14 DAY TRIAL // ebay is moving forward with the next phase of its payment platform, PayPal, by opening it up to developers. The new API, dubbed PayPal X, was announced last summer, but eBay is finally ready to make it available to everyone wanting to integrate some sort of payment option into their app or site. This is the first step in a huge shift at eBay, which is focusing a lot more on PayPal, as its core Marketplaces business is shrinking.
"We believe that consumer behavior will change in the next three years, more than in the last ten. Think about it this way: this year: the eBay iPhone app will do $500 million dollars in volume on a device that didn't exist two years ago, on an application that didn't exist one year ago," eBay CEO John Donahoe told the audience at the first-ever PayPal’s X Innovate 2009 developers' conference in San Francisco.
The new Active Payments API has a number of capabilities designed to make transactions easier and more transparent. It will allow developers to incorporate payment tools in their applications removing the hassle of having to switch between different sites and going through the usual process. It features options like currency conversion, pre-approved payments, parallel payments, and many others, and the biggest focus is on microtransactions and mobile payments.
The platform could prove useful for all sorts of developers and companies, but it could prove a lot more important to eBay itself. Right now, the company is making most of its revenue from the Marketplaces unit, which handles the auctions and e-commerce sides of the business. Growth there has been slow though, and, for quite some time, the company's biggest performers were the Payments unit, namely PayPal, and Skype.
PayPal may not be raking in the kind of money the auction site does at the moment, but its growth has been very strong and is proving very profitable for the company. But, with the new APIs, eBay hopes that the unit will become a lot bigger, with Donahoe saying revenue will double over the next three years and that it will eventually overcome the revenue the proper site generates.