PayPal Fights Amazon And Facebook With “Paypal X”

Paypal is stepping its game up this week by announcing its plans to go into the third-party application market. They’re not just developing some keeping-up-with-the-Joneses iPhone app though – they’re letting a whole platform loose to developers, allowing Paypal to get embedded into a wider range of sites and services.

Their platform, called Paypal X, is an API that will allow developers to tailor Paypal’s infrastructure for their own sites. Paypal themselves are highlighting the potential for micropayments that the platform might allow – Osama Bedier, the vice president of platform, told the FT: “I can pay 10 cents for something in real life. I can’t do that online”. The key with micropayments is to make them a) fast and b) not feel like you’re actually paying money; logging into Paypal and using one-click purchasing fills both of those criteria. Plus the traction Paypal already has with web users means that many won’t even have to bother signing up to a new service – it looks well placed to expand into the micropayment sector, as long as its API isn’t a total ballache to work with.

Paypal is looking ever more likely to be eBay’s saviour. Unlike Skype, Stumbleupon and others, Paypal is one of the only acquisitions the cash-drunk eBay made that actually dovetailed with its core business; the cash it’s generating is now accelerating eBay’s revenues even while the auctions business struggles to grow. Developers do have various beefs with Paypal in its current form, from seller protection to simplicity of use for customers. Paypal X is presumably designed to iron these out, and carry on growing eBay’s revenues – we’ll find out when it gets announced later today in San Francisco.

It comes as Amazon is expanding its payment platform, with PayPhrase. It’s a simple text field that you enter a special phrase into, something teeth-grindingly “funky” like “feisty mango”, rather than your email and password; along with a four-digit PIN it links to a set of specified billing and shipping info, and you can set up different phrases for different addresses, credit cards etc. The WSJ reports on some of the suggested phrases generated by Amazon (“Ingrained Abhorrance”, anyone?), while the Business Insider notes that the web stores currently partnered with Amazon for the scheme aren’t exactly chasing Paypal’s numbers. Still, early days yet.

Then of course there’s Facebook’s nascent attempt at internet domination, with Facebook Connect and Facebook Credits. Currently accepted by basically no-one, the credits are getting talked up today in the WSJ by interactive gaming developers Playfish – because they act as virtual currency, cross-border payment problems are solved. If you’re a developer wanting to start your own payment platform, think on – it’s not looking like there’s going to be much more market room outside of these three players.

Posted by Ben Beaumont-Thomas in Sci-tech | November 3, 2009 12:02PM |