|Sun Apr 14 2013 17:42:23|
Is PayPal Ending Micropayments Pricing?
By: Ina Steiner
| Rumors abound that PayPal is ending its micropayments service, which allows online sellers an affordable way to process sales of low-priced items. If true, it would be devastating for sellers not only on eBay, but on all marketplaces and websites where they use PayPal to sell low cost goods. |
PayPal launched micropayments payment option in 2005, which charges merchants 5 cents plus 5 percent and is geared to merchants who process a high volume of small transactions.
In 2010, PayPal launched a new service called Micropayments for Digital Goods specifically for digital goods, such as content (articles, for example) and games, and offers integrated website tools to qualifying digital good merchants.
A seller wrote to EcommerceBytes today, "PayPal is apparently ending their Micropayments program (for merchants who process inexpensive transactions.) The website states: "this application will be removed from service starting May 1 2013. The servers will be shut down after June 1 2013. If you have any questions please contact PayPal Labs.""
The seller continued, "Odd thing is, I've seen at least three threads pulled this morning from eBay's Seller Central and PayPal forums, from members seeking information about this change (I was a poster in one of them.)" The blogger Cappnonymous captured screenshots of discussion boards where eBay sellers discussed the issue before eBay deleted the threads.
A seller (or developer) accepting a $2 payment through PayPal would pay 15 cents under the micropayment plan (5% plus 5 cents), and would pay 36 cents with a regular PayPal account (2.9% plus 30 cents).
The MicroPayments page on PayPal says nothing about the end of the program, but a page on PayPal-Labs.com does, leading to confusion.
We're waiting to hear back from PayPal PR to see if the company is doing away with micropayments for sellers, for developers, or both. Developers of mobile apps use the micropayments service to monetize their apps, so it would be a big hit for them as well if PayPal ends micropayments pricing.
UPDATE 4/15/13: PayPal is not doing away with its micropayments pricing plan, the company told EcommerceBytes overnight: "We can assure our merchants that PayPal will continue to offer micropayments pricing. The message on our website is to notify customers that we are retiring that specific webpage, but not the pricing program. We apologize for the confusion this may have caused for our customers."
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