Facebook is adopting a new micro-payment system from PayPal for sales of its Credits virtual currency.
PayPal is already one of the payment methods for Facebook Credits but the new system means that Facebook users won’t even have to leave the site to authenticate their purchase. The new PayPal for Digital Goods, described in a PayPal press release as the “online equivalent of dropping a quarter in the slot to buy a newspaper or play a video game”, offers payment in two clicks in the context of the original page. The new micro-payment service was announced today at the Innovate 2010 conference in San Francisco.
PayPal for Digital Goods, which will be available in late autumn, is priced at 5% plus 5c for purchases under $12 – lower than average. Autosport.com, FT.com, GigaOM, Justin.tv, Ooyala, Plimus, Tagged, Tyler Projects and Ustream have said they would use the service, in addition to Facebook.
Sam Shrauger, PayPal’s vice president of global product strategy, said: “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. 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.”
The lack of a good micro-payment system has been holding back the monetization of digital content for some time. PayPal’s new service, with faster payment and lower fees, could be an important part of the solution, though I hope the company doesn’t end up with a monopoly.