More than 4 million Americans have purchased digital content for less than $2 in the past year, according to a survey of 1200 US consumers age 12 and over commissioned by micropayments start-up Peppercoin.

The most commonly purchased items were ring tones, music, games and articles, with the teen market driving future growth. The survey showed that the most significant factors limiting consumer use of micropayments is the lack of available and compelling content in this price range.

Less than one percent of respondents indicated that security of the transaction was a concern that prevented them from purchasing items online.

The Peppercoin micropayment system, developed as a spin-off from the cryptographic and information security group at MIT, claims to cut the transaction fee on a 99-cent sale from the typical 27-cents to below 10-cents.


At the end of September, Peppercoin raised $4.25 million in its first institutional round of financing from POD Holding and private investors and appointed Robert Kiburz, formerly VP and general manager of the billing and customer care unit at Lucent Technologies, as president and chief executive officer.


Commenting on the survey results, Kiburz says: "The technology is available today to enable cost-effective sales of low-priced digital content and now the most significant challenge is packaging and pricing the content to meet consumer demand."