PayPal is launching a micropayments platform that will allow consumers to purchase goods and content online. Facebook is the top shelf customer among GigaOm, Ustream and FT.com.
PayPal Oct. 26 said at its developer conference it is launching a
micropayments platform that will allow consumers to purchase goods and content
Facebook is PayPal's marquee customer for PayPal for digital goods, which
when it launches later this year will enable the payment platform's 90 million
users to pay for games, music or video content from Websites in two clicks.
PayPal also counts Autosport.com, FT.com, GigaOM, Justin.tv, Ooyala, Plimus,
Tagged, Tyler Projects and Ustream as customers already using its PayPal for
digital goods platform.
Speed to payment is the key here, as PayPal has learned from years as eBay's
payment engine that consumers who find paying online frustrating will abandon
"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," said
Sam Shrauger, PayPal's vice president of global product strategy, in a statement
Pricing for the platform is 5 cents plus 5 percent of the transaction for
purchases under $12. Publishers and merchants get paid automatically rather
than wait several days or weeks for transactions to clear.
Facebook COO Sheryl Sandberg appeared on
stage at PayPal's developer conference in San Francisco
to say that Facebook will use PayPal's new platform to enable consumers to
purchase digital goods on Facebook.
PayPal's partnership with Facebook builds on the companies' existing
arrangement; Facebook leverages PayPal to let its 500 million-plus users buy
its Facebook Credits virtual currency for digital games and goods on the
Virtual goods have emerged as a major economic force on Facebook, where
players of games such as Zynga's Farmville or Mafia Wars may purchase virtual
tools to help them advance in their gaming experience.
Google was so enamored of Facebook's success with Credits that it acquired
virtual currency startup Jambool to flesh out its
Google Me social software strategy.
This healthy rivalry means reliable payment platforms such as PayPal are in
fine position to build secure software for companies looking to sell virtual
goods. PayPal is also expected to provide
paying punch to Google's Android Market soon.
PayPal concluded 2009 with $2 billion of total payment volume for digital
goods and reached $1.3 billion in the first half of 2010.