Bitcoin Micro-payments

bitcoin-dollar-xsOne problem that Bitcoin addresses is online micro payments. There are typically $0.25 + 2-3% or more fees for merchants. It is 2.2-2.9% + $0.30 per transaction for PayPal transactions (source). I think all internet users would like the freedom to be able to buy something for $0.25 online without giving banks $0.31.

Digital content is a big market that can only get bigger in the foreseeable future. The merchants currently pass these expenses onto the consumers. Merchants would have to charge the customer about $0.51 to make the same profits as a $0.25 sale using paypal or credit cards. For medium payments from companies that make $100,000/month that have $10 items would still be paying over 5% to PayPal or the credit card companies. They could offer the customer 5% off for purchases using bitcoins. I think people can be educated about how much of their purchase goes to the CC’s & Banks. If they choose to pay in Bitcoin, they could be shown the expenses that they saved and it can range from 50% for micro-purchases down to just a couple percent for larger purchases.

It used to be the case that merchants were not allowed to charge customers for the expenses. Recently, litigation for a class action lawsuit forced the government to implement laws to ban this practice (source). Now, merchants are able to attach fees to the consumers purchase. Merchants can utilize this practice with micro-purchases and show customers that they can save over 50% for micro-purchases using bitcoins instead of credit cards!