As an appetiser, Napster introduced pre-pay cards at Dixons’ stores across the UK earlier this month, in an effort to attract customers who don’t have a credit card. As the music business is fretting most about teenagers downloading music, it would appear to make perfect sense to give them a payment method that allows them to pay for the music. Now, the Los Angeles-based digital music provider has announced that customers in the United States, the United Kingdom and Canada can now pay for tunes using PayPal, using it to purchase monthly subscriptions or individual tracks and albums. PayPal, owned by eBay is one of the largest payment handling companies on the Internet.
Napster obviously wants its payment options to be as convenient and accessible as its music download options. If you don’t already have a PayPal account, Napster will set one up for as part of its registration process, while existing customers can select the new payment option when they enter billing information.
The ultimate benefit of PayPal, which already has nearly 57 million customer accounts around the world, lies in its flexibility. It acts like a virtual wallet, allowing users to pay for products online with multiple funding options including a bank account, a credit card or an existing PayPal account. Other payment options on Napster, such as credit and debit cards as well as prepaid cards, will continue to be available.
Unless you have been living in a parallel universe, you will know that Napster popularised free music swapping over the Internet, primarily using the MP3 format, before turning into a legal music service. Now the popularity of legal downloading services like Napster and Apple Computer’s iTunes has resulted in a resurgence of interest in online transactions that use micropayments.
iTunes still only accept the credit card, but no doubt they will now feel under pressure to offer an alternative payment method also, and are probably already talking to an online payment handling company as I write.