will grow at a 23 per cent CAGR, to USD 11.5 billion in revenues, up from USD 2 billion in 2003, according to TowerGroup. Internet publishing and digital media services drove Internet-based micropayments, or transactions of under USD 5, to USD 1.9 billion in 2003. Mobile micropayment sales in the US market for content such as ringtones similarly totaled USD 0.15 billion in 2003, and TowerGroup is advising US financial entities to build out current payment systems for the emerging markets.

Two new TowerGroup reports, “Electronic Micropayments: Market Development, Issues and the Potential Impact on FSIs”, and “Making Sense from Cents: Trends in the Rebirth of Electronic Micropayments”, outline new trends in the micropayments market. Internet transactions dominate the market, but by 2010, TowerGroup expects competition with subscriptions for online content. Prepaid micropayments are predicted to grow in the Internet and mobile payments spaces, while direct-to-bill options for cell phone payments will expand, as will aggregated billing solutions.