Though no major legal online services (Musicmatch, Napster, iTunes, Rhapsody) offer purchase of downloads via PayPal, Todd Pearson, managing director of merchant services says: announcements are forthcoming Paypal has just sweetened their music download fees to 2.5% and 9 cents per transactions for high volume online digital music companies. The normal fees are 2.2 percent plus 30 cents per transaction.

With the price at 79 cents per track through Rhapsody and 99 cents at most others, with reportedly two thirds going to the labels and copyright holders, I don’t see how another 15% or so can be absorbed by processing fees. It would be cool to be able to use PayPal to make purchases for downloading music though.