With Millicent, Digital is out to stake its public claim to an emerging sector of the on-line economy - the micro-transaction.
Micro-transactions, which include all low-cost transactions ranging from fractions of a cent to a few dollars, pose difficulties for commonly used credit-card payment systems now employed on the Internet. The relatively high cost of credit card authorisation and fees make charging low prices for individual transactions impossible.
Micro-transactions are best suited for selling access to information. For instance, Web sites could charge fractions of a cent to view a Web page, or a few dollars per download of applets and software.
Now in a pilot programme in several European markets, the idea behind Millicent is simple. A broker - say an electronic bank - handles accounts, billing, and vendor accounts. Vendors then issue 'scrip' - a form of electronic money - which can be used to purchase content from that vendor only.
Customers purchase a universal form of scrip from the broker and store it in a 'wallet' on their computer. When a user buys content, they actually use the broker's scrip to purchase vendor scrip.
That way, it is possible to confirm if scrip has been used before without the need to connect to a central clearing house. It is faster and cheaper than other on-line payment technologies, which first need to confirm transactions with remote locations.