SunTrust Banks Inks Deal With Micropayments Processor

SunTrust Banks on Tuesday revealed an agreement with Peppercoin Inc. to incorporate Peppercoin's micropayments software into its bundle of merchant processing services. Chase Merchant Services, a joint venture of First Data Corp. and J.P. Morgan Chase & Co., inked a similar agreement with Peppercoin last month.

The SunTrust and Chase Merchant Services deals highlight the coming of age of small-value transactions. Some 14 million Americans made digital-content purchases of $2 or less in 2004, up from 10 million in 2003, according to market-research firm Ipsos-Insight. In addition to buying digital content through services such as Apple Computer's iTunes, consumers are showing an increased predilection for making electronic purchases at vending machines, fast-food restaurants, and video-game arcades.

Peppercoin has been marketing its micropayments "gateway" directly to merchants since its launch two years ago. Merchants use such gateways to connect to card networks--American Express, Discover, MasterCard and Visa--which authorize and settle transactions. Gateways are typically provided to merchants by banks but can be obtained directly from independent software vendors.