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October 26, 2010, 1:07 PM EDT
By Joseph Galante
(Adds Facebook?s involvement in fifth paragraph.)
Oct. 26 (Bloomberg) -- PayPal Inc., the online-payments processor owned by EBay Inc., introduced a mobile version of its checkout software today as it tries to capitalize on surging smartphone use.
The company, holding a conference in San Francisco to promote its service to mobile-phone and Web developers, also unveiled a cheaper way for businesses to handle transactions of less than $12, such as a 99-cent digital song or a single newspaper article.
As more commerce moves to phones and social networks, PayPal is racing against Visa Inc. and MasterCard Inc. to earn the loyalty of programmers. Its developers, who began building PayPal applications on smartphones, televisions and websites last year, have generated $1 billion in payments volume for the company. Mobile commerce will grow sixfold to $119 billion by 2015, according to ABI Research in Oyster Bay, New York.
?Developers are basically taking PayPal out to places PayPal hasn?t been before,? said Nate Gilmore, vice president of marketing and business development at Shipwire Inc., a Palo Alto, California-based company that helps merchants store and ship products. ?This does for commerce application development what online banking did for consumers or what the ATM did for banking.?
Facebook?s Role
Facebook Inc., the world?s biggest social-networking company, endorsed the new technology at the conference. Sheryl Sandberg, Facebook?s chief operating officer, said her company will use PayPal to pay its developers and adopt the new version on the site.
PayPal estimates it controls about 10 percent of the online payments market, ranking behind Visa and MasterCard. It generated $22.4 billion in payments volume last quarter and accounts for 37 percent of total revenue at San Jose, California-based EBay. PayPal is outstripping growth at its parent company, which expects online payments eventually to become its biggest business.
PayPal gave developers more access to its software last year, letting them build PayPal apps across the Web. The platform, called PayPal X, has attracted 50,000 programmers and 1,000 applications.
Mobile Payment
Its mobile express checkout, which has been tested by companies such as Nike Inc. and Buy.com Inc., will become available to all merchants, PayPal said. The micropayments product will let merchants collect low-dollar purchases until a certain volume is reached, at which point PayPal will charge a single processing fee.
That helps businesses lower their costs. Processing fees for items less than $12 typically account for a large percentage of the purchase price, making it unattractive for merchants to accept credit cards.
Visa, the world?s biggest handler of payments, said yesterday that it will give developers free tools to build applications on a variety of devices through its Authorize.net platform. Visa is afraid of losing developers to PayPal, said Bill Smead, an EBay investor who oversees $160 million at Smead Capital Management in Seattle.
?If Visa doesn?t get them now, they will be gotten by PayPal,? he said.
Under President Scott Thompson, PayPal has forged partnerships with Microsoft Corp. and International Business Machines Corp. to help developers build payments apps. Yesterday, PayPal bolstered its management team, hiring Sitel Corp.?s Patrick Dupuis as chief financial officer. EBay Chief Executive Officer John Donahoe said last year that he was open to the idea of spinning off PayPal someday.
?We saw as early as last fall PayPal was going to take a leadership role in mobile commerce,? said Scott Schwarzhoff, vice president of marketing at Appcelerator Inc., which helps businesses such as MTV and Budweiser build mobile apps. ?We?re enabling them to go a heck of a lot faster into mobile than they can on their own.?
--Editors: Nick Turner, Stephen West
To contact the reporters on this story: Joseph Galante in San Francisco at jgalante3@bloomberg.net
To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net
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(Adds Facebook?s involvement in fifth paragraph.)
Oct. 26 (Bloomberg) -- PayPal Inc., the online-payments processor owned by EBay Inc., introduced a mobile version of its checkout software today as it tries to capitalize on surging smartphone use.
The company, holding a conference in San Francisco to promote its service to mobile-phone and Web developers, also unveiled a cheaper way for businesses to handle transactions of less than $12, such as a 99-cent digital song or a single newspaper article.
As more commerce moves to phones and social networks, PayPal is racing against Visa Inc. and MasterCard Inc. to earn the loyalty of programmers. Its developers, who began building PayPal applications on smartphones, televisions and websites last year, have generated $1 billion in payments volume for the company. Mobile commerce will grow sixfold to $119 billion by 2015, according to ABI Research in Oyster Bay, New York.
?Developers are basically taking PayPal out to places PayPal hasn?t been before,? said Nate Gilmore, vice president of marketing and business development at Shipwire Inc., a Palo Alto, California-based company that helps merchants store and ship products. ?This does for commerce application development what online banking did for consumers or what the ATM did for banking.?
Facebook?s Role
Facebook Inc., the world?s biggest social-networking company, endorsed the new technology at the conference. Sheryl Sandberg, Facebook?s chief operating officer, said her company will use PayPal to pay its developers and adopt the new version on the site.
PayPal estimates it controls about 10 percent of the online payments market, ranking behind Visa and MasterCard. It generated $22.4 billion in payments volume last quarter and accounts for 37 percent of total revenue at San Jose, California-based EBay. PayPal is outstripping growth at its parent company, which expects online payments eventually to become its biggest business.
PayPal gave developers more access to its software last year, letting them build PayPal apps across the Web. The platform, called PayPal X, has attracted 50,000 programmers and 1,000 applications.
Mobile Payment
Its mobile express checkout, which has been tested by companies such as Nike Inc. and Buy.com Inc., will become available to all merchants, PayPal said. The micropayments product will let merchants collect low-dollar purchases until a certain volume is reached, at which point PayPal will charge a single processing fee.
That helps businesses lower their costs. Processing fees for items less than $12 typically account for a large percentage of the purchase price, making it unattractive for merchants to accept credit cards.
Visa, the world?s biggest handler of payments, said yesterday that it will give developers free tools to build applications on a variety of devices through its Authorize.net platform. Visa is afraid of losing developers to PayPal, said Bill Smead, an EBay investor who oversees $160 million at Smead Capital Management in Seattle.
?If Visa doesn?t get them now, they will be gotten by PayPal,? he said.
Under President Scott Thompson, PayPal has forged partnerships with Microsoft Corp. and International Business Machines Corp. to help developers build payments apps. Yesterday, PayPal bolstered its management team, hiring Sitel Corp.?s Patrick Dupuis as chief financial officer. EBay Chief Executive Officer John Donahoe said last year that he was open to the idea of spinning off PayPal someday.
?We saw as early as last fall PayPal was going to take a leadership role in mobile commerce,? said Scott Schwarzhoff, vice president of marketing at Appcelerator Inc., which helps businesses such as MTV and Budweiser build mobile apps. ?We?re enabling them to go a heck of a lot faster into mobile than they can on their own.?
--Editors: Nick Turner, Stephen West
To contact the reporters on this story: Joseph Galante in San Francisco at jgalante3@bloomberg.net
To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net
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