Paypal X aka Paypal As A Platform, Objectives for 2011: Mobile, Offline and B2B

By October 30, 2010
Picto Paypal X

Last week, Paypal did its second developer conference called Paypal X Innovate 2010 aka Paypal As A Platform (you can find all the information on Twitter with the hashtag #XInnovate).

The two days were all about crazy announcements in all payment areas: new microtransaction pricing for digital goods, fixed price for B2B payments (50 cents per transaction), Paypal Mobile Express Checkout, Facebook will continue to use Paypal as an option for Facebook credits purchasing and which will also pay its developers through Paypal and last but not least, a partnership with Verifone to reach the offline world.

Even if Mobile transaction processed represents merely 1% of Paypal global transaction for 2010 ($700M expected in 2010 compare to $72B transaction processed globally in 2009), Paypal bets a lot on it in the near future and their new Mobile express checkout will be a real test for them. Also, as Paypal wants to reach more and more places, they are getting a little further in the “offline” payment area. They made a new partnership with Verifone to offer the ability to pay with a Paypal account at the POS with the Payware Mobile solution. It’s a global extension in parallel of their current pilot with Bling Nation. The third major announcement was their new product Paypal Business Payment. Thanks to this product, B2B transactions will be charged a $0.50 flat fee regardless of the amount of the transaction. It will foster new possibilities for businesses and especially SMEs. For exemple, Facebook is one of the early adopters of this offer and they will pay their developers through Paypal, consequently these developers will need a Paypal account to receive their money.

To understand the perspective of Paypal last moves during the last two years, I will quote Dan Schatt, Paypal GM of Financial Innovations. He described Paypal X as the 3rd evolution stage of Paypal history. According to him, the first stage was all about Online Payment and E-commerce, second one was all about cross border transactions (with small merchants in mind) and now it’s the exploration with partners. As a software company from the Silicon Valley, this third stage of “exploration with partners” was synonymous of platform and developers for Paypal even if in financial services industry it was not so automatic.

After two years running, success is there: 50,000 developers working with PayPal from 129 countries which produced 1000 new apps since last year. Paypal is shaking the payment industry and the card giants are becoming serious about seducing developers too to follow the tiger.

Bonus: Also, for those interested in the financial services innovation, take a look at the very good reflections of Erin McCune who made a review of Sibos 2010 which took place in Amsterdam last week.

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