Paypal Transaction Costs for Micro Donations

AUGUST 6, 2007

Quite a lot of open source and open knoweldge projects use micro donations – sums of $5 or less. It is interesting to note that if you, as a donor, give $1 via PayPal (one of the most popular payment systems) paypal charge 35 cents. That means at the $1 level transaction costs (excluding any monopoly/oligopoly effects) works out at over 35%.