Philippine-based online services provider Dragonpay has made available a service designed to enable online merchants to collect micro-payments for their digital content.

By charging only 5 percent of the amount, merchants will be able to sell items for as low as USD 0.11 and pay Dragonpay USD 0.55 of the amount. The service targets mainly merchants that commercialize social or online gaming items or selling digital goods like music.

Most payment systems have a fixed transaction fee component associated with it. Merchants selling low-value items, such as digital or virtual goods, are faced with the challenge of paying fixed fees which can range from 50 percent to 100 percent of the total product price.

Dragonpay currently offers online bank payments through Unionbank, Chinabank, RCBC and EastWest Bank and offline through Banco de Oro (BDO). By 2011 the Dragonpay and PayEasy payment services will be available to more than 4,000 bank branches.