An Estimated 45 Million Americans Would Use Their Credit Or Debit Cards For Purchases Of Less Than $5

Survey Reveals Nearly 20 Million Americans Purchased Items Online For Less Than Two Dollars In The Past Year

6 December 2005

Media Measurement

New York, NY -- A comprehensive, quantitative survey on the small payments market was released today at the Third Annual Micro and Small Payments Conference in New York City. The survey found consumers' desire to use credit and debit cards for small payments and micropayments at the point of sale and online is on the rise. An estimated 45 million Americans are willing to use credit or debit cards for purchases of $5 or less, up 23 percent from September 2004. Additionally, nearly 20 million Americans ages 12 and older have purchased something online for less than $2 in the past year, up nearly 29 percent from September 2004 and 350 percent from October 2003.

"Credit and debit cards are steadily becoming a more common method of paying for low-priced goods and services, and not just in the online world," said Matt Kleinschmit, Vice President with global survey-based market research group Ipsos Insight. "This suggests that merchants, retailers and card issuers alike could benefit from increased consumer access to this type of transaction, as consumers appear to be increasingly willing to use credit or debit cards in small payment purchases for a variety of items."

Only seven percent of respondents who would not use credit or debit cards for small payments indicated they find it easier or prefer to use cash rather than a credit card. The survey examined consumers' spending habits for low-priced items, and points to potential new markets for card use. Consumers are interested in using credit and debit cards to pay for coffee and beverages, parking (meters, garage, lot), fast-food/corporate cafeteria items and at vending machines/kiosks.

The survey, conducted by Ipsos Insight and Peppercoin, a payments technology company that enables profitable new business models for low-priced digital content and physical goods, was a scientific, random sample telephone survey of 1,115 Americans ages 12 and older, and has a margin of error of +/- 3 percent.

"Over the past year it has been increasingly obvious that there is a fundamental shift in the payments industry as technology makes it easier for consumers to purchase everyday items in the manner of their choosing," said Mark Friedman, president and CEO of Peppercoin. "Peppercoin's Small Payment Suite lets merchants accept cards for small payments and profit from those transactions. But, importantly, it also provides merchants with built-in loyalty programs - such as pre-paid accounts that live on a consumer's existing credit or debit card - designed to encourage frequent and repeated card use by consumers for small payments." Specific survey responses include:

Growing interest in card use for small payments--When specifically asked to name the smallest size transaction for which they would use debit or credit cards, 21 percent of respondents (representing approximately 45 million Americans) indicated they would use cards for transactions of less than $5. This figure has grown by roughly 23 percent since September 2004.
Identifying the hottest markets--When asked about purchases for which they would be willing to use their cards, more than half of the respondents (representing a potential market of more than 100 million people) indicated they would use credit and debit cards at convenience stores if they could. The other top markets included fast-food (or quick-serve) restaurants/corporate cafeterias (47 percent), transportation (38 percent), coffee/beverages (35 percent) and parking (32 percent).
Frequent transactions--By examining consumer spending habits, the survey sheds light on the most common cash transactions. When asked where they made purchases at least six or more times over the past 30 days, respondents indicated:

Forty-three percent purchased coffee or a beverage.
Thirty-five percent purchased items at a fast-food restaurant/corporate cafeteria. Approximately five percent (or roughly 10 million Americans) purchased fast-food/corporate cafeteria items more than 20 times over a 30 day period.
Eighteen percent purchased items from vending machines/kiosks. Men were almost twice as likely to frequently purchase items from a vending machine as compared to women.

Increasing comfort with online micropayments--Consumers are increasingly comfortable purchasing small-value items from Websites beyond digital music. Approximately 10 percent of those purchasing items for less than $2 online in the past year did so from six or more Websites, up 43 percent from September 2004 and 150 percent from October 2003.
Women increasingly likely to make online micropayments--Today, women are just as likely as men to make purchases of $2 or less online - roughly nine percent of men and nine percent of women did so this year. For women, this represents an 80 percent increase from September 2004, and a 125 percent increase from October 2003.

For more information on this news release, please contact: Julie Goldman or Payal Cudia Schwartz Communications (781) 684-0770 [email protected]

About Ipsos Insight Ipsos Insight is a member of the Ipsos Group, a leading global survey-based market research company. As the company's flagship marketing research division in the U.S., Ipsos Insight provides custom and tracking research to domestic clients as well as U.S.-based multinationals. Ipsos Insight specializes in research for the Consumer Products, Technology & Communications, Financial Services, and Health industries.

To learn more, please visit www.ipsosinsight.com.

About Peppercoin Peppercoin enables profitable new business models for low-priced digital content and physical goods. Peppercoin's small payment products help merchants, banks, and other payments companies build market adoption quickly through a flexible, consumer-friendly approach. Peppercoin integrates easily with existing business models and payment systems to accelerate revenues and increase profits. For more information please visit www.peppercoin.com.

About Ipsos Ipsos is a leading global survey-based market research company, owned and managed by research professionals. Ipsos helps interpret, simulate, and anticipate the needs and responses of consumers, customers, and citizens around the world.

Member companies assess market potential and interpret market trends. They develop and build brands. They help clients build long-term relationships with their customers. They test advertising and study audience responses to various media. They measure public opinion around the globe.

Ipsos member companies offer expertise in advertising, customer loyalty, marketing, media, and public affairs research, as well as forecasting, modeling, and consulting. Ipsos has a full line of custom, syndicated, omnibus, panel, and online research products and services, guided by industry experts and bolstered by advanced analytics and methodologies. The company was founded in 1975 and has been publicly traded since 1999. In 2004, Ipsos generated global revenues of e 605.6 million ($752.8 million U.S.).