August 31, 2005, 12:00 AM

PayPal introduces lower rates for digital content payments under $2

PayPal Inc., the online payment service, has introduced new fees that will make the processing of micropayments for low-cost digital goods more affordable.

Kurt Peters

Executive Editor

 

PayPal Inc., the online payment service, has introduced new fees that will make the processing of micropayments for low-cost digital goods more affordable.

Under the new pricing-designed for payments of less than $5-merchants will pay a rate of 5% of the transaction plus 5 cents per transaction, a PayPal spokeswoman says.

That’s a savings of 40% to 60% over the micro-payments processing rate of about 2% of the transaction plus 20 cents to 30 cents per transaction that merchants pay for other types of online payments, including credit cards, PayPal says.

The new rate enables customers to pay for digital content-such as 99-cent downloadable ring tones-a la carte, rather than having to sign up for annual subscriptions or pre-funded payment accounts with digital content providers, the spokeswoman says.

Digital content merchants can choose to process transactions at their current PayPal rate or the new micropayments rate, depending upon which is more economical for the merchant.

PayPal’s standard, volume-based transaction fees range between 1.9% to 2.9% of the transaction plus 30 cents.

 

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