Satellite communications networks with onboard processing (OBP) can provide interactive satellite communications with very small earth stations over a large area. This brings to small business and residential users a wide range of satellite applications, such as videoconferencing, interactive multimedia, electronic libraries and “Citizen Band Video”, making use of the inherent broadcast function of a satellite. This paper presents an overview of this market potential and of the technical concept of a high capacity OBP system, addressing the implications of the application scenarios and user groups on the OBP system design and implementation. This is followed by a discussion of the user traffic stations and the overall communication control techniques and a presentation of a representative 20/30 GHz payload design.