paypal announces new micropayment system

[mouser]

http://www.shareholder.com/paypal/releaseDetail.cfm?ReleaseID=171765&Category=US

could be good news for donation based sites that want to accept small payments without incurring high processing fees.

from slashdot article today: http://slashdot.org/articles/05/09/06/128245.shtml?tid=98&tid=187

[Carol Haynes]

Interesting pricing structure. Can't quite see how it is going to work. Does the item price have to be less than $2 or the total payment?

If it is the total payment it isn't very good from a sellers point of view as there is basically a 10% transaction fee - which to my mind is quite heavy.

[mouser]

i think its total payment.

10% might sound heavy but its much better than the going rate for transactions under $2.

right now paypal is currently the cheapest rate of all the services i know, and they take a commission of something like 3% PLUS 30 cent minimum.  its the minimum that kills you for such low payments, and paypal is much better than most.  some of the shareware services want to take like $2 minimum.

so the key to micropayment being good for receiver is to reduce the minimum.  since the micropayment is "5 percent plus 5 cents per transaction", thats pretty darn good.