PayPal Opens Up its MicroPayment Solution

Two days after Visa announced its acquisition of PlaySpan, PayPal today opened up its micropayment solution to publishers, game developers or anyone else who wants to monitize their online content.

The benefits of PayPal's micropayment solution, compared to traditional payment options, is its two-click, 'frictionless' convenience and tailored pricing structure. 


For publishers  that are looking to monetize their content, the main challenge of converting sales lie in getting customers to go through the full payment process, particularly as this requires them to interrupt their online experience to make a payment.  PayPal's micropayment solution, is frictionless, in that it enables the customer to complete the payment without leaving the content with which they are engaged.  Autosport.com, the online magazine, was part of PayPal's early release and saw a 75% increase in sales after implementing the micropayment system.

A second challenge in making a micropayment system work, lies in getting the pricing structure right.  Due to the fixed price element that most payment networks apply to small transactions, these have proven prohibitively expensive to merchants.  PayPal therefore implemented a micropayment-specific pricing structure - for transactions of less than $12, PayPal charges a flat 5 cents plus 5% of the transaction amount.

Thanks to PayPal and other micropayment solutions of this kind, we should therefore expect our favourite online newspapers and entertainment sites to increasingly look to charge for premium content.