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Digital Cash & Micropayments
My recommendation is to stay away from these
services for now: they still haven't really
caught on. However we have put them in this
guide due to the enormous amount of hype that
surrounds them, and because in time they'll
become a viable method of accepting payment
online.
The concept of Digital Cash systems is that a
person has a digital wallet, which they fill up
using their credit card. They can then spend
that money either via a digital wallet program
that runs on their computer, or via a special
PIN number. The future of these systems is in
micro-transactions (Micropayments), where a user
might be charged 5 or 10 cents to read an
article or access a Webpage. At the present time
charging people a few pennies to view content is
impractical, but hopefully Digital Cash will
solve this problem within a few years. Another
downside to Digital Cash is that only a small
number of merchants actually accept these
payments - so digital cash acceptance is not
even close to being as common as credit card
acceptance.
At the moment, some of the biggest Digital Cash
service companies are:
Micropayments have been around for quite some
time, but they aren’t widely used by online
merchants. This has caused several micropayment
service companies to close up or halt further
marketing of their services until the demand
increases. As previously discussed,
micropayments are particularly good for sites
that offer online products (documents, music
files, etc.) whose prices range from a few cents
each, to a maximum of around $10. Micropayment
solutions work in the same way as typical credit
card acceptance, except that the amount taken
per transaction is much smaller, so the merchant
keeps a larger portion of the profit.
If a Micropayment service is what your company
needs, check out these sites:
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eTelCharge - Adds charges to your phone
bill
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iPin - Puts charges on your ISP (Internet
Service Provider) bill
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microCreditCard
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Cardis - Click on "The Ultimus Solution"
once you reach their homepage
Escrow Services
Escrow services act as middleman for a payment
transaction. They ensure that the buyer is happy
with the product they've received, and that the
seller gets paid accordingly. This solution
provides the security and trust that are
essential for high ticket items (e.g. domain
names, company buy-outs, etc.) and many auction
Websites.
Here's a step-by-step explanation of how Escrow
services work:
Step 1:
The Buyer pays the Escrow service for the order
with a credit card, money order, check
(business, personal, certified), wire transfer,
or direct deposit.
Step 2:
Once the Escrow service receives the Buyer's
payment, they notify the Seller to go ahead and
ship the merchandise to the Buyer.
Step 3:
After the Buyer receives the merchandise, he/she
then let the Escrow service know that they are
happy with the purchase.
Step 4:
The Escrow service then pays the Seller by
either check or wire transfer into their bank
account.
If the Buyer is not satisfied with the
merchandise, he/she can notify the Escrow
service that the item(s) has been returned to
the Seller. Once the Seller receives the
returned merchandise, they are given a period of
time (usually about a week) to inspect the
returned item(s). The inspection period allows
the Seller time to ensure the merchandise was
returned in the same condition in which it was
shipped. After this inspection, the Escrow
service will refund the Buyer the amount paid,
less the Escrow service fee (usually around $5
or so).
If you’re interested in Escrow services, check
out these companies:
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