When Steve Ballmer repeated the now-famous and parodied words, "Developers, developers, developers", he may have been far more sane than he looked at the time.

From Apple to Facebook, some of today's most successful and popular internet companies are taking advantage of third party developers to extend their products and make them more useful and appealing. In many cases, these companies owe some of their success to developers.

So it's not entirely surprising that PayPal, which is no slouch, is betting that a big chunk of its future success could also be fuelled in part by third party developers. At its PayPal Innovate X 2009 conference in San Francisco yesterday, the internet's dominant payment service announced its much-awaited PayPal X platform that aims to put the power of PayPal's payment platform and infrastructure in the hands of these developers.

The Adaptive Payments APIs that are part of the PayPal X initiative include:

  • A Pay Anyone API that will allow financial institutions to give their customers the ability to send money to others, even if they don't have a PayPal account.
  • A Send Money API that will enable developers to integrate PayPal payment functionality into any platform.
  • Chained Payments and Parallel Payments APIs that will give developers the ability to deal with a variety of scenarios in which payments needs to be sent to multiple recipients.
  • An Adaptive Accounts API that will permit developers to create PayPal accounts from within their own applications without the need to send non-PayPal users to PayPal's website.

One of the goals with these APIs is to tap into the types of transactions that PayPal isn't traditionally used to complete. Specifically, PayPal is targeting "markets that are traditionally served by cash and checks, such as rent, consulting businesses or payroll". For developers who build applications serving these markets, PayPal's introductory pricing will be 50 cents for transactions that are funded with a bank account and which settle within three days, and a .75% transaction fee for transactions that are settled instantly.

These APIs will no doubt create lots of opportunities for developers, which could potentially lead to an Adaptive Payments 'gold rush' as these APIs become available. After all, while there are many appealing development platforms these days, monetization on many of them is difficult. PayPal's APIs, of course, are all related to transactions in which money changes hands. That, in theory, should make it easier for developers who create useful applications to capitalize on them financially.

If PayPal has its way, developers will now make PayPal a truly ubiquitous part of the online (and mobile) payment experience, even if consumers don't even know that they're using PayPal. As TechCrunch detailed, John Donahoe, eBay’s CEO, is of the opinion that online payments should make up more than 20% of global payments right now. But in reality they only account for 5%. If there's any group that can help him get to that 20%, it just might be developers, developers, developers.

Photo credit: Phillie Casablanca via Flickr.

Patricio Robles

Published 4 November, 2009 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (1)


John (ColderICE)

Paypal can promote and quote their positives better than I can, so I resign to my top 3 concerns about this.

#1) Greed and fraud - easier cash transfer increases the ability for fraud by bad people. This could hamper Paypal because there will be attempt to use applications to con monies in new fashions.

#2) Regulation - America has just been through (and is still going through) a very bad time with bank corruption. Regulation of money institutions are going to be a concern. While Pp has flown under the radar, too much exposure could wake up the sleeping GIANT of government regulation.

#3) Baggage - Contrary to what Paypal may feel or think…they are NOT a new brand. This brand of Paypal has a LOT of baggage. I do not think one person on the web (with a Paypal account) has not received at least ONE fake Paypal email?!? With that comes some natural push back for this plan of world domination. Some people just don’t trust the company and possibly never will.

So that is my 2 cents…I did not charge, so you can not get your money back :-)

John (ColderICE)



over 8 years ago

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