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Facebook micropayment tool to enable in-screen purchases

Thursday, 28 October 2010 | By Michelle Hammond

Start-ups look set to benefit from a PayPal plan to introduce a micropayment tool for online purchases to Facebook.

 

 

According to PayPal, the platform is designed for companies selling products such as media, games, applications and music, and will work for deals under $US12.

 

The technology enables customers to purchase items on-screen without having to leave the host media, application or web page.

 

Each transaction will be charged at 5% of the purchase value plus US5c. Andy Jamieson, director of Switched On Media, says this will directly benefit start-ups.

 

“I think it will be interesting for start-ups because with low currency or low value transactions – micropayments – you need to make sure transaction payments are quite low,” Jamieson says.

 

The agency’s head of social media, Hannah Law, says PayPal’s previous payment structure wasn’t very beneficial for smaller purchases.

 

“What the new platform does is enable small businesses to get paid automatically rather than waiting several days for their transactions to clear,” Law says.

 

“The new PayPal system is only a two-click purchase process so it’s far more efficient and faster than the previous model.”

 

“In addition to providing an improved user experience, [the in-screen payment option] facilitates that impulse purchasing.”

 

PayPal says the product is designed to be used across all web-based devices, including mobile phones, and can be built directly into mobile applications.

 

PayPal’s head of mobile Laura Chambers says the company fosters a growth environment for developers looking for new and flexible ways to charge for applications and media content.

 

Chambers says in-application revenue streams are seen as a growth area for app developers looking to create revenue after the initial purchase.

PayPal expects the new micropayment system to be available before the end of the year.

 

In addition to Facebook, several other web-based media companies will be adopting the new product when it launches.

 

Conversations are going on with a number of Australian-based clients including Fairfax Media.