PayPal, which transformed the way people pay on the Web, is about to have much bigger reach online.
With the new platform, any software developer can embed PayPal’s technology in an application. An application could be as simple as ordering and then paying for a pizza with one click on a cellphone. Or it could be as intricate as a way for corporate accounting departments to pay vendors without mailing checks.
Osama Bedier, the vice president for platform at PayPal, predicted that cash would soon be the payment of choice for only “tooth fairies, drug dealers and senators paying their household staff.”
The conference was a big deal for PayPal. EBay’s payments business is driving the company’s growth, and John Donahoe, eBay’s chief executive, reiterated that PayPal would soon be a bigger business than eBay’s marketplaces. To get the crowd as excited as PayPal’s executives were, there were free netbooks for all registered attendees, white-clad violinists to serenade people upon entry and roaming candy carts.
In the past, when someone wanted to use PayPal to check out, they generally had to open a new window and enter their PayPal log-in information. As a result, PayPal has missed out on a lot of the virtual goods business, which has instead gone to start-ups like Zong that let people enter their cellphone number and avoid interrupting a virtual game. Now, a PayPal pop-up box will open within a game or Web site.
PayPal has also been missing out on microtransactions, the small sums paid for a product online, like a single article or a day-long subscription to an online publication. People did not want to log in to their PayPal accounts to pay such small amounts of money. Now, a buyer can agree to give the seller a certain amount and the seller can collect the money at any time, so a reader could buy a $50 subscription and subtract 50 cents for each article.
Mark Glasberg is using PayPal for his start-up, iCents.net, which will offer online publishers a way to charge viewers. “Before today, there wasn’t a way to do this because it would disrupt the user experience if we were always asking you to go to PayPal and type in all your information,” he said.
PayPal’s new technology also lets Web sites take cuts from PayPal payments as they happen, which was not possible before. Clayton Bain, founder of a company called MedPayOnline.com that lets patients pay medical bills on the Web, used to have a complicated system to collect his transaction fee from hospitals. Now, PayPal will automatically deduct it.
Using the new technology, developers can now also let buyers send money to multiple people with one payment. This could be useful on sites like eBay and Etsy, where a shopper might make purchases from several people at once, or for a company using PayPal for payroll. A start-up called Payvment is using PayPal to let shoppers move from one virtual store to the next, add items to their carts at each stop and check out once.
“In order to break into new businesses that have been dominated by paper money, technology is not enough, we heard loud and clear,” Mr. Bedier said. Fees also had to be lower than 3 percent for people to use PayPal for things like rent or payroll. PayPal reduced the fee for paying for services out of a bank or PayPal account to either 50 cents or 0.75 percent.
Stu Andrews, a developer from Sydney, Australia, is taking advantage of this feature to build an application for a real estate company that would let tenants log on to the landlord’s Web site to pay rent, something that would have been prohibitively expensive before.