PayPal Offers Payments for Digital Goods

POSTED October 27, 2010

SAN FRANCISCO -- At Innovate 2010, its second annual developers conference, PayPal announced the upcoming availability of PayPal for digital goods, a new in-context, frictionless payment solution that lets consumers pay for digital goods and content in as little as two clicks, without ever having to leave a publisher's game, news, music, video or media site. The online equivalent of dropping a quarter in the slot to buy a newspaper or play a video game, PayPal's new solution solves a key problem for the digital goods industry by offering a faster, safer and more cost-effective way to send and receive micropayments globally.

The new solution offers PayPal's competitive fee structure for micropayments, with pricing at 5 percent plus 5 cents for purchases under $12 -- lower than the fees typically charged by payment processors in the digital goods industry. Every time a customer purchases content, publishers and merchants get paid quickly, giving them fast access to their funds. PayPal for digital goods will be available late fall this year.

Facebook Chief Operating Officer Sheryl Sandberg announced at the conference that Facebook will integrate PayPal's new digital goods payment flow to make PayPal the way to make purchases on Facebook.

Several additional companies, including Autosport.com, FT.com, GigaOM, Justin.tv, Ooyala, Plimus, Tagged, Tyler Projects and Ustream announced that they are also using PayPal to monetize the growing opportunity in digital goods.

"Our readers want their news on demand, whether they're on a laptop, a mobile phone or a tablet," said Mary Beth Christie, head of product management at FT.com. "PayPal helps us provide the experience our customers expect, along with flexibility to experiment with payment mechanisms for subscriptions. This gives our customers the flexibility to pay for what they want, when they want."

"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," said Sam Shrauger, PayPal's vice president of global product strategy. "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."

Because PayPal for digital goods is built on PayPal's sophisticated fraud prevention engine, developers don't have to worry about building the systems required to protect customers' sensitive financial information. PayPal is already one of the leading payment methods for digital goods, giving merchants global reach with 90 million accounts in 190 markets around the world. 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.

PayPal also announced the availability of Mobile Express Checkout, a secure two-click checkout experience on a mobile device. Consumers will have the ability to opt-in and remain logged in across apps to make purchasing even faster. The solution is easy to deploy for any merchants who already have Express Checkout on their online stores. Beta merchants have reported double-digit sales growth on their mobile stores after adding Mobile Express Checkout.

Starbucks plans to use Mobile Express Checkout for quick and easy reload of Starbucks Cards directly from its Starbucks Card Mobile app for iPhone and iPod touch users.

PayPal said VeriFone will be joining the PayPal developer ecosystem and will be the first device manufacturer to collaborate with PayPal to offer merchants the ability to take credit card and PayPal payments anywhere using its PAYWare mobile merchant app. The new service will also let customers "bump to pay" using functionality from Bump Technologies built into the PayPal app and the PAYWare app. This will allow the millions of PayPal merchants who have both an online and offline presence to accept payments wherever they happen to be.


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