Research Method

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After having developed a new model for micro-payment for e-tailing applications, and building a prototype of this system, NetPay, we wanted to assess its worth compared to macro-payment systems. We had also developed two models for managing electronic coins ("e-coins") in our NetPay system—managing e-coins in a client-side electronic wallet ("e-wallet"), where the encoded coin information resides on a customer's computer, or in a server-side e-wallet, where the coin information resides on vendor servers and can be exchanged from vendor to vendor.

To carry out an evaluation of NetPay and compare its two e-wallet support approaches to traditional macro-payment based e-tailing payment methods we wanted to assess the characteristics of NetPay-based micro-payment systems from several perspectives. We wanted to assess and understand customer perceptions of using NetPay and the advantages and disadvantages they saw with the system, as well as gain an understanding of the usefulness of the approach for information vendors. Basically, a micro-payment system should provide a lightweight mechanism for paying for online content where there are a large number of payments for quite small units of information (Dai et al., 2001; Hwang et al., 2001; Domingo-Ferrer & Herrera-Joancomarti, 1999). Such a system needs to support both the buying of coins, or electronic money, by customers and per-click debiting of coins by vendors (Furche & Wrightson, 1996). The impact on the vendor system of debiting coins and tracking payments must be light to make the system practicable. We developed a new micro-payment model aiming to ensure light-weight, low-cost e-coin encryption via hashing, off-line micro-payment (a broker server doesn't need to be involved in every transaction made), protection from double-spending and vendor or customer forgery of coins or debits, and anonymous payment—i.e., vendors do not know who customers are (Dai & Lo, 1999). This is achieved by the use of a hashing-based encryption scheme implemented by a central e-coin broker where customers buy coins and vendors redeem coins. Coins are encrypted as chains of complex numbers, and the use of "touchstones" ensures that e-coins can be verified quickly and efficiently. We implemented prototypes of NetPay that augment vendor websites to manage coin debiting on a pay-per-click basis (Dai & Grundy, 2002).

To evaluate this prototype we determined that three types of evaluation would be required: a usability evaluation, to assess the users' perceptions of NetPay-provided features, and to compare these against conventional macro-payment subscription-based payment models (Neilsen, 1992; Preece, 1993). We focused on assessing usability via using a survey-based approach with representative target users of NetPay. A performance evaluation of our NetPay prototype was carried out to determine if adding it to typical vendor web servers would be viable for large transaction loading. Finally, a qualitative assessment of NetPay and conventional macro-payment approaches was done to determine how well our model and prototype compare using some common assessment criteria. We analyze the results from these three evaluation approaches to determine if: (1) NetPay is usable as far as target users are concerned, (2) the performance overhead of NetPay micro-payment would be acceptable to information vendors, and (3) that NetPay meets the requirements for a micro-payment system for e-tailing applications as outlined above. We describe in detail these evaluations and report on their results at the end of this chapter.

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