eBay has launched a program allowing its sellers to list digitally delivered goods such as MP3 files, eBooks, movies, photos. eBay defines a digital item as a product sold in the form of a computer file that a buyer can access online or have delivered electronically via email. eBay is limiting such sales to fixed-price formats only, and all purchases must be paid through PayPal.

Sellers must have a PayPal Verified Premier or PayPal Verified Business account, which requires them to have a bank account on file at PayPal and requires that sellers accept credit card payments from buyers. Sellers must also go through a specific listing process in order to sell digital items on eBay, including selecting a new option on the Sell Your Item form labeled "List as a Digital Item." They must use PayPal's Immediate Payment option so buyers will receive immediate delivery of the digital item.

eBay had launched a pilot program to test digital downloads in July 2004. Sellers in the pilot program included iHoopla (http://stores.ebay.com/iHoopla) and Digital River (http://stores.ebay.com/Download-Store).

Three months ago, PayPal rolled out new micropayment fees for processing purchases of digital goods designed to give customers the convenience of a-la-carte purchases, such as 99-cent downloadable ringtones, without having to sign up for annual subscriptions or pre-funded payment accounts.

An extension of PayPal's existing payment service for digital music providers, the micropayments pricing is designed especially for payments less than $2. The fees enable merchants to process payments at a rate of 5 percent plus 5 cents per transaction. Because of the reduced fixed fee, merchants can save 40 to 60 percent when processing low-cost payments, compared to the industry's current payment processing rates of approximately 2 percent plus 20 to 30 cents per transaction. For a 99-cent purchase, for example, sellers pay 10 cents to PayPal for processing fees instead of 32 cents.

eBay will host a workshop on January 9 to give users more information about buying and selling digital items and the copyright laws that govern them.

http://pages.ebay.com/choosingformats/digitalitems/faqs

http://www2.ebay.com/aw/core/200512141728192.html