In the last few days PayPal has launched its new micropayment solution, allowing digital content publishers to charge for and consumers a new way to pay for digital goods.
PayPal for digital goods allows websites to charge for content without the need for an intrusive payment mechanism. The other key feature is the cut that PayPal themselves make from each transaction, currently 5% plus 5 cents for transactions under $12.
From the PayPal blog:
When consumers pay for online content, PayPal for digital goods allows them to pay in as little as two clicks without ever leaving a publisher’s game, news, music, video or media site… Based on PayPal’s existing security, the service offers a faster, safer and more cost-effective way to send and receive micropayments. PayPal for digital goods still has competitive fees for micropayments pricing of 5 percent plus 5 cents for purchases under $12… As an extra perk, publishers and merchants are paid automatically and given immediate access to their funds, every time a customer purchases digital goods.
You can see an example of how this looks at the top of the page. There traditionally have been a few issues holding back the use of micropayments on websites; firstly, payment mechanisms have traditionally been intrusive, taking users away from the content they wish to purchase. The charges incurred per transaction for the publisher have also threatened to eat into the publishers margin, especially for small transactions. PayPal for digital goods seems to do a good job of solving these problems.
What it still doesn’t solve is users’ expectation of still being able to get most web content for free. That won’t change quickly.
But there is definitely a willingness from publishers to find new ways of monetising their content. PayPal has already signed up some big names to use this solution, such as FT.com and video site UStream, where you could watch today’s England vs Italy rugby game for $19.99.