PayPal Introduces its Micropayment Solution

Keeping good on a promise made earlier this summer, PayPal, one of the most popular online payment providers, announced today the unveiling of a micropayment solution. According to the company, the new product will offer low fees and a seamless integration that “lets consumers pay for digital goods and content in as little as two clicks”.

As we’ve noted before, there are a couple of problems with selling cheap digital goods. For consumers, it’s a matter of time and hassle, while merchants often have to contend with high transaction fees and lost sales. According to the release, “the new solution offers PayPal’s competitive fee structure for micropayments, with pricing at 5 percent plus 5 cents for purchases under $12”.

A number of companies have already signed on, including Facebook,,, GigaOM,, Ooyala, Plimus, Tagged, Tyler Projects and Ustream.

“The decision to purchase digital goods and content usually happens on impulse, so the act of paying needs to be as quick as that impulse,” said Sam Shrauger, PayPal’s vice president of global product strategy

When we first examined PayPal’s proposed solution earlier this summer, there was one feature that was said to be integral to its plan – the consumer would not be required to pay each time, but rather they would spend up to a certain point before receiving a bill. We haven’t seen this in today’s release, but this might be the “two click” transaction PayPal mentions.

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