PayPal Opens Platform to Target $30 Trillion Opportunity at DevCon
By Ina Steiner
PayPal believes payments for services is a bigger opportunity than ecommerce at over $30 trillion and is opening its platform to third-party developers to capitalize on the opportunity. PayPal is expecting 1,500 attendees at its first dedicated developers conference taking place in San Francisco this week where it will launch the open platform, called "PayPal X."
At a preview event during eBay's developer's conference in July, PayPal President Scott Thompson said, "Your business will become our business - we view you as our third set of customers." Just as Facebook opened its API to third-party developers, PayPal wants to do the same, but sees a much larger opportunity as a platform-agnostic payment engine.
Some companies are already using PayPal's Adaptive Payments API, which PayPal released in private beta in July, to innovate in the payments space - TwitPay, LiveOps, GreenDot, Fundrazer and Lottay are examples of third-party companies working with PayPal as it extends its reach into such areas as mobile, gaming, fundraising and social networking. PayPal will open additional APIs at this week's conference.
PayPal decided to open its platform because of its own constraints, according to Naveed Anwar, Senior Director of PayPal Developer Network. "But working with the developer community, the entrepreneurs, the new startups - let them concentrate on the core experience of what they're building and leave the payment portion to us, because that's what we're good at."
Apple and Facebook had success when they opened up the iPhone SDK for the app store and Facebook APIs, respectively, Anwar said, "but those are siloed examples. PayPal is actually opening up its global transactional engine, which can be utilized in any of these scenarios and any of the platforms."
PayPal worked with about 10 partners last November to develop its open platform; at its platform preview in July, it opened up the beta trial to 300 developers, and it now has over 1,000 partners working with the Adaptive Payments API, which allows P2P payments, split payments; parallel payments (enables a sender to send a single payment to multiple recipients); chained payments (enables a sender to send a single payment to a primary recipient, and then send a portion of the payment to a secondary recipient); and pre-authorization with a PIN.
Third Party Pre Approvals provides the ability to automatically charge a customer's PayPal account; one usage of this feature is providing the customer with the ability to pre-approve a payment online and then make future purchases without being redirected to PayPal.com. This enables purchases on a mobile phone or any other non web-based application.
Attendees at this week's DevCon will get a sneak peek at PayPal's platform roadmap for the next year and will receive exclusive access to the new APIs, which will not be available to non-attendees until 2010. PayPal will also showcase companies in four areas: technology, financial, mobile and devices to give attendees the sense of the breadth in which PayPal can be used beyond ecommerce. eBay CEO John Donahoe, CTO Mark Carges and PayPal President Scott Thompson are set to present at the event, as well as technology publisher Tim O'Reilly and Om Malik, who will moderate a panel of venture capitalists.
PayPal is moving its developers community to a new website at X.com.
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About the author:
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to email@example.com.
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