Friday, July 24, 2009

PayPal Opens Platform to Developers

DM News reports that PayPal has announced plans to open its platform to third-party developers, allowing them to embed the PayPal payment system into their applications and platforms.

“Until now, developer innovation has been stifled by the barriers payment systems impose,” said Scott Thompson, president of PayPal, in a statement. “With an open platform, we're solving fundamental challenges people face when trying to pay or get paid and giving people the tools to create new business models for their innovations.”

TechCruch reports that the payments API, which will be called Adaptive Payments, will officially open up to developers in November but will be accepting beta testers until then.

Very similar to Amazon’s Flexible Payments Service (FPS), the Adaptive Payments API handles payments between a sender of a payment and one or more receivers of the payment. Adaptive Payments allows almost the same functionality as FPS. The new API lets developers become a payment aggregator, which is currently against PayPal’s Terms of Service. Amazon’s FPS also lets developers aggregate payments. Moreover, Paypal’s Adaptive Payments has built in micropayments support, another feature of FPS. PayPal says that they think they can be a viable micropayments vehicle, but won’t reveal more information about what the support entails.

TechCrunch also reports that Adaptive Payments will offer “Parallel Payments,” which would let a sender send a single payment to multiple receivers. For example, this might be used with a shopping cart that lets a buyer pay for items from several merchants with one payment. The shopping cart would allocate the payment to the merchants who actually provided the items. PayPal would then deduct money from the sender’s account and deposits it in the receivers’ accounts.

Michael Ivey, founder and CEO of TwitPay, a way to send money over Twitter, is using PayPal’s Adaptive Payments API. Off of TwitPay’s payments platform, you can pay multiple recipients in one PayPal transaction.

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