A Smart Card Based Internet Micropayment Infrastructure: Technical Development and User Adoption

As online shopping services proliferate, the need for a secure and convenient payment infrastructure becomes critical. While credit card payment has become common for online purchases, a payment solution has not yet been developed that can be used to support transactions involving a monetary value in the range of a few dollars or even cents. In this study, the authors report their experience in developing a smart card based micropayment infrastructure in collaboration with a major bank. The infrastructure makes use of Mondex, a cash card standard adopted by major financial institutions worldwide. The infrastructure provides a platform to support online transfer of Mondex value over the Internet. Unlike other cash card products, Mondex is the only standard that can support card-to-card transfer without a mediating party. The transactions are immediate and anonymous. This article outlines the technical approach used in the development of the infrastructure and presents a behavioral adoption model to identify and assess factors that may affect its adoption. The findings indicate that the use of the adoption model in the early stages of product development can provide valuable insights to a development team. Theoretical contributions and practical implications specific to the Mondex Internet micropayment infrastructure are also discussed.