Micropayments are small payments, typically below $15-$20, made in cash. When made by credit or debit cards, small payments bear the same fixed transaction-processing costs as higher ones. As a result, processing fees paid by the merchant are either acceptable to the banks but too high for merchants to justify, or acceptable to the merchants but too low for the banks to cover their processing costs.

Micropayments represent a huge, untapped market for banks to offer new card products that provide for convenience and efficiency in making small payments. European Payments Council estimates that 85% of all transactions in Europe in 2004 were made in cash, and that cost of cash to the society is 0.5% of the GDP. Visa Europe estimates that 80% of these cash transactions are for less than €15. In the US total consumer transactions below $5 at the physical point of sale in 2003 are estimated to $1.32 trillion (The Tower Group). According to Visa USA out of $8.2 trillion in consumer sales, over $2 trillion are small cash purchases of $25 or less.

Micropayments are also the critical enabler for extending financial services to approximately 80% of the world's inhabitants in emerging markets, who have no bank accounts and typically pay less than $10 in cash per transaction.