PayPal, the global online payment service, today announced new micropayments processing fees for digital goods. The new pricing will provide merchants with a more affordable way to process payments for low-cost digital content such as video games, online greeting cards, news articles, mobile phone content and digital music.

PayPal’s micropayments pricing is designed to give customers the convenience of a-la-carte purchases, such as 99-cent downloadable ringtones, without having to sign up for annual subscriptions or pre-funded payment accounts.

An extension of PayPal’s existing payment service for digital music providers, PayPal’s new micropayments pricing is designed especially for payments less than $2. The new fees will enable merchants to process payments at a rate of 5 percent plus 5 cents per transaction. Because of the reduced fixed fee, merchants can save 40 to 60 percent when processing low-cost payments, compared to the industry’s current payment processing rates of approximately 2 percent plus 20 to 30 cents per transaction.

“The consumer response to a-la-carte pricing for music downloads has clearly shown that customers want to be able to pay as they go,” said Peter Ashley, director of PayPal’s micropayments business. “With our new pricing tier for digital goods, merchants can affordably provide customers with what they are demanding – the opportunity to purchase the content they want without the need to sign up for subscriptions or pre-payments.”

PayPal’s new fees enhance the convenience of downloadable digital content. Customers can buy as many or as few items as they choose using any funding method – including credit cards, bank accounts and stored PayPal balances.

PayPal’s new micropayments pricing will complement PayPal’s standard, volume-based transaction fees, which range from 1.9 to 2.9 percent, plus 30 cents per transaction. Digital content merchants can choose to process transactions at their current PayPal rate or the new micropayments rate, based on whichever is more favorable to their businesses.

More here.