Browse Prior Art Database

Micropayment Scheme

IP.com Disclosure Number: IPCOM000013249D
Original Publication Date: 2001-Apr-01
Included in the Prior Art Database: 2003-Jun-18
Document File: 3 page(s) / 60K

Publishing Venue

IBM

Abstract

This document describes a system for micropayments, using trusted devices, based on an existing, widely used, very successful system to address the same problem in a different context. In the music industry today, many albums are marketed around the world. Artists are paid not only for each album sold, but also receive a small amount of money for each time it is played on the radio. The SOCAN facts handbook (available online from http://www.socan.ca/en/socan_general/home-handbook.html) describes the system by which they receive this money, through licenses to the radio stations and a network of regional cooperating organizations.

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Micropayment Scheme

  This document describes a system for micropayments, using trusted devices, based on an existing, widely used, very successful system to address the same problem in a different context.

In the music industry today, many albums are marketed around the world. Artists are paid not only for each album sold, but also receive a small amount of money for each time it is played on the radio. The SOCAN facts handbook (available online from http://www.socan.ca/en/socan_general/home-handbook.html) describes the system by
which they receive this money, through licenses to the radio
stations and a network of regional cooperating organizations.

Under this system, a radio station (or independant DJ) pays a fixed amount for its license. The price of this license is based on the expected number of songs, hence the expected number of micropayments required, from the type of thing being licensed (a private party would be a small amount, a year license for a radio station would be expensive). The licensee regularly reports the exact play lists, and the payment organization uses these to pay the artists. The reason that the system is successful is that there is no reason to be dishonest about the actual songs played, since the license costs the same anyway. (In fact, usually only a sampling of playlists is actually analysed, and extrapolated to generate the payout, but that is not relevant to the present discussion.)

The system proposed here involves a trusted device that can be charged only by the management organization. When a payment is required, it decrements its internal money counter, and makes a note of the party that was paid. Eventually, the money will have been used up, and the device will require "recharging'' from the management organization. During the charging operation, the management organization's system will not only update the money counter in the device, but will download the list of payments made since the last charging operation. Under this system, some payments will be lost, and some will be delayed for a long time, but most will eventually make their way to the proper destination. The party receiving payment requires only a registration number, since no data connection is ever required to the management organization, and the only connection to the people making the payments is through their recharging operations.

Since the recharging operations are comparatively infrequent, standard secure transaction systems can be used.

Possible embodiments include newspaper-stand transactions (possibly, a subscription to a newspaper would be a purchase of a particular number of issues. The actual purchases could happen at any stand, and when the subscription is renewed, the newspaper company could distribute payments to the various stands at which the papers were actually collected). Others include train or bus tickets in areas with multiple service providers, "lunch club" cards used for campus areas with multiple food vend...