Paypal plans app for smartphones, Titanium Commerce

October 26th, 2010 - this article is free to republish with open public license

The online bill pay company paypal plans to get into the mobile development arena. An upcoming initiative will bring the company to more users on familiar handhelds such as the iphone.

A PayPal account can be funded with an electronic debit from a bank account or by a credit card. The recipient of a PayPal transfer can either request a check from PayPal, establish their own PayPal deposit account or request a transfer to their bank account. Recipients may not be able to use received funds without providing bank account or credit card information to Paypal. PayPal is an example of a payment intermediary service that facilitates worldwide e-commerce.

PayPal performs payment processing for online vendors, auction sites, and other commercial users, for which it charges a fee. It sometimes also charges a transaction fee for receiving money (a percentage of the amount sent plus an additional fixed amount). The fees charged depend on the currency used, the payment option used, the country of the sender, the country of the recipient, the amount sent and the recipient’s account type. In addition, eBay purchases made by credit card through PayPal may incur a “foreign transaction fee” if the seller is located in another country, as credit card issuers are automatically informed of the seller’s country of origin.

Right now, it’s tough for mom-and-pop outfits to easily accept mobile payments. PayPal hopes to bridge that gap with a new project called “Titanium+Commerce,” announced Tuesday at a company conference.

“It’s a boon for merchants if they can forge tighter relationships before, during and after transactions with their customers,” says Scott Schwarzhoff, vice president of marketing at Appcelerator, a development platform that is partnering with PayPal on the initiative.

Titanium+Commerce aims to go beyond simple payment processing by allowing merchants to design custom apps that will run across different mobile platforms, like Google’s (GOOG, Fortune 500) Android and Apple’s (AAPL, Fortune 500) iOS. From there, merchants can add their choice of capabilities, including purchases of real and virtual goods, online coupons, shopping lists, daily deals and more.

Titanium+Commerce launched in beta testing on Tuesday, and is scheduled to be available to PayPal’s 8 million merchants in the first half of 2011.

Shoppers log in with their PayPal accounts, sparing them from keying in their credit-card information for each transaction. They will also be able to share deals with friends using PayPal’s mobile services.

“It’s easy for huge companies to put in a lot of manpower on mobile strategies,” Schwarzhoff says. “We want to make it simple for the corner store to do the same thing. ”

Mobile payments taking off: That corner store may not have been interested in phone payments a few years ago, but the market is becoming a major piece of the shopping landscape. New York-based ABI Research expects mobile commerce to be a $110 billion field by 2015.

PayPal clearly wants to be a key player. In addition to partnering with Appcelerator, PayPal parent company eBay (EBAY, Fortune 500) joined in the $9 million funding round Appcelerator announced Tuesday.

PayPal also inked another mobile deal Tuesday with business-focused payment processor VeriFone, which is working to integrate PayPal into its PayWare mobile credit-card swiper.

Date October 26, 2010