Micropayments are very small monetary transactions for goods and services that may only be fractions of a cent. One reason for micropayments is to be able to charge a fee for work that is truly in proportion to the size of the work done. Instead of paying an author for a complete book, pay by the word, for example. Though the author would have received thousands of dollars for writing a complete book, the author can now get paid, even when just a few words are written. If the writing of a book were to receive $10,000. and the book was 200 pages in length, it would typically have about 55,000 words. With micropayments, an author could receive pay equal to the rate for which she writes a book but only for a few words at a time. The author would receive $0.18 cents per written word. That would be a form of micropayment. There are many online activities that are ideally suited for this type of financial arrangement.
A company could sell computer processor time by the cycle. A cycle could only last a millisecond and the fee could be $0.0001 cents. The processor could be used throughout the day but only for a few milliseconds at a time. Nevertheless, the thousands of milliseconds could add up to a sizable sum. This type of arrangement, though desirable, never quite worked properly because credit card accounts such as Mastercard and Visa charge a processing fee of $0.30 plus a percent of the amount of the transaction. Even though the amount was very small, there would still be a $0.30 fee which made this type of arrangement difficult to handle with credit cards.
Some companies have tried to find a way around the minimum payment problem by using an account which accumulates fees until there is an agreed-upon sum. Then, and only then can a credit card payment be made. Amazon, Facebook, and Google tried various ways to pay owners for advertisements placed on their websites. There would be very small amounts and often added up to pennies even when the web-traffic was good. Amazon, for example, found it prohibitive to make frequent payments and so Amazon partners were paid a minimum of $25.00 at a time. With bitcoin, each and every payment could be made for the exact amount required with a small mining fee attached to every transaction. Bitcoin might be the solution micropayment opportunities have been looking.