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Ask HN: What is the preferred payment provider for micropayments?

20 points by x0ner ↗ HN
I have been working on a new web application that will be accepting micropayments (typically a $1) and I am not sure which payment provider to go with. It looks like in most cases my $1 profit is being stripped of 30 cents or more depending on the provider. I know Paypal has been the de facto standard, but has anyone faired out well with Google or Amazon?

12 comments

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x0ner
I also want to mention that I see Paypal and Amazon accounting for this, but they are doing it in a way that it hurts you to use it on all transactions over $10-12. In my case this could happen if someone did bulk buying. How would you model this out in a test environment, so you kind of knew what to expect?
drawkbox
Use the micropayment apis for products under the micropayment structure ceiling. Then use other apis, non micropayments, for transactions over a certain limit. Amazon FPS switches for you.

Paypal Micropayments https://www.paypalobjects.com/IntegrationCenter/ic_micropaym...

Amazon FPS (automatically switches between micro rates and larger purchases) http://aws.amazon.com/fps/

Under pricing: 2.9% + $0.30 for credit card for transactions above $10 and 5%+$0.05 for credit card for transactions below $10.

x0ner
I wasn't aware of the Amazon FPS. I am going to check this out and see how difficult it is to implement it. I guess the thing with using Amazon is whether people have more amazon accounts than paypal.
drawkbox
I would use Amazon and Paypal. While Amazon FPS scales to micro/regular payment for you, the Paypal link above mentions opening one micropayment and one regular paypal account and switching manually between. Both are allowed to get the best rate and it is worthwhile if you sell from .99 past $10+.
cd34
http://news.ycombinator.com/item?id=2033180 referred to this a while back.

centipaid.com talked about having a scaleable micropayment solution.

However, almost any solution requires one to have money 'in the system' and earn/spend the micropayments, and pay a fee to take it out or put money in. There are a number of other providers that do this through stored value Mastercards, etc, but, those fees sometimes become prohibitive.

The way I've seen a number of companies handle micropayments was to keep the money in the system, but, you couldn't get it released without earning $25 which kept administrative costs to a minimum. You had to fund the account, but, if you didn't spend it all, you couldn't get it back. Facebook credits work in a similar manner - one purchases $x of credits, then can spend those coins on various apps.

bcardarella
I don't like Paypal but you can't beat the price: https://merchant.paypal.com/cgi-bin/marketingweb?cmd=_render...

Click on 'Pricing' then scroll down and expand 'Micropayments'

It's 5% + $0.05. So for your $1 in revenue only $0.10 is taken by Paypal.

mdda
Seconded : But they really don't emphasize the possibility in their main materials.

The way I found to get on the program is to apply for the standard account, and then apply for the change to micropayments. In my case, they didn't tell me whether I was approved, the only way I could see that is by looking at their take on transactions.

So far, it's working great.

ig1
Have you looked at companies like Social Gold which provide micropayment ecosystems for online games ?
x0ner
I just took a look at this and I like the concept. I kind of wonder if my game falls in line with their model though. Users would essentially buy tokens on my app and then use them which could result in a reward. So they are buying a service for a small fee.

It seems like social gold is more focusing on assisting a community or a large virtual world. I don't have that, but I do see they also identify it as useful for services. I guess I need to look more into it. I think what I will do is release my beta to HN and ask what they think I should go with. Ultimately some form of payment will be required, but I am not sure if I am approaching it in the best way.

[dead] ig1
Have you looked at companies like Social Gold which provide micropayment ecosystems for online games ?
pbreit
Definitely PayPal. Not only should you be able to get 5% + 5c, it also is just rolling out a much better UX for digital goods and more importantly has 200+ miliion ready to pay.