PayPal Lowers Micropayment Fees For Digital Content, Facebook Signs Up

image from www.sourcebookstore.net PayPal is making direct artist to fan sales easier and more profitable with a new micropayment system that lets consumers pay for low cost digital goods in as few as two clicks without leaving the seller's site.  Facebook was one of the first company's to sign on to the new service which, when available later this year, will offer  fees of 5% plus 5 cents for purchases under $12. That's just 10 cents on a 99 cent download sale.

Several additional companies, including Autosport.com, FT.com, GigaOM, Justin.tv, Ooyala, Plimus, Tagged, Tyler Projects and Ustream announced that they are also using the new PayPal micropayment system. PayPal is already one of the leading payment methods for digital goods. The company closed out 2009 with $2 billion of total payment volume for digital goods and reached $1.3 billion in the first half of 2010.

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  1. That is correct. The label will need agreements in place with each place selling the music.
    Its funny how PayPal are making a big deal of micropayments when its been around for ages. The problem with this system is if a label is selling a premium package for say $75 the artist will be overcharged by Paypal by 64%!! It would actually be better to route the payment via their standard payment package
    At Guguchu we have already resolved this issue. It doesn’t matter whether you are selling a single track at 99c or for $100. We always route the payment via the right PayPal channel to ensure the artist maximises profit.

  2. i just signed up for the paypal micropayments for individual downloads from my website. But I had to get a separate account to do so. Inconvenient, but doable. Now I’m going to experiment with a single song vs license download. At least these folks are edging towards serving an increasing market. For overall ease of use and not having to worry about buyer security, it’s hard to beat paypal.
    I just ran into another payment service called ccnow/digital river and it’s got some questionable user reviews out there and more expensive than paypal by about double, but it does serve international sellers. BTW, it seems to me that the above mentioned service takes 15% of every sale, in addition to Paypal fees, so musicians just have to do the math. I’ve opted for a fixed fee with LicenseQuote.

  3. what are these agrmts called that the record companies have with your sites? basic license agrmts? sounds like ur speaking more to some type of contract with Paypal or some other similar payment service.
    u take money. Paypal takes money. artist is left scrambling? i believe the industry should re-focus individual track downloads because its so easy for consumers to get their hands on music this way. ive just been looking for a solution on how money contractual issues are at play here. micropayments are easy for the consumer yes but still tricky for the artist i assume.

  4. I think 10c from every 99c purchase is a bit rich for what is essentially an automatic service. How does Bandcamp make their money this way, or their artists, on single track sales?

  5. Bandcamp charge 15% + paypal fees the same way Guguchu does. The math is simple 99c track – Bandcamp take 15c and Paypal take 10c. 25c in all. Basically 25% all in
    iTunes charges 30% but you have no control over pricing. Also think about it this way. When you sell the track yourself, you get the cash straight away, and if you choose to, you get the customer’s email address to market to them later. With iTunes you’ll never know who your end customer is.
    Want to contact them to tell them about your next gig or your next album release. No chance!

  6. $22 per month for licence quote.
    You’ll have to sell around $100 per month, every month, for that solution to be cost effective. Unfortunately many artists are not.
    $10 album x 10 = $100. Total charges @ 25% = $25

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