BitPass, the digital payments company out of Menlo Park, is announcing today its acquisition of competitor Yaga. The terms of the deal are not being released. BitPass enables Web sites to charge for digital content, such as downloadable music or PDF’s. Its clients include Microsoft and Disney. Company execs say the acquisition of Yaga, of San Francisco, allows BitPass to broaden its technology into subscriptions and other areas. “It deepens our functionality,” said spokesman Johnny Wong. “We looked a lot under the hood and we saw the opportunity to deepen our services. It wasn’t a lot of money, but strategically, it was a big milestone.”

The check was signed and handed over yesterday (Wednesday), and already the Yaga brand and Web site have been subsumed into BitPass.

BitPass is among a handful of companies, including Peppercoin, hoping to get scale in the still emerging micropayments industry, where transactions are measured in cents and individual dollars. BitPass has taken two rounds of funding, the latest in the fall of 2004, when it raised $11.75 million from Worldview Technology Partners, Steamboat Ventures (the venture capital arm of the Walt Disney Co.), RRE Ventures and others. Prior to that, it had raised $1.5 million from Garage Technology Ventures, Cardinal Venture Capital, Amicus Capital and Constantine Partners.