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Paypal’s new micropayment system

Posted by Michael Bloch in ecommerce (Sunday October 31, 2010 )

Earlier this week, Paypal announced it will soon launch a new micropayment system for digital goods.

The company says the system will allow online shoppers to purchase digital goods and content in as few as two clicks and without having to leave a publisher’s web site. Approved merchants can offer a one-click payment experience.

Calling it the “online equivalent of dropping a quarter in the slot to buy a newspaper or play a video game”, PayPal says it will be a faster and more economical micropayments system.

Under the system, merchants will be able to accept payments in 24 currencies and all major credit cards. The cost for merchants using the system will 5 percent plus 5 cents for purchases under $12. Under standard PayPal pricing, a $1.00 transaction would incur a fee of $0.33. With micropayment pricing, it will cost $0.10; so quite a difference.

PayPal for digital goods will be available late fall this year and Facebook has already said it will integrate the system for purchases made via its service. If you want to be notified when PayPal’s new micropayment system is live, send an email to digitalgoods@paypal.com and include your name, phone number, business name and URL.

PayPal trivia: The current incarnation of PayPal dates back to March 2000. PayPal has 73 million active account holders in 190 markets globally. In 2009, the service processed $2 billion in payments for digital goods and reached $1.3 billion in the first half of this year.

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