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The biggest obstacle to using credit cards for micropayments is the cost of transaction processing. Typically, a transaction costs 20 cents to a quarter, plus 2 percent to 3 percent of the price of the item being sold. For very inexpensive products, the transaction expense can wipe out any profit.
Peppercoin 2.0 has reduced the transaction expense to less than 10 cents, Solomon said.
With some sophisticated games costing a dollar or more to play, that cost structure is affordable.
The cost reduction is possible, he said, because of a patent-pending method of lumping together individual transactions into one transaction to reduce the cost to the merchant.