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Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Sun Apr 14 2013 17:42:23

Is PayPal Ending Micropayments Pricing?

By: Ina Steiner
Sponsored Link
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."



Comments (11) | Leave Comment | Permalink
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Perminate Link for Is PayPal Ending Micropayments Pricing?   Is PayPal Ending Micropayments Pricing?
by: NullApps This user has validated their user name.
       Web Site
Sun Apr 14 22:11:44 2013
I use micropayments on everything under around $12.  I'd hate to see this go.  Hopefully this is just referring to the application that informs people about the micropayments and not micropayments themselves.
Perminate Link for Is PayPal Ending Micropayments Pricing?   Is PayPal Ending Micropayments Pricing?
This user has validated their user name. by: Ming the Merciless
       
Sun Apr 14 23:32:29 2013
Uh oh, investors and analysts!

Another loud and crystal clear red flag that ebafia corp is in deep trouble.

The coming horrendous fee increases for many small sellers weren't enough; no, now they're going to eviscerate small sellers many of whom thought hey actually came out on the long end of the May 1 fee increases.

Can't you just smell the desperation in San Jose?
Perminate Link for Is PayPal Ending Micropayments Pricing?   Is PayPal Ending Micropayments Pricing?
This user has validated their user name. by: Marie
       
Mon Apr 15 09:38:30 2013
@ming

The upcoming new listing fee structure for ebay does not hurt small sellers of lower dollar value items IF that seller has a store.  And most sellers with a store need to upgrade to the next level for the best value.  The new fee structure however is horrible for those that sell anything with a price tag of $85 and up.

But those below that and with a store actually won't see much difference or it is possible they actually may save a little on listing fees and FVFs overall.

Glad to know PP is stopping the micro payment program.  I know some sellers that use it and it would certainly raise their fees significantly.
Perminate Link for Is PayPal Ending Micropayments Pricing?   Is PayPal Ending Micropayments Pricing?
by: Moonwishes This user has validated their user name.
       Web Site
Mon Apr 15 10:38:26 2013
>>I use micropayments on everything under around $12<<

I had always been under the impression that you could be signed up for the micro program or the regular one, but not both. Seems the only way to keep this divided it to have two different PP accounts with two different email addresses for payments AND two different sets of listings(and obviously no combined shipping for multiple purchases). I have many smaller sales as well but have no way to switch between two programs. So to use one or the other depending on price of sale, is the seller breaking the rules (which in my mind is as bad as ebay and all it's rules that it breaks)?

Of course after Ina's PS it is apparently water under the bridge, but that doesn't mean that PP can't come along and cancel the program anytime they wanted to since it is their back yard you are playing in.
Perminate Link for Is PayPal Ending Micropayments Pricing?   Is PayPal Ending Micropayments Pricing?
This user has validated their user name. by: Ric
       
Mon Apr 15 14:26:54 2013
Typical of this company to create confusion and consternation among it's fee paying sellers.

Even more typical is the deletion of related threads on discussion boards.

Both eBay and PayPal becomes less and less transparent on a daily basis as the need to increase revenues on fewer transactions in order to cover outrageous salary and compensation packages bestowed on their C-Level management.

Generating income to cover these multi million dollar compensation increases without lowering profits means sellers can look forward to even higher fees in the not too distant future.

eBay is in imminent danger of having sellers pull listings and discontinue selling higher priced items in order to avoid losing their shirts due to the newly increased fees.

eBay's totally disconnected management simply does not see the forest for the trees. The reduced listing volume for quality higher priced products is going to set eBay's efforts to shed the garage sale image back years while at the same time serving to negatively impact GMV.


Perminate Link for Is PayPal Ending Micropayments Pricing?   Is PayPal Ending Micropayments Pricing?
This user has validated their user name. by: Ming the Merciless
       
Mon Apr 15 15:18:32 2013
@"Marie"

I am fully aware of who the new fee structure affects and how it affects them.

I don't need you to tell me.

Perminate Link for Is PayPal Ending Micropayments Pricing?   Is PayPal Ending Micropayments Pricing?
by: Dusty This user has validated their user name.
       
Mon Apr 15 16:30:01 2013
It's not clear why PayPal needs to post an ''important notice'' in red type to simply retire a webpage.

Based on a post in the PayPal forum today, it's possible what's also being retired is the ability to convert a regular PayPal account to a micropayments account (instead, micropayment accounts may need to be opened as new accounts.)  

I say this because of a post by a forum helper in today's PayPal forum:

(begin quote) ''It's saying that ''this application'' will be removed.  The application appears to be that particular PayPal Labs webpage which can be used to request that your existing Business or Premier PayPal account be switched to micropayments pricing.

The other webpage, which can be used to open a new PayPal Micropayments account, is still available and does not have any ''will be removed'' text...'' (end quote)

If the forum helper’s above post is accurate, it could indicate a change in how you open a micropayments account. If so, PayPal could have made this more clear in their reply to ecommercebytes, and it would have helped to explain some of the confusion.

But I think they generally prefer to be as unclear as possible, so nobody knows...
Perminate Link for Is PayPal Ending Micropayments Pricing?   Is PayPal Ending Micropayments Pricing?
This user has validated their user name. by: Marie
       
Mon Apr 15 18:08:42 2013
@ming

I wasn't lecturing you nor was I trying to insult you.  I was commenting on what you said. I unsure as to why you reacted the way you did. You said in your original post "The coming horrendous fee increases for many small sellers weren't enough..."

Possibly you missed that I stated in my post that small sellers with stores are not going to get hit hard with fees if they choose the right store level for their business needs.

If you feel that statement is incorrect, please share with me what is not quite right.  All of the fees are new, so possibly I misunderstood something or overlooked something.
Perminate Link for Is PayPal Ending Micropayments Pricing?   Is PayPal Ending Micropayments Pricing?
by: roseland This user has validated their user name.
       
Mon Apr 15 21:33:14 2013
@Marie,  Keep your ''lectures'' coming.  I, for one, appreciate reading different members' interpretions as to what is going on. I know I don't have all the answers and I don't know anybody who does so I enjoy reading what other members think.  Not everbody on this site has the benefit of years of experience with online selling so I'm sure there are others who feel the same way I do.  :)
Perminate Link for Is PayPal Ending Micropayments Pricing?   Is PayPal Ending Micropayments Pricing?
This user has validated their user name. by: Marie
       
Mon Apr 15 22:13:28 2013
@roseland

Thank you for taking the time to post that.  I sincerely appreciate it.  So many times a handful of posters get upset with me because I don't constantly slam Ebay.  While I don't like many things that Ebay does, I just don't have the need to continue to slam them at every turn.  Doesn't mean I like what they do sometimes, just means I don't like doing it.

I feel as you do.  Even though I have a great deal of selling experience on Ebay, I love having fruitful debates and information sharing on various threads.  I've learned a lot over the years and I sincerely hope I've been able to help a few along the way.

If you are a seller on Ebay and if you are still having problems figuring out what is your best value with the new updated fees.  Just let me know, I'd be happy to assist.

Remember the FVF changes start at midnight tonight.  The new store fees and features don't start until May 1st.
Perminate Link for Is PayPal Ending Micropayments Pricing?   Is PayPal Ending Micropayments Pricing?
This user has validated their user name. by: permacrisis
       
Mon May 13 14:49:16 2013
Sure wish Philip Cohen were around, I'd ask him what he thought of Cumberland Farms' "SmartPay" card and mobile app ditching PayPal for a direct debit bank account setup. Outstanding!


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