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Web Development Articles
(August 2000)

Small Change, Big News:
Dime Purchases Online with Credit Cards

WASHINGTON - August 29, 2000 - An Internet technology milestone announced today enables online purchases as small as a dime to be charged to credit cards. The technology is expected to boost revenues for online merchants, help protect consumers from fraud, and create a $22 billion online market opportunity for Web sites seeking new revenue sources.

Virginia-based SKW Technologies, Inc., trading under the name microCreditCard, filed a patent for the transaction software and an aggregation process that will revolutionize credit card micropayments - online payments of less than $8. With it, Web consumers can purchase one article for 20 cents, download one song for 35 cents, or play one game for 25 cents, and charge it all to their existing credit card. By eliminating the high processing costs existing today, online merchants will be able to accept credit cards for micropayments. The company is now seeking venture capital to bring its groundbreaking solution to market.

The technology also is attracting the attention of government agencies addressing consumer fraud issues because consumers do not need to provide any information to merchants. Instead, data is stored once with microCreditCard, which passes on all online charges to the consumeršs credit card. This will boost sales to the 70 percent of consumers who terminate shopping before checking out.

"Web sites selling content need our technology and consumers want our privacy guarantees," said Chris Williams, president and chief technology officer. "As consumers ourselves, this is the win-win solution we wanted."

According to Gartner Group research, 40 percent of online merchants (nearly one million in number) are waiting for just the micropayment solution this new technology offers. In 2001, the global revenue for micropayments will be $22.2 billion, growing to $288.6 billion in 2003, predicts Jupiter Communications. And credit cards are clearly the payment method of choice for consumers, even if not for merchants. Ninety-three percent of all online purchases are made with credit cards.

But compounding these consumer demands are concerns of crime and cost among merchants. Credit card fraud is 12 times more prevalent online than offline and Web merchants often are held accountable. There are also consumer privacy issues to worry about. Last week, the Pew Internet and American Life Project revealed that 84 percent of Internet users are concerned about unknown people and firms getting their personal information and 64 percent worry about hackers obtaining credit card numbers.

microCreditCard vice president and chief operating officer Justin Kayatin explains, "We are the best solution because of our technology and service. We are able to set-up a merchant Web site quickly and at no cost. Online merchants are paying credit card fees that are 66 percent higher than offline retailers. In contrast, microCreditCard only charges for individual transactions and provides added security for both the merchant and the consumer by removing the merchant from the payment process."

microCreditCard has already posted revenue for August and is on pace to sign up 100 Web sites by the end of the year. With realistic market penetration estimates, company executives expect to realize profit within three years and hope to exceed this projection with aggressive marketing targeted at content providers and ASPs. Future strategies also include working with partner PSINet.

About microCreditCard
microCreditCard is a third-party billing system designed to facilitate micropayments and provide value-added services to Web sites and consumers. It markets its solution to online content providers, application service providers and any Web site or Internet business that needs a cost-effective, fast micropayment solution that reduces fraud. The technology uses existing credit cards for online payments while providing increased security and other account options to consumers. microCreditCard is the trade name of SKW Technologies, Inc., founded in April, 1999. The company is seeking to raise additional growth capital. For more information about microCreditCard, visit www.microcreditcard.com.


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