PayPal X Innovate 2010 – Day 1
Glenbrook’s Russ Jones is attending the PayPal X Platform developers conference in San Francisco. His post from Day 2 is here.
The PayPal news feed was running full blast today given all the various products, initiatives, and alliances that were announced on the first day of the PayPal Developer Conference. This was PayPal’s second developer conference and they feel good about what they have accomplished since launching the PayPal X Platform a year ago. Here’s their report card on the first year:
- Signed up 50,000 new developers
- Launched 1,000 new payments-related apps
- Processed over $1 billion in TPV (by year end)
PayPal accomplishments aside, how was the conference? In a word, overwhelming. I’m not sure I’ve fully grasped everything that was introduced today. There were a flurry of announcements (and cool demos) about 2-click and even 1-click purchases of digital goods and a bunch of mobile payment announcements. Here are the other things that caught my attention:
PayPal Business Payments
The new pricing model that was announced at last years conference is finally available. But instead of two variations, it has been simplified down to a flat $0.50 per transaction for business payments funded by PayPal balance or bank account. This pricing is for commercial payments in general and is not intended for eCommerce transactions. Along with this new pricing, Paypal also introduced an Adaptive Storage API that is perfect for supporting the remittance data that typically accompanies a business payment.
This new pricing and remittance API is available to app developers that are developing business applications, and is not available to traditional eCommerce merchants. PayPal manages this through the app development lifecycle. In other words, developers have to apply to use this pricing and functionality and PayPal will vet the application before it is deployed.
We expect PayPal Business Payments to find a good reception in B2B payments, rent payments, healthcare payments, and other similar commercial markets. Learn more about PayPal X for business payments here.
PayPal App Marketplace
The PayPal App Marketplace provides PayPal partners with the ability to directly integrate their online functionality into the PayPal.com website. PayPal views its 90 million active users as the natural community for many of these apps, and believes the Marketplace is a good way to provide developers with access to the global PayPal user community.
We expect to see many invoicing and billing partners directly integrate into the PayPal website via the Marketplace. To the PayPal user, the apps are presented through an App Tray. PayPal indicates that the App Marketplace will be available next year.
PayPal Pay Anyone Partnerships
PayPal has previously announced various bank partnerships that use the PayPal Pay Anyone functionality. This gives bank customers (without PayPal accounts) the ability to send money to anybody by email address or telephone number. The big news at this years conference were two new partners. The “big bank” announced at this years conference was USAA Federal Savings Bank (USAA Bank), which will be working with PayPal to deploy Pay Anyone functionality in their online banking environment and in their mobile app.
More striking, perhaps, is a new partnership with Discover that provides Discover cardholders with the ability to send money to family and friends directly from their Discover online account or mobile device. The transactions are treated as purchase transactions, not cash advances, and qualify for 1% cashback rewards.
For personal transactions, there are no fees for either senders or receives on these transactions. Discover indicates that the economics of these transactions are based on a larger strategy to drive share and preference with cardholders in general. Discover motivation aside, it will be interesting to see if any other card issuers follow their lead and offer PayPal Pay Anyone functionality as a card enhancement.