PayPal to improve buying online

2010-08-13 18:28

San Francisco - PayPal wants to make it easier to buy low-cost digital goods online, whether it's a single article on a news website or virtual items in a video game.

Scott Thompson, the online payment service's president, said on Thursday that PayPal plans to roll out a payment product by the end of the year that helps businesses collect "micropayments" on the web.

Generally, if you want to buy, say, a virtual sword in an online game, you need to first purchase a chunk of credit - perhaps $5 or $10 - that you can then spend on a 49-cent virtual sword on a game on Facebook or other websites.

That's because the costs associated with credit card transactions quickly eat away at the profit a merchant would make on something that costs a few dollars or less.

Thompson thinks consumers want to be able to buy items one at a time, though. And with this in mind, he said PayPal intends to allow purchases in small increments.

PayPal, which is owned by eBay Incorporated, plans to make that work by compiling consumers' transactions. Someone might buy $10 worth of news articles, or goods in an online game, before getting billed by PayPal.

Behavioural change

PayPal thinks this will appeal more to consumers while benefiting merchants and PayPal, too.

Online micropayments are not new. They emerged in the 1990s but never really caught on, in part because early attempts often had people spend tiny amounts of money - a dime here, a quarter there - instead of the currently popular model where you buy a bunch of credits up front and use them a little at a time.

But consumers are now much more used to the idea of buying virtual goods in online games and downloading content like songs and videos, and this change in behaviour could benefit PayPal.

PayPal is already involved in the digital payment space. Last year, $2bn of its total $71bn in payment volume came from digital goods such as downloads of music, videos and software people bought online.

And it seems to be growing: In the first half of this year, the company processed $1.3bn in digital goods payments, Thompson said.

The company has gotten its feet wet in the world of micropayments, too, offering merchants a micropayment option that websites can use, charging a fee of 5% plus 5 cents for small transactions, which it sees as generally less than $10 apiece.

Convenience

This way, a $3 micropayment for a news article would cost the merchant 20 cents in transaction fees; under PayPal's normal fee schedule for items that cost up to $3 000, it would cost about 39 cents.

Still, Thompson thinks the upcoming payment product will be better, and hopefully more convenient, too.

Right now, if you use PayPal to buy items in an online game such as Zynga's popular FarmVille, you're still prompted to leave the game mid-session to make the actual payment. Thompson wants to change this with PayPal's upcoming offering.

"The whole intent is to keep you in the experience, don't force you to do anything else ... and keep it economical for all parties," he said.

- AP

Read more on:    paypal  |  internet  |  technology
NEXT ON NEWS24X

Read News24’s Comments Policy

 

Inside News24

 
 

Cope: Zuma must listen to religious leaders

The Congress of the People on Monday called on President Jacob Zuma to listen to religious leaders calling for him to come clean on the Nkandla saga.

 
 

Latest elections multimedia

Why Jack Parow wants you to vote on 7 May
The ad the SABC doesn't want to air
Elections 2014 in one cartoon
This year's election posters
 
Traffic
Lottery
 
  • Monday Sir Lowry's Pass - 12:58 PM
    Road name: N2 Westbound
    EXPECT DELAYS due to high volumes
  • Monday Somerset West - 12:58 PM
    Road name: N2 Westbound
    EXPECT DELAYS due to high volumes
 
More traffic reports...
 

Jobs in Cape Town [change area]

Property [change area]

Travel - Look, Book, Go!

Escape winter, head to Mauritius

Escape winter by spending 7 nights in Mauritius' tropical bliss from R13 215 per person sharing. Includes return flights, airport transfers and accommodation. Book now!

Kalahari.com - shop online today

Get many eggs in one basket!

Gaming bundles: 2 Super Hits games for R99, 3 Disney games for R99 and more + exclusive accessory bundles only available on kalahari.com. While stocks last. Shop now!

25% off bestselling books!

The Real Meal Revolution by Tim Noakes, Jeffrey Archer’s Be Careful What You Wish for, Man’s Search for Meaning by Victor E. Frank and many more titles. Shop now!

Up to 25% off electronics

Buy top electronics and save up to 25%. Such as kalahari.com’s 1# selling product the gobii eReader, Patriot X Porter flash drive, Asus Nexus 7” 3G tablet, Samsung Galaxy SIII, Lenovo G580 Notebook and many more. Shop now!

DStv HD PVR Decoder now R949

The DStv HD PVR Decoder has further revolutionised the television experience with lifelike viewing, sharper images, more vibrant colours and precision picture quality. Now R949, save R550. Offer valid while stocks last. Shop now!

Up to 30% off appliances & homeware

Save up to 30% on appliances and homeware this Easter! Offer valid while stocks last. Shop now.

OLX Free Classifieds [change area]

Samsung Galaxy s4

Mobile, Cell Phones in South Africa, Western Cape, Cape Town. Date October 24

Best bargain in big bay

Real Estate, Houses - Apartments for Sale in South Africa, Western Cape, Cape Town. Date October 25

VW Golf 6, 1.6 Trendline (Excellent condition)

Vehicles, Cars in South Africa, Western Cape, Cape Town. Date October 25

BlackBerry Bold 9790

Bold Design The BlackBerry Bold 9790 smartphone combines the iconic BlackBerry...

From R2979.00

I'm shopping for:

Horoscopes
Aquarius
Aquarius

There may be a break through, either through quiet contemplative time to connect to your deep side or forced on you by...read more

There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.








Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.