PayPal Bets Its Future on Mobile

“We were late to the Internet payments,” says Osama Bedier, VP of platform, mobile and new ventures at PayPal and one of the oldest employees of the company. “We are not going to make that mistake with mobile and we are all in.” His words sum up PayPal’s (s ebay) future. Today at its annual developer conference, Innovate 2010, PayPal will start outlining its plans to become a major force in the world of mobile payments.

While folks like Apple (s AAPL) and Google (s GOOG) have their own plans for m-commerce domination, PayPal is betting that a decade of experience and working with thousands of stores, online operations and developers are going to help the company become the third — and most importantly, neutral — option for buying stuff on your handset. Mobile payments are viewed as a the next big gold rush on the Internet and have attracted millions of dollars in funding. According to some estimates, by 2014, mobile payments will be a $633 billion market.

During its conference call with analysts last week, PayPal parent eBay (s EBAY) said the total money flowing through PayPal mobile would be around $500 million in 2010.

While Apple has been successful when it comes to selling digital goods (music, video, games and apps) via its payments platform, Bedier hopes PayPal can help actual customers benefit from the ongoing shift to “anywhere computing.” A fast growing and increasingly lucrative division of erstwhile e-commerce leader, eBay, PayPal has taken a multi-pronged approach to tackle the mobile market and is announcing a handful of new products:

  1. Mobile Express Checkout. It will be available initially on iPhones and will allow you to make purchases via two-click checkout. This will work across apps (and eventually across platforms) as more developers use a small piece of code on their apps. It will also work on modern mobile web browsers.
  2. Mobile Payments Library. The new functionality will allow for pre-approved, chain, and split payments and will be targeting subscription businesses.
  3. PayPal Mobile for iPhone 3.0. The new app uses location to find businesses that accept PayPal or BlingTag from BlingNation. Merchants can send deals and promotions, much like Groupon.

In order to get more merchants to use PayPal, the company is partnering with VeriFone, a credit card processing equipment maker. The two companies will also use Bump Technologies’ “bump to pay” feature.

And in other news:

  • Facebook is now using PayPal as a premier partner and be using PayPal for Digital Goods.
  • is also using PayPal for Digital Goods.

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