Is cryptocurrency the future of micropayments?

December 27, 2018
Darya Karatkevich

While online shopping and electronic payments have become commonplace, there’s one thing that is still holding back online transactions. Simply put, transaction fees are too high to fully support micropayments. What are micropayments? The threshold varies, but typically anything under $12 is considered one.

There are lots of cases where there’s a benefit to accepting small payments, and this is a big part of the future of cryptocurrency. Imagine you had a cryptocurrency wallet embedded in your web browser, and you could securely make small transactions with very little friction. This will become a reality soon, and it’s a building block to widespread crypto acceptance.

Transaction fees can be as high as 3% and often also carry a flat fee on top. For instance, PayPal charges 2.9% and $0.30 per transaction, making accepting small amounts virtually impossible without losing money to fees.

In the future, seamless payments in small amounts with cryptocurrency will be possible. Let’s take a look at some of the potential uses for such micropayments.



In media these days, often news sources will place their content behind a paywall to encourage people to subscribe for premium content or to ‘finish’ an article they have already started reading. However, few people choose to pay a large subscription fee where they might pay a small fee for the article.

This exposes them to the premium content, and if they find value they are likely to take the plunge next time and pay a small fee for the very next article. By removing the friction that a large subscription fee presents, the media company increases engagement and ultimately pulls in more revenue.

Media aren’t the only ones that can benefit from these small, efficient, cheap transactions. Content creators can now monetize their content easier without causing similar friction in the form of having to set up a complex payment service.

Facilitating such micropayments through a cryptocurrency-based system could actually help struggling creatives actually get paid for their work.

Vending machines

vending machine crypto

Another challenge for micropayments that cryptocurrency can solve are vending machine controls. For instance, imagine a vending machine that could sell beer cans, but only to those who can prove they are over 21. Without a human stationed at the machine to verify age, how is this possible?

Recently, Civic, a company working on secure identity solutions on blockchain technology, showed a vending machine that could do just that. By scanning a code, a customer could verify age and make the micropayment purchase. This type of verification opens vending machines and online purchases up to even more industries.

The cryptocurrency GoByte is working on a network that can support such small, frictionless yet decentralized payments using DASH. By creating a system of nearly instant transactions, with a very low overhead, it’s possible to accept micropayments and retain profitability.

Charitable donations

charity donation

We hear about large donations quite often, and also of immigrants sending money back home to family. Cryptocurrency helps send money globally with lower fees and restrictions than traditional methods. Most of the world’s population lives on $2.50 per day, making even donations as small as $1 incredibly powerful.

But the same restrictions for processing cost and the high cost of sending money through traditional payment systems (think Western Union) is far too expensive to make sending $1 viable. Imagine a cryptocurrency-based donation system where you can send these small amounts and make a real difference for someone on the other side of the world.

Cryptocurrency-based micropayments have the power to not only make our lives simpler and more convenient, but they can help alleviate poverty around the world. Cryptocurrency can even take things a step further by using smart contracts to ensure that donated money is used for the intended purpose, and not stolen by corrupt foreign governments.

Tipping online

tips box

Imagine reading a really helpful blog post (like this one!) and being able to click a button to leave a small tip. Or being on social media and being able to tip someone who posted really unique and creative content. With cryptocurrency-based micropayments, you could easily leave a tip.

Experts often answer questions online on sites like Quora, and there is another example of where micropayments can be of value. Thanking someone for a helpful answer with a small tip is something that most people would gladly do.

Imagine a button on LinkedIn where you could contact a high-profile executive for a small fee to have them help you with your business. By placing the small barrier of payment there, it protects the executive’s time, and they can be compensated for their expertise. It allows users access to the expertise at a great value.

Spam protection

spam protection

One of the worst things to deal with in the information age is a flood of spam emails in your inbox. By placing a tiny micropayment on each email, only important communication will come through. The reason spammers work so furiously to fill your inbox is that it’s free for them.

Adding even a fractional fee to incoming email will virtually eliminate spam, and those who need to get in touch with you will pay the small transaction fee willingly because everyone will enjoy spam-free inboxes. It will make someone think twice about sending a pointless email as well, making communication more efficient.

The future is now

future micropayments

Companies are already working on cryptocurrency-based micropayment systems. You can already pay for some goods and services in cryptocurrency, and the very nature of the system means it can be designed specifically for micropayments.

One company specializing in these small transactions is BlockCypher. They are working on facilitating micropayments by creating a system to estimate transaction fees before transactions take place. This encourages miners to approve the transactions by increasing confidence in a successful completion.

Micropayments will transform how we transact online, and open up new ways for small payments to be used for incremental services all around the world.

Post written by Darya Karatkevich
Darya is a blockchain market observer with 5+ years of experience as an author and editor for major tech blogging platforms. Her fortes are blockchain technologies and solutions, cryptocurrencies and crypto-related regulations.

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