Australia’s debit card system Eftpos announced last week it was joining the Hedera Governing Council with the aim of running Australia's first micropayments network.

This global network of nodes would aim to bring these micropayments, which are broadly defined as low-cost mini payments from as much as a few dollars to less than a cent, to Australia.

Paypal defines micropayments as any transaction under $12. 


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  • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
  • No withdrawal notice periods or interest rate penalties
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Macquarie Savings Account (<$250k)

  • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
  • No withdrawal notice periods or interest rate penalties
  • Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace
Disclosure
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  • Set up your Pay Cycle and connect your accounts from over 140 financial institutions.
  • Retrace your spending steps into categories with Spending Footprint.
  • Start tapping straightaway with Apple Pay, Google Pay™, Samsung Pay, and Garmin Pay.
  • No monthly or international fees on any of your transactions.
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Save Account

  • Set up your Pay Cycle and connect your accounts from over 140 financial institutions.
  • Retrace your spending steps into categories with Spending Footprint.
  • Start tapping straightaway with Apple Pay, Google Pay™, Samsung Pay, and Garmin Pay.
  • No monthly or international fees on any of your transactions.
Disclosure
400$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Special offer: Savings Accelerator (Kick Starter offer).
  • For a limited time, new ING customers can get a bonus 0.70% p.a. on their savings rate on balances of $150,000 up to $500,000 for the first 4 months. T&Cs apply.
  • If your balance is over $500,000 (but less than $5 million) you will earn the ongoing variable rate of 4.7%
Disclosure

Savings Accelerator

  • Special offer: Savings Accelerator (Kick Starter offer).
  • For a limited time, new ING customers can get a bonus 0.70% p.a. on their savings rate on balances of $150,000 up to $500,000 for the first 4 months. T&Cs apply.
  • If your balance is over $500,000 (but less than $5 million) you will earn the ongoing variable rate of 4.7%
Disclosure
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  • Earn up to 5.20% pa by depositing $1,000 in the previous month
  • No account fees
  • Easy access to your money
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AMP Saver Account

  • Earn up to 5.20% pa by depositing $1,000 in the previous month
  • No account fees
  • Easy access to your money
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  • Deposit at least $1,000+ each month from an external source
  • Make 5 or more eligible transactions
  • Grow your savings balance each month
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Savings Maximiser

  • Deposit at least $1,000+ each month from an external source
  • Make 5 or more eligible transactions
  • Grow your savings balance each month
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Important Information and Comparison Rate Warning

All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of October 14, 2024. View disclaimer.

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Such a network would allow Australians to pay for any number of things over the internet, rather than committing to a subscription. 

For example, a person could pay a few cents or a few dollars or more to access the following:

  • Video content from streaming services or hosting sites
  • News articles from their favourite websites, or from paywalled sites 
  • Music & games
  • Freelance jobs
  • Advertising 

Eftpos CEO Stephen Benton said Eftpos joined the Council after a number of successful proofs of concept last year, and is doing so to meet the future payment needs of Australians. 

"By joining the Hedera Governing Council and running the Australian node, alongside some of the world’s largest and most influential companies, we are excited to participate in the development of next-generation micropayments technology that has the potential to open up entirely new ways of conducting business for Australian enterprises and enable compelling new experiences for Australian consumers," he said. 

“For example, in a world of fast paced technology change, low-cost micropayments [can be used] to pay for internet content or tiny payments for device to device transactions.”

See also: Would you pay with a microchip in your hand? Nearly a fifth say yes

Are micropayments new? 

Micropayments aren't exactly a new concept, although they aren't widely used. 

According to Investopedia, the term dates as far back as the 1960s, when technology futurist and philosopher Ted Nelson coined the term as a way to pay for individual copyrights on online content.

Indeed, this would be one of the main purposes of micropayments.

A 2011 paper by Stanford University stated that "most immediately, micropayments facilitate payment to intellectual property owners who do not get paid when files are shared illegally and help consumers itemise their purchases."

However it also went into detail on why micropayments had yet to catch on. According to Stanford, reasons include:

  • "They are not financially feasible unless a business model or system is developed to handle micropayments"
  • "It may inadvertently cause a change in usage for those who could once access online material and can no longer due to an additional cost"
  • "Security is a major priority, but when companies can keep track of your personal information, every transaction can make consumers apprehensive of making online purchases"
  • "The normal business model of taking a small percentage of each transaction does not work well on transactions of low monetary value" (like credit card merchant fees)

According to Paypal, retailers would have to pay a portion of the fee to the network to enable such payments: 

Micropayment pricing applies to all transactions regardless of the transaction amount. For example, with micropayments pricing, it would cost $0.25 AUD to receive a $4 payment and it would cost $1.05 AUD to receive a $20 payment. 

But generally speaking, the issues raised in that paper are mostly hypothetical, as very few micropayment services exist at the moment, and the first point is exactly what Eftpos is trying to address. 

There is one - a Dutch service called Blendle - that as of 2016 claimed to have half a million registered users in Europe, allowing customers to pay between 10 and 90 cents for a range of news articles and offering a money-back guarantee if they didn't like it.

Blendle

As of today it's still operational, so it must be doing something right. Image source: Blendle. 

With all the recent commotion about the Federal Government taking on Google to make it pay for news content, for example, such a method could perhaps be a viable solution (although some experts have suggested this might not work). 

The end of subscriptions? 

According to Eftpos Entrepreneur in Residence Rob Allen, micropayments are meant to be a seamless alternative to subscription and paywall models in the digital world. 

Subscriptions are a hidden killer for bank accounts: Australians waste nearly $4 billion on unused subscription services every year and pay at least $30 a month for video streaming services.

These bills alone can cost us an average of $140,000 in our lifetimes, and that doesn't even include the cost of things like news or donations to online creators. 

While some people could use micropayments instead of subscriptions, an Eftpos spokesperson told Savings.com.au that it will simply allow a combination of different payment methods to be used. 

"There is a lot of potential here for the development of new business models that appeal to a wide range of consumers, from in-app payments to leveraging the automation advantages inherent in the Internet of Things," they said. 

Provider

4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
  • No withdrawal notice periods or interest rate penalties
  • Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace
Disclosure

Macquarie Savings Account (<$250k)

  • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
  • No withdrawal notice periods or interest rate penalties
  • Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace
Disclosure
000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Set up your Pay Cycle and connect your accounts from over 140 financial institutions.
  • Retrace your spending steps into categories with Spending Footprint.
  • Start tapping straightaway with Apple Pay, Google Pay™, Samsung Pay, and Garmin Pay.
  • No monthly or international fees on any of your transactions.
Disclosure

Save Account

  • Set up your Pay Cycle and connect your accounts from over 140 financial institutions.
  • Retrace your spending steps into categories with Spending Footprint.
  • Start tapping straightaway with Apple Pay, Google Pay™, Samsung Pay, and Garmin Pay.
  • No monthly or international fees on any of your transactions.
Disclosure
400$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Special offer: Savings Accelerator (Kick Starter offer).
  • For a limited time, new ING customers can get a bonus 0.70% p.a. on their savings rate on balances of $150,000 up to $500,000 for the first 4 months. T&Cs apply.
  • If your balance is over $500,000 (but less than $5 million) you will earn the ongoing variable rate of 4.7%
Disclosure

Savings Accelerator

  • Special offer: Savings Accelerator (Kick Starter offer).
  • For a limited time, new ING customers can get a bonus 0.70% p.a. on their savings rate on balances of $150,000 up to $500,000 for the first 4 months. T&Cs apply.
  • If your balance is over $500,000 (but less than $5 million) you will earn the ongoing variable rate of 4.7%
Disclosure
010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Earn up to 5.20% pa by depositing $1,000 in the previous month
  • No account fees
  • Easy access to your money
Disclosure

AMP Saver Account

  • Earn up to 5.20% pa by depositing $1,000 in the previous month
  • No account fees
  • Easy access to your money
Disclosure
010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Deposit at least $1,000+ each month from an external source
  • Make 5 or more eligible transactions
  • Grow your savings balance each month
Disclosure

Savings Maximiser

  • Deposit at least $1,000+ each month from an external source
  • Make 5 or more eligible transactions
  • Grow your savings balance each month
Disclosure
Important Information and Comparison Rate Warning

All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of October 14, 2024. View disclaimer.

Important Information and Comparison Rate Warning

"Many commentators have pointed out that media-related subscription markets are becoming increasingly crowded as new services launch, so it’s logical to assume that micropayments could be a good way for providers to differentiate themselves by offering flexible payment options and attract new customers.”

It will still be important to try and keep costs down, as even small payments can add up quickly if they're easy to make. 

“This depends on the individual businesses’ pricing models, but you can see a situation where a provider could offer both ‘pay as you go’ and subscription packages, depending on whether people want to be occasional or more frequent users," Eftpos said. 

"This would help consumers try new services, manage their costs responsibly, and work out what’s best for them.”

According to Eftpos it is still too early to try and estimate how much certain items could cost.

Ultimately, it will depend on market competition, and how much the consumer is willing to pay. 

Photo by Timothy Muza on Unsplash