PAYPAL, a subsidiary of eBay, has launched a micro-payment service in China for digital goods, the US-based company said yesterday.

The deal covers games, news, music and video content, as well as related services.

PayPal's small amount payment service, for purchases under US$16, is expected to boost the revenue of Chinese online game firms, which are expanding overseas.

The new services let consumers pay for digital goods with as little as two clicks directly on the publishers' websites. The price was 5 percent of the transaction plus 5 US cents, with an additional 0.5 percent fee for cross-border transactions.

The fees are lower than those charged by payment processors in the digital goods industry. Meanwhile, Chinese developers, publishers and merchants can get paid quickly, industry insiders said.

Top domestic game firms Shanda Games and Perfect World have invested heavily to expand overseas.