If you ever tried finding a payment solution for an online micropayment product you can skip the introduction… The existing card based solutions include a per transaction element and therefore have a predefined floor limit, below it, they no longer make any economic sense. Low cost micropayment products are currently not supported (on a “single purchase” base) and must be sold through aggregation or subscriptions.
As the online micropayment industry grows, people are working on alternative solutions, to bypass the credit card associations and enable a true support for a single purchase of online micropayment products.
The solution should have been provided by the credit card associations long ago. A simple micropayment pricing, could solve all of the micropayment industry needs in a second. As of today the associations charge (on most transactions) a fixed 10 Cents per transaction fee. This fee, first calculated and forced long ago, was justified when processing, encoding, saving and backing up transactions was cost consuming. In today’s world the cost of processing a single transaction is insignificant and surely runs below 1 Cent.
The risk embedded in online micropayment transactions is minimal. Micropayment transactions’ amount is immaterial, which automatically lowers the inherent risk embedded in a micropayment transaction to a ridiculous threshold. The nature of an online micropayment transaction lowers the risk even further. 99.99% of online micropayment transactions are digital goods with zero cost and no market value fraudsters can gain for re-selling the downloaded content.
That said, there’s no doubt that the cost structure set by the associations as of today, simply does not meet the micropayment criteria, and must change.
So why does it not? Once showing that the act of processing has long gone below the 10 cents currently charged, the associations will have a hard time explaining why such is charged on non micropayment transactions… Believe it or not, this is the true obstacle currently putting at hold the micropayment industry.
Instead of waiting for the associations to come to their senses – use PayPal. They offer a micropayment solution for 5% plus $0.05 per transaction. Open a PayPal Business (or premier) account, then search at PayPal search box for “micropayments”. Press on “PayPal Micropayments Website” and then “Signup”. Now request to change the Business (or Premier) account you just opened to a micropayment account. Congratulations – you just opened the best micropayment card solution currently available!
Gidi Argov, Founder and CEO
www.CreditCardProcessing-r-us.com
I tried opening a micropayment account with PayPal a few weeks ago and failed! Their menus are far from being user friendly, and though I got from Google to their micropayment promotion page, it referred me to a regular account opening page, which wasn’t a micropayment account! After wasting over an hour on their site, I put it aside and continued looking for other solutions… Happened to ‘fall’ on your blog, followed your instructions and got the desired account! Can’t believe I had to read your blog to make a PayPal micropayment account work… Someone at PayPal should hire you to rewrite their menus…
Thanks!!!
hurts but true…
Processing through the credit card associations, there’s nothing we can do to lower micropayment processing costs.
We hurtfully embrace your recommendation “use PayPal”.