News

Dec 8, 2003
PayPal Announces New Pricing for Digital Music Companies

UNIVERSAL CITY, Calif.--Dec. 8, 2003--PayPal, the global online payment service, today announced new micro-payment processing fees for high volume online digital music companies.

An extension of PayPal's existing payment service for online merchants, PayPal's new micro-payment fees are designed to give the digital music industry a more cost-effective payment solution for downloadable music. The new fees will allow these merchants to process payments at a rate of 2.5% plus $0.09 for each transaction. The reduced fixed fee represents a 30-50% savings compared to the industry's current payment processing rates of approximately 2% plus $0.20-$0.30, which encompasses interchange, processor and gateway fees.

PayPal's new fees enhance the convenience of downloadable music purchases. Customers can buy as many or as few songs as they choose using any payment type -- including credit cards, bank accounts and stored balance. Because of the lower fixed fees, online music merchants can profitably sell music without requiring customers to preload funds to an account, wait for transaction aggregation or subscribe to a service.

"By offering PayPal on their sites, online music merchants will have access to millions of PayPal customers who are experienced and comfortable shopping online," said Todd Pearson, managing director of PayPal's Merchant Services. "And, these buyers benefit from PayPal's standard wallet-like service that gives them the choice, convenience and safety that PayPal brings to online music shopping."

Typically, online music companies license songs from publishers for approximately $0.65-$0.80 and pay fixed payment processing fees of $0.20 to $0.30. But because songs have been sold to consumers for as little as $0.79 or $0.99, online music companies face a challenging economic model. With a fixed fee of $0.09, PayPal reduces transaction costs by as much as 30-50%, making digital music sales much more profitable.

About PayPal

Founded in 1998, PayPal, an eBay Company, enables any individual or business with an email address to send and receive payments online securely, easily and quickly. PayPal's service builds on the existing financial infrastructure of bank accounts and credit cards and uses the world's most advanced proprietary fraud prevention systems to create a safe, global, real-time payment solution. PayPal has more than 35 million account members and is available to users in 38 countries around the world. More information about the company can be found at https://www.paypal.com/.

 
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