What will money look like in space? PayPal wants to find out

The first people to land on Mars will be funded by governments, research labs and even reality TV. But as permanent colonies pop up, the need for personal finance will emerge.

PayPal wants to tag along for the ride. The company will reveal an initiative Thursday to encourage debate on how to best tackle monetary transactions hundreds or thousands of miles from Earth.

The initiative (or publicity stunt, depending on your level of cynicism) is known as PayPal Galactic and is meant to raise public awareness of the realities of mainstream private and citizen spaceflight, said PayPal senior director of communications Anuj Nayar. It also challenges the industry to move beyond Earth’s antiquated banking systems by dreaming up something new altogether.┬áSome of the biggest questions they hope to answer: What will currency look like when we abandon physical cash? What risk and fraud management systems will be necessary? What regulations exist?

First commercial space station

The first commercial space station will operate as a hotel too, hosting up to seven people at a time. Orbital Technologies

“Space is the ultimate virgin territory,” Nayar said. “If we were creating a payment from scratch, you wouldn’t be doing what we’re doing today. I think it’s an opportunity to really drive a new way of doing things.”

Nayar said PayPal employees started thinking about space currency about a year ago while talking about Orbital Technologies‘ planned space hotel. The hotel, which is part of a larger commercial space station plan, will host up to seven people and start orbiting Earth as soon as 2016.

“The tipping point is going to happen faster than any of us imagine,” Nayar said, noting that Virgin Galactic will also launch its first tourism flight this December. “What’s the currency you’re going to pay for your morning coffee with?”

Its likely any space travel in the next few years will continue to rely on advance transactions on Earth. But as humans move toward longer, farther space travel, Nayar said alternative currencies will become more important.

There are also obvious legal and technical questions to answer. Nayar said PayPal relies on IP addresses for many of its algorithms. In space, there aren’t IPs, so new methods will need to be developed.

PayPal will announce the initiative in partnership with SETI, a nonprofit research institute dedicated to space exploration and the search for extraterrestrial life. Astronaut Buzz Aldrin will also participate.

This story was updated at 8:50am PT to no longer say NASA’s Alex MacDonald will be in attendance.