As the micropayment continues to evolve and grow, based on the amount of intangible content that is sold on the Internet, we see the proliferation of the following three distinct trends that will govern the industry:

Increased potential in any given industry means that more players will try to capture their share of the pie. This will occur in this arena as well, as more and bigger competitors will penetrate the market and try to reap the benefits. There is evidence that the biggest possible players are already positioning themselves for the future. According to Card Technology magazine, institutions such as Visa and Bank of America have teamed up to develop solutions for consumers who make small transactions on the Internet. The Visa Cash on the Internet initiative was developed to solve 2 issues. One issue is that of being able to purchase small amounts of relatively inexpensive intangible goods. The second, and probably more important, issue is that of critical mass. Visa is universally accepted by e-commerce enabled sites already, and the roll-out of Visa Cash could quickly be accepted by a high percentage of sites, empowering customers with ease of purchase advantages.

www.cardtech.faulknergray.com/advert/visasupp/html/visa1.htm

The fragmentation of the industry is one of the downsides of the technology to-date, as customers would have to use multiple systems to buy from multiple sites. We see mergers of different systems as imperative to the success of the industry in the future. These mergers will probably occur at lower levels of corporate size, leading up to the ultimate "swallowing" of these firms by the largest banks and financial institutions, as referred to in the aforementioned point.

Two market conditions will lead to this point becoming a reality. First, as more competition enters the fray, price points that these services offer their partners and customers will become more competitive, therefore offering less potential for profit. These systems will increasingly need to try to develop ways to attract partners and add value to their operations through new, convenient and valuable technologies. The second condition that will lower margins will be the availability of increased amounts of content at lower prices, and eventually, at no cost to the consumer. As we have already seen, many content and service sites offer their wares for free, and thereby eliminate the need for micropayment systems altogether. These systems may face difficulty surviving in such a limited market, in which their target is content offered for less than $20, and in the future, maybe less than that.