PayPal Unveils Plans To Open Payment Service

EBay’s PayPal unveiled pricing and an API to allow developers to more easily integrate the payment service into third-party applications.

The API will allow developers to write programs that use PayPal for payments, without users having to leave the application. Today, people who use PayPal on a third-party application are taken to a separate window to complete the transaction.

Also, PayPal will offer special pricing for developers who use its expanded service in applications that are traditionally serviced by cash and checks, such as rent, consulting businesses or payroll.

Beginning in the second quarter of next year, eBay will charge a flat fee of 50 cents for service transactions with a three-day settlement period, or a 0.75 percent fee for service transactions with instant settlement. The prices are considerably less than PayPal’s regular e-commerce fee of 1.9% to 2.9%, plus 30 cents. For transactions under $10, PayPal’s charges a 5% fee, plus 5 cents.

EBay made the announcements Tuesday at its first developer conference, PayPal X Innovate 2009 in San Francisco. The company first announced the PayPal X platform last month during the Web 2.0 Summit.

PayPal’s new APIs make it possible for developers to let people who are not PayPal members to sign up for the service within the application. Developers will also be able to let users of their applications make payments to several people in one payment, making it possible to purchase multiple items from different sellers or to conduct non-commercial transactions, such as paying wages to employees.

PayPal is particularly interested in getting its service folded into mobile applications, betting that people will increasingly use their smartphones for conducting transactions. In the first half of next year, the company plans to release a mobile payment software development kit, which will initially support Apple’s iPhone.

PayPal launches its expanded service as the company faces increasing competition from some of the biggest names on the Web. Amazon launched its online payment platform last year for third-party merchants, and Google recently expanded its Checkout payment service as a means to pay for applications purchased on the Android Market, an online store for buying apps for smartphones that use the Google operating system.

PayPal’s latest plans are part of EBay’s overall strategy of driving more revenue through expansion of the online payment service in e-commerce and mobile applications and in making non-retail payments.

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One response to “PayPal Unveils Plans To Open Payment Service

  1. Great post. I use paypal and have been for years. I have no problem with using the old style payment buttons and I think PayPal’s current fees for business accounts is extremely low versus eBay’s seller fees. I know eBay and PayPal are sister companies but the fees are extremely high in my opinion for selling on eBay verses your own site.

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