While Ebay’s Q2 earnings yesterday showed that its marketplace business was slow, the company’s revenue was boosted by continued growth in its online payments business, including PayPal and BillMeLater. Both businesses saw 11 % growth in revenue in the quarter, compared to a year ago, and saw a 20% increase in registered accounts from last year, with 75.4 million accounts. On the heels of this good news, today PayPal is officially announcing the launch of its flexible payments API, called Adaptive Payments (which we scooped a few weeks ago here). The new platform will officially open up to developers in November but will be accepting beta testers until then.
Basically the new API is designed to give developers full access to PayPal’s features, allowing them a lot more freedom in building applications which include the ability to accept and distribute payments. PayPal’s President Scott Thompson says that developers will basically be able to do anything they want off of the PayPal platform, emphasizing the “global connectivity” of PayPal (transactions can be conducted in 19 currencies). He says $2000 flows through PayPal’s system every second, 365 days a year. Thompson says that what differentiates this new innovation is the ability to maintain security, while still extending the API far from PayPal.
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 we are told is something against PayPal’s current 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.
Microsoft cloud computing platform Azure is also utilizing Adaptive Payments to let developers who are building applications using PayPal seamless integrate their applications with Azure’s platform. Microsoft is working with PayPal to help developers easily embed billing and payment functionality into applications built off Azure and will offer interoperability between Azure and Adaptive Payments.
Some of the offerings of Adaptive Payments are sure to be attractive to developers. In what PayPal calls “Chained Payments,” developers can create applications that enable a sender to send a single payment to a primary receiver who may keep part of the payment and pay other, secondary receivers with the remainder of the funds. For example, an application might be an online travel agency that handles bookings for airfare, hotel reservations, and car rentals. The sender sees only the travel site as the primary receiver. But that site could allocate the payment for its commission and the actual cost of services provided by other merchants. PayPal would deduct the money from the sender’s account and deposit it in both the primary travel site’s account and the secondary receivers’ accounts.
PayPal has decoupled the approval process from the transaction, giving sellers more flexibility of how and when sender approval process can take place. PayPal says that over the next year, they plan to unveil more APIs to encourage developer to build of the platform.
Adaptive Payments will also offer “Parallel Payments,” which would let a sender send a single payment to multiple receivers. An example of this type of application might be 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.
LiveOps, an outsourcing marketplace and platform, is using the Adaptive Payments platform for several months. The platform uses PayPal to invoice; money is dynamically routed to workers from businesses. LiveWork says the advantage of using PayPal is that there is no credit card or financial information stored on LiveWork, with security being completely outsourced to PayPal.
PayPal says that pricing for Adaptive Payments will be announced in November. It’s unclear if the plan will be competitive with Amazon’s FPS pricing. The launch of the new API and services should surely heat up the competition between PayPal and Amazon (which bought Zappos yesterday). Amazon now has Amazon Payments and the beta of FPS, which allows more flexibility for developers than PayPal’s previous Direct Payments API offering. Now, PayPal has struck back with its own flexible API and is trying to engage the developer community to freely build applications off of its platform.
PI, so it should be interesting to see where developers go.
I’d like to see paypal’s cut get very small for payments of 5-50 cents so you can run ad network through it, and not just sell big things where paypal’s cut is a smaller percentage. You can’t do it with Amazon’s FPS because they always take like 5 cents from a transaction. So can’t really do micro-transactions with the whole primary/secondary recipient thing. Let me know if Paypal’s new API achieves this goal.
Wouldn’t ad networks just hold up payment and then payout after a certain amount is accumulated? No need to be paid a few cents after each ad impression.
If your page or site is only generating a pitance of money anyway, waiting a few months for payment is not biggie then.
Harry “I should know
” Wang
James doesn’t make it clear, but I think he means that if for example you develop an app with the intention of collecting micro payments, you’ll be charged the $0.20 per transaction PLUS whatever % applies to your revenue range. If your goods are anything less than a dollar, that’s a big percentage to have creamed off the top.
Not to mention any developer wanting to aggregate such low value payments really won’t be very competitive on price, as they’ll face the same issues.
I wonder how soon someone makes a twitter apps based on this.. i would but i am tied up atm..cheers
TwitPay is the answer.
Paypal is great, but for large international transactions a site will likely need a more robust processor.
So says the “international transaction site” spammer…someone whom I have never heard of.
Harry “like PayPal is not international” Wang
Paypal is great, but for international payments on a large scale most businesses will need a more robust payment processor.
Paypal takes too big of a cut, from currency exchange, from actual payment processing and has bad customer support when it comes to complaints. Regardless we have been using paypal on a Alexa 10K site for over a year now, were using it, but definately not happy about it. They need to cut payments, and as someone said allow micro payments and a easier way to manage subscriptions/payments, currently it is geared too much towards ebay transactions/one time payments only.
Oh and simplifying the API / IPN further (to make it easier to implement for even newbies) would definately bring them newwer customers.
Does anybody know when this api will be availible. I have been waiting for this for far too long.
hmm, only $2000/second? that’s 31M / year. sounds like they are hiding the rest …. best investigate
2,000 * 60 seconds * 60 minutes * 24 hours *365 days = 63 billion. http://www09.wo...input/?i=2,000+*+60+*+60+*+24+*365
What the hell is wrong here?
oops, i missed a few zeros there. was wondering how could this be so. thanks
I’m surprised they aren’t doing more. Don’t forget that the 63 Billion isn’t revenue, because they only get a small percentage of that.
ehm if you’ve seen their fees, “small” is an understatement
$63 Billion is heck of alot. They probably make huge amounts of revenue from interest. Assuming average accounts holder withdraw their cash every 30 days. Sitting on a average cash balance of $5 Billion will generate some health interest for them.
Not sure what interest they they pay their account holders .. if any?
Considering that visa moves close to 3 TRILLION a year…sure 63b is a lot, but still chump change.
Do they give you full control over the user interface (fully faceless API)? This is what I want to know.
I wouldn’t bet against Amazon – they’ll probably buy Paypal too. They are in control of online sales and those that facilitate the transactions.
Amazon has positioned itself as a fierce competitor to all the internet giants.
Apple (expected) = Kindle
PayPal/eBay = FPS
eBay Marketplace = Amazon.com
Google, Microsoft, Sun/Oracle = AWS EC2 & S3
Kudos to one of the best CEO’s in the world; Jeff Bezos. Keep it competitive…
Amazon is neither fierce nor a competitor of Google, Apple, or Paypal in their respective markets.
While in Marketplace they are exceeding all others and in their own a giant, the Kindle has little to no functionality outside of an electronic reader. That leaves it with a distinct competitive disadvantage to the iPod/iPhone.
Right now FPS is only for Amazon’s marketplace and not a payment processing service. In it’s core functionality it does a fraction of what PayPal does in volume.
That is incorrect. My SIP trunk provider allows me to buy VOIP minutes using FPS and I believe JungleDisk uses FPS for billing as well.
Pricing will be announced in Nov.? In 4 months?
this sounds like huge news for our platform! very happy about this
No link to paypal or date of when this comes out? Am I missing something?
Agreed. All I see is pricing will be announced in November. Where are the details?
+1
PayPal doesn’t have anything on their website about it either.. so this is just a vague press release about how they’re going to have some new API? Eventually?
This isn’t why I read TC.
What’s the best choice for a payment gateway to handle very large transactions? 2% to 3% adds up when you’re talking about an electronic transaction of hundreds of thousands of dollars, and even Authorize.Net’s eChecks gateway to do ACH charges a non-negligable transaction fee.
In that case, if you are referring to B2B trxns, then you have terms (i.e. net-30), invoices, and checks (or EFT). One does not use a 3rd party trxn provider in this case as the payment goes from bank to bank.
game on.. wheeeeeeeeeeeee!!! : ))
Wow. I was waiting for this api. Great Paypal!
Leena Rao, take a look here: http://retailzi...com/?page_id=47
We was doing this for years now and was smart enough to know people would take notice.
“Microsoft cloud computing platform Azure is also utilizing Adaptive Payments to let developers who are building applications using PayPal seamless integrate their applications with Azure’s platform. Microsoft is working with PayPal to help developers easily embed billing and payment functionality into applications built off Azure and will offer interoperability between Azure and Adaptive Payments.”
Hmmm… I think my lawyers are now salivating.
Hey this is great!!!
But Paypal API is still missing the ability to deposit money directly into multiple international bank accounts. Some countries such as Bangladesh does not have Paypal.
I was hoping someone may suggest a way to manage aggregated-payments / multi-payments with the ability to deposit money directly into an international bank account. Im looking to pay more than 100 people in multiple Asia/Euro countries and need to find a bank with a good API that allows me to design a control panel gui which allows users to edit/add bank account details for deposit. Further I need a way to deposit money into a bank such as HSBC without incurring a “international wire-transfer fee”.
Any ideas? Or am I missing something?
Matt: I would contact Obopay for your needs in Bangladesh. Search for: Obopay+Bangladesh and you should find an article from a year ago discussing just this topic. I’m not sure your API needs will be met.
WRT wire-transfers, it is generally less expensive to use EFT/ACH rather than wire-transfers, but it really depends on the arrangements between banks (which vary with each unique ‘country-pair’).
Will paypal stop sucking now? I doubt it.
Anything PP does scares me because they are not regulated in the same way credit card companies are and, therefore, are not subject to any restrictions or regulations – and it involves billions of dollars. If you’ve every had a payment dispute of any kind on PP, you know what I mean. 75 days for dispute resolution runs usually for 7 to 12 months. In the meantime, any disputed dollar amount in the sellers account is held hostage AND PP CHARGES YOU $10 per dispute!
You know who’s going to lose in the online pmt competition? Everyone who holds an account and has no one to go to when PP holds your money hostage with no end in site.
This is money, not a score sheet – money. Online pmt system do not protect their customers, so beware every time you use one of them.
I think the big story in all of this is the following: the major Card Brands such as Visa, MasterCard, American Express and Discover have done an exceptional job over the years building a global network of cardholders and accepting merchants to facilitate commerce. It’s now a global standard. They have built substantial barriers to entry for others (look at Revolution Money who has raised around a $100 million to try and penetrate the U.S. market).
Collectively, the internet, globalization, social networks, and mobile phones have been shifting the payments landscape and reducing these barriers. It’s the wave that Paypal and other innovators have been riding and has turned what was a potential threat and minor scratch for the Card Brands into an open wound.
http://www.brai...ptive-Payments/
Well done PayPal. Good to see ‘em staying on top.
Paypal provide a very friendly and fast service but they are relentless when it comes to striving to be the best and getting the biggest market share.
So are ther any live examples of aggregated payment processing via PP’s API yet?
As Amazon only allows aggregated payments to be sent to US customers I am looking for an alternative, or even any ideas on a work around?