PayPal tries rewiring e-commerce with new interface

PayPal, eBay's well established but aging mechanism for online payments, is trying to rebuild itself for a new generation of online commerce possibilities.

At an event for press and developers on Thursday, PayPal and its partners described several new programming interfaces that are part of the company's upcoming Adaptive Payments Service and showed what developers can do with them.

"It's truly disruptive," said PayPal CEO Scott Thompson at the event. "It puts developers in the driver's seat by allowing you to do what you want to do and (choose) how you want to get paid."
The new service will be available to 300 PayPal partners starting Thursday, with a public beta this November--just in time for PayPal X Innovate 2009, its first developer conference.
PayPal is pitching the Adaptive Payments platform to developers as a way to more easily build PayPal-powered payment options into their applications. It's also a more streamlined version of PayPal's existing program for letting businesses manage transactions between several different parties.

PayPal isn't just central to eBay's future. It will eclipse the company's auction and commerce operations, the company says.

"PayPal is a business that will be bigger than eBay," eBay Chief Executive John Donahoe said Thursday at the Fortune Brainstorm conference.

PayPal is a force to be reckoned with. On average, more than $2,000 goes through PayPal every second of each day. It has 75 million active accounts, and it's available in 190 markets and 19 different currencies.

Sites already using the new API include: Webassist, GroupCard, Lottay, Rainfall of Envelopes, and MedPayOnline.com
"PayPal will help you get paid for your innovations--your business will become our business," Thompson told the developers. "We view you as our third set of customers."
New features

The new payment service has a handful of new features designed to make it easier for developers to make money with their applications and services.

Thompson said that even if developers were acting as an intermediary between the person sending the money and the recipient, they would now be able to take their cut of that transaction--just as PayPal does.

"The pace of innovation is just staggering," he said. "And the next wave of innovation is poised to move that much faster. "