The SunTrust and Chase Merchant Services deals highlight the coming of age of small-value transactions. Some 14 million Americans made digital-content purchases of $2 or less in 2004, up from 10 million in 2003, according to market-research firm Ipsos-Insight. In addition to buying digital content through services such as Apple Computer's iTunes, consumers are showing an increased predilection for making electronic purchases from vending machines, fast-food restaurants, and video-game arcades.
Peppercoin has been marketing its micropayments "gateway" directly to merchants since its launch two years ago. Merchants use such gateways to connect to card networks--American Express, Discover, MasterCard, and Visa--which authorize and settle transactions. Gateways typically are provided to merchants by banks but can be obtained directly from independent software vendors.