21 Inc rolls out True Micropayments with Bitcoin


Any two machines or humans in the world can open a channel that allows them to send zero cost small payments. The means a merchant could bill a human or machine for multiple amounts as small as fractions of a cent. Setting up a micropayment channel only costs a few cents, so these make sense when the total amount transacted is around $1. (at current bitcoin price ~$400). 

In comparison, unless you're an Amazon or Google, each credit card transaction costs around $0.30, which makes it impractical to bill for amounts less than a few dollars. Most merchants get around this high transaction cost this by aggregating small amounts and billing customers once a month or once a quarter. The problem with this is that you either have to extend credit to your customers and take the risk that they won't pay, or you have to ask customers to prepay, tying up their working capital. Bitcoin micropayments lets you avoid both of these problems.


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