PayPal Expands Mobile Payments; Pushes Into The Sale Of Digital Goods

Lots of about next-generation payment platforms today, and it’s only beginning to ramp up. Most of the news surrounded PayPal’s developer conference today in San Francisco and its three designated themes: local, social and mobile.

PayPal said today it is launching a new digital goods payment platform that will make paying for games, news, music and other media much easier; and announced many new partnerships, including one with Facebook. Additionally, it is relaunching its mobile offerings to reduce the number of clicks it takes to buy something on the phone.

Also today, PayPal’s parent, eBay announced that it has participated in an $8 million round of financing in Appcelerator, a company that helps developers create mobile applications by using existing web tools. With the help of the funding, Appcelerator will be able to integrate PayPal’s mobile payments into its platform. In a completely separate announcement that points to the continuning trend toward alternative payment options — and mobile in particular — American Express hired two additional execs from Sprint Mobile to join its mobile payments unit.

The big takeaway for how fast payments are moving to mobile is this PayPal factoid: PayPal plans to do $700 million in mobile transactions this year, up 30X over the past two years. In 2008, it recorded $25 million in mobile payments.

PayPal for digital goods: The company described this as being the equivalent of “dropping a quarter in the slot to buy a newspaper or play a video game.” This platform is for micropayments, or in other words for purchases under $12. Merchants will be charged 5 percent and 5 cents, which is much lower than typical charges. Companies using payment platform include: Facebook,,, GigaOM,, Ooyala, Plimus, Tagged, Tyler Projects and Ustream. Full release here, and many of these details were discussed in August here.

Mobile: Its new Mobile Express Checkout allows users to opt-in and remain logged in across mobile apps to make purchases in two clicks. Starbucks (NSDQ: SBUX) will use it to reload of Starbucks Cards directly from its Starbucks Card Mobile app for iPhone and iPod touch. A beta program taps into location-based services on the phone. The new iPhone PayPal app will allow users to find businesses nearby that accept PayPal for mobile payments. Finally, VeriFone is partnering with PayPal to offer merchants the ability to take credit card and PayPal payments in their store — or anywhere — using an application. Full release here.