One merchant who asked not to be identified says his company is trying to sharpen the relationship with its micropayment vendor, but the results haven't been impressive. For merchants, the one benefit of using a micropayment vendor would be if that vendor had a large member base and attracted customers to the site. But so far, he says, his company's micropayment vendor hasn't generated much traffic for his site. There is also the problem of security. Customers want to be sure their information is secure, and merchants need protection against fraud.
Many micropayment vendors use digital signature technology to ensure the identity of the buyer.
And several, such as eCharge, cover losses from fraud. Although micropayments aren't taking off, there may be some potential leaders on the horizon. PayPal has a new competitor, though. We see them more, if you will, as a Western Union of the Web. The entire micropayment industry has a long way to go before it's a well-defined entity, says Erickson.