Micropayment Scheme with Distributed Probabilistic Auditing

Micropayment systems are electronic payment systems that are used for very small payment and for their viability must have small transaction cost. In this paper we propose a coin-based micropayment scheme that uses a probabilistic fraud checking with distributed verification to provide an efficient solution to detect double spending by malicious customers and hence reduces the risk on the merchant’s part. Probabilistic fraud checking is performed by auditing only a fraction of transactions in realtime, and distributed verification is through a network of servers which we will call Fraud Detection Servers(FDS).