14 DAY TRIAL // As expected, PayPal debuted its micro-transactions payments solution. The platform aims to lower the fees and hassle associated with online payments which are aggravated as the value of the transaction goes down.
For virtual goods, online content or any other product which only costs a few dollars, the normal PayPal pricing structure doesn't work. The process itself, which required users to go through several steps was a major turnoff.
“The decision to purchase digital goods and content usually happens on impulse, so the act of paying needs to be as quick as that impulse,” Sam Shrauger, PayPal’s vice president of global product strategy, said.
“PayPal for digital goods is an ideal solution for game developers, newspapers, bloggers, media companies, and anyone who is looking to monetize premium digital content around the globe,” he added.
The need for a micro-payments solution became increasingly evident this year when virtual goods became a major business in the western markets.
Virtual goods had long been used in parts of Asia, but the rise of social games, which depend on sale of virtual goods for revenue, made the model very popular in the US, Europe and elsewhere.
Already, Zynga, the world's biggest social gaming company, accounts for PayPal's second largest chunk of its business. eBay, which owns PayPal, is the payment company's biggest customer.
The announcement was made at PayPal's developer conference PayPal X. Facebook was also present to reveal that it will integrate the new micropayments solution with its virtual currency platform. Facebook already accepts PayPal as a payments provider.
PayPal has long been rumored to be working with Google to add it as a payments option to the Android Marketplace. The Marketplace currently uses Google's own payments platform, Checkout, which is generally considered inferior and is available in less countries than PayPal.
In fact, PayPal has jumped the gun and posted the announcement of the Android Marketplace integration on its blog earlier than scheduled. The announcement has been pulled and the company hasn't said anything official yet.