PayPal Expands Micropayments Program

Low-cost solution will be available to all eBay sellers.

by staff writer
- Oct 22, 2008

PayPal announced broad availability of a payment solution aimed at reducing eBay sellers' fees for low-dollar transactions.

The program, known as Micropayments, features pricing of 5 percent plus 5 cents per transaction, compared with the typical 2.9 percent plus 30 cents charged for premier business accounts—the most common type eBay sellers use. PayPal says the pricing structure will save U.S. merchants money on transactions less than $12.

For example, under the Micropayments fee structure, fees for a $5 transaction would be 30 cents, while the same transaction under the business plan would cost 44.5 cents.

PayPal originally introduced Micropayments in 2005, but it was available only to selected customers.

"We're happy to announce that micropayments pricing is now available to all accounts worldwide… " notes an eBay Chatter blog post.

Existing PayPal account holders will need to set up a new account to receive the Micropayments pricing. For merchants who sell both low-cost and high-dollar items, PayPal suggests maintaining two accounts and processing to the appropriate account depending on the total transaction amount.

The 5 percent plus 5 cents pricing applies for U.S., Australian, Canadian, European and U.K. currency, with additional fees tacked on for cross-border transactions and currency conversions. Higher fees apply for other currencies.

About the Author

Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.

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