

Paypal launches Micro-Payments for online content - JCB_K
https://www.thepaypalblog.com/2011/02/paypal-the-best-way-to-buy-and-sell-digital-goods/

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acangiano
I left a critical comment, but I don't know if it will be approved or not, so
I'll repost it here as well.

This is nice, Carey. Your main problem however was not your cut on small
purchases. You real problem is that most tech savvy users don’t trust you.
PayPal has arbitrarily frozen accounts countless times, so much so that some
people immediately withdraw funds as soon as they reach their PayPal accounts.

Yes, PayPal is not a bank, but it fundamentally acts as one, and my real bank
would never freeze an account withholding my funds because I suddenly deposit
more frequently than in the past.

Unfreezing an account is very complicated and often a lost cause. Dealing with
your customer care department is a reminder that the Turing Test should
probably be used for hiring purposes as well.

That’s a big PR problem you have when you are claiming to be “The Best Way to
Buy and Sell Digital Goods”.

I appreciate your new features, and the fact that you are trying to enable
not-quite-micro payments online.

I would suggest however a change to your policies when it comes to freezing
and unfreezing accounts. Aim for transparency and clear rules, and make an
announcement about these new customer friendly policies. Include a heartfelt
apology to the community for the past “miscommunication”. Have your customer
care team actually pay attention to what the customer is saying, rather than
just copying and pasting boilerplate answers that don’t fit the customer’s
scenario.

Until you do those things, PayPal will just be a necessary evil for those
doing business online.

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travisp
I think these are actually pretty good fees. This makes it actually possible
to sell something for 25 cents and make money. Yes, a good portion will be
used in fees -- you will be giving up 6.25 cents of your 25 cents. But that's
significantly better than traditional credit card pricing, and you still keep
enough of the 25 cents that it shouldn't be the make or break factor (the
volume will be).

It's still not practical for true micropayments, such as charging a penny or
two, but this does make some business models and products possible.

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JCB_K
I think their pricing is too high. 5 percent plus 5 cents for purchases under
$12. An item priced 50ct (used as example in their screenshot), that'd be 15%.
Quite a lot.

~~~
noonespecial
When I first started in ecommerce, it took us a year to get anyone to allow us
to take credit cards, the rate was 28% when it was all said and done, and
minimum transaction fees just clobbered us on any purchase less than $10 or
so.

15% is fan-frikkin-tastic if its really as easy as they are making it out to
be. Then again, it is paypal, so once I've collected about $1000 or so, I'd
expect it to be frozen for no good reason until 2014...

~~~
JCB_K
I do some e-commerce (secondary to our core business) and the fee usually
works out at about 5%...

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zweiterlinde
The term "micropayments" is misleading when the article's canonical examples
are $12 and $19.99.

My idea of a micropayment is about $0.25, so a minimum $0.05 fee is way too
steep.

~~~
bigiain
I dunno, anything over 18c gives you more of the sale than Apple would take
with it's 30% cut through ITMS, and lots of people seem perfectly happy with
that arrangement...

I agree that a useable way of saying something like "give me half a penny to
read the rest of this article" would be nice though..

~~~
zweiterlinde
Completely fair point with respect to the Apple comparison.

In the long run, I envision an enormous amount of economic activity flowing
through micropayments, where everyone is giving/receiving payments based on
their production/consumption patterns. In that world, their rates are too
high. But for the world as it currently stands, it may be ok.

------
thetable
The 5% + $.05 pricing isn't actually new on PayPal. The program has existed
for years, it's just been very well-hidden.

I remember it took us hours and many phone calls with different people there
to get it set up for us. Glad to see it got bumped to more visibility.

------
mgkimsal
I've been using the micropayment account for almost two years - not sure why
this is news except maybe they're now not hiding it? My minimum sale is about
$4, and the micropayment works out better for most sales up to around $12, at
which point I use a different processor. Using the micropayments approach has
saved me a decent amount over the last couple years. Good to see them
promoting it more heavily. What I'd wish is that they would allow you to use
micropayment pricing and traditional pricing on the same account, and simply
give you the micropayment pricing on payments under $12. Not sure why they
can't/won't do that.

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true_religion
I went digging to find out the real details[1].

I really like this: > For each transaction we'll charge you either standard
pricing, or micropayments pricing – whichever is the lower rate.

It takes away the headache of choosing between the two systems while starting
up.

However $12, is the lowest price point you'd want to use the micropayment
model with. And as your volume increases, the 'low price point' drops to $8
with $100,000+ in monthly volume.

Just food for thought.

[1] [https://merchant.paypal.com/cgi-
bin/marketingweb?cmd=_render...](https://merchant.paypal.com/cgi-
bin/marketingweb?cmd=_render-content&content_ID=merchant/digital_goods)

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ladon86
I said I'd update HN on my PayPal experience so here it is.

I've been using this feature (embedded payments) with the microtransaction fee
schedule since last Friday, and have collected around £1,500 with no problems
or account limitations.

I was expecting some limit on my new account, but as I supplied all the
information required (passport, bank statements, the works), everything went
very smoothly and I have to say that the embedded payments system is quite
slick and converts well.

~~~
JCB_K
If I may ask, what's your business? 1500 pounds is quite a lot in such a short
time, for a new service.

~~~
ladon86
No problem! The business is still in relative stealth right now, but it's
basically a way of raising money for charity events, so the high revenue
figure belies the fact that I'll be passing on a majority of the cash to
charity.

We're still in private beta, but we'll publicly announce the service in a
month or two.

On the whole it was a great launch and I'm pleased with how things are going
right now - let's hope it lasts :)

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hopeless
How much money does Paypal funnel through Ireland and yet again this offering
is not available here. Neither is the Website Payments Pro solution ;-(

------
leon_
Processing your micropayments: 5 percent plus 5 cents

Getting your account frozen and your business destroyed over night: Priceless

------
javabuddy
This is really a good news buddy though doesn't seem practical such as
charging in cents :)

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