Answer to Question 1
Aggregation, direct payment, stored value, subscriptions, and la carte are the five basic micropayment models. Aggregation occurs when payments for a single customer are batched together and processed only after a certain time period has expired or a certain monetary threshold is reached. Direct payment occurs when micropayments are added to a monthly bill for existing services. Stored value refers to up-front payments made to a debit account, and then purchases are deducted as they are made. With subscriptions, a single payment covers access to content for a defined period of time. With la carte, vendors process purchases as they occur and rely on the volume of purchases to negotiate lower credit and debit card fees.
Answer to Question 2
A smart card is an electronic card containing an embedded microchip that enables predefined operations or the addition, deletion, or manipulation of information on the card. Contact and contactless are two types of smart cards. A contact card contains a small gold plate on the face that when inserted in a smart card reader makes contact and passes data to and from the embedded microchip. The contactless card is a smart card with an embedded antenna, by means of which data and applications are passed to and from a card reader unit or other device without contact between the card and the card reader.
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