For years, PayPal had no rival in the online payments industry. Then, in 2007, Amazon launched its Amazon Payments, which not only gave PayPal a rival with real muscle, but was considered friendlier and more open to third party developers, thus why many apps utilized Amazon Payments instead of PayPal. And let’s not forget about Google Checkout, which also competes in the space.
However, Paypal is taking a swing back at the competition today, revealing PayPal X and Adaptive Payments, a new initiative that allow third party developers to utilize PayPal in completely new ways. Prepare yourself for split payments, payment aggregation, and PayPal on other websites.
The Basics of Paypal X
PayPal is essentially opening up its platform to developers so that they can build new products off of PayPal. This is called PayPal X. The first part of this new initiative is PayPal Adaptive Payments, which refers to the new APIs (application programming interfaces) that will help developers do new things with PayPal.
All of the developer-related information will be placed on PayPal’s one-character domain, X.com. Here are some of the things that are now possible:
- Send Money: Peer-to-peer payments can and will happen on multiple platforms, not just on PayPal.com
- Split Payments: You can now split payments among many recipients via the Platform. For example, if you need to pay multiple people a commission on the sale, you can send just one payment instead of four or five.
- Payment Preapproval: Once you log into a system and confirm prepayments, the API will automatically transfer funds based on pre-set specifications.
- Payment Aggregation: To reduce the costs of payment transactions, users can soon aggregate multiple payments into one lump transaction. Amazon Payments already offers this.
This could be good news for a lot of smaller firms and third-party developers. Let’s take TwitPay as an example. TwitPay allows users to send and receive micropayments via Twitter (
). It is run on PayPal, and in fact is one of the first apps utilizing the Adaptive Payment platform (and probably the reason they switched from Amazon Payments). The new API lets you do things like send payments right on Twitpay.me (and hopefully soon split payments).
PayPal Adaptive Payments doesn’t come out to all developers and users until November, but expect to see more websites utilizing the new PayPal X very, very soon.