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Monthly Archives: August 2011
If you’re counting on low-value transactions such as selling releases for $8 a pop, or single track downloads for $1 each, PayPal’s Micropayments pricing will help you save big.
With your current PayPal Business account, you’re spending up to 2.9% + $0.30 per transaction. If each transaction is a $1.00 download, PayPal’s cut is $0.33 every time you make a sale. Ouch.
With Micropayments pricing, you pay a higher percentage rate (5%) and a lower fixed transaction fee ($0.05). Using the same example, if each transaction is a $1.00 download, PayPal’s cut is only $0.10 every time you make a sale. Much better!
The good news is that with PayPal for Digital Goods, pricing automatically adapts based on the size of your transaction to charge you the lowest rate.
If you’re selling a $26.00 exclusive release, Standard pricing will apply. If you’re selling a $1.29 digital single, Micropayments pricing will apply. The sweet spot is at approximately $12.00.
When you sign-up for a PayPal Business account, you will be prompted to opt-in for Micropayments pricing (pending the information you volunteer). If you are an existing account holder, it’s worth checking your settings or giving PayPal a call to make sure you’re enrolled. Also, keep in mind that some limitations apply such as country of account origin and premiums on international transactions.
We’ll be keeping an eye on changes to PayPal’s pricing programs to ensure that you benefit from maximum margins on payments processed by PayPal.