PayPal and Facebook Team Up to Further Monetize Social Media

written by: Richard Kastelein

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PayPal has announced the upcoming availability of PayPal for digital goods, a new in-context, frictionless payment solution that lets consumers pay for digital goods and content in as little as two clicks, without ever having to leave a publisher's game, news, music, video or media site.

That's compelling news on it's own. But this is the clincher. Sheryl Sandberg announced that Facebook will integrate PayPal's new digital goods payment flow to make PayPal the way to make purchases on Facebook. Other companies who have announced they are working with Paypal include,, GigaOM,, Ooyala, O’Reilly Media, Plimus, Tagged, Tyler Projects and Ustream announced that they are also using PayPal to monetize the growing opportunity in digital goods.

This is also of interest for convergent media from the big screen side - not only for PC, Mobiles, and tablets... but also eventually for TV. Paypal is the leading payment methods for digital goods, giving merchants global reach with 90 million accounts in 190 markets around the world. The company closed out 2009 with $2 billion of total payment volume for digital goods and reached $1.3 billion in the first half of 2010. Facebook has more than 500 million active users with 50 per cent of our active users log on to Facebook in any given day - and each user has 130 friends. People spend over 700 billion minutes per month on Facebook.

Once logged into my Paypal account on my connected TV in the future, I should be able buy easily when it connects to my account via IP. Business accounts at Paypal are backed with credit cards and bank accounts. And not having to leave the site or 'channel' in the future is critical. Skype also has a fresh deal with Facebook and is a longtime partner of Paypal - there is some interesting cross pollination going on lately. Here's a scenario.... a few years from now... I will be able to hire a consultant via Facebook to give a half hour of coaching via Skype Video and Chat and pay him via paypal on the fly - right on my TV. 


This is also online equivalent of dropping a quarter in the slot to buy a newspaper or play a video game, PayPal's new solution solves a key problem for the digital goods industry by offering a faster, safer and more cost-effective way to send and receive micropayments globally.

The new solution offers PayPal's competitive fee structure for micropayments, with pricing at 5 percent plus 5 cents for purchases under $12 -- lower than the fees typically charged by payment processors in the digital goods industry. Every time a customer purchases content, publishers and merchants get paid quickly, giving them fast access to their funds. PayPal for digital goods will be available late fall this year.

At PayPal's second annual Innovate developer conference, parties  noted:

"Since launching PayPal's open platform a year ago, PayPal has learned a lot from the developer community and evolved our platform to meet the needs of this dynamic global market," said Scott Thompson, PayPal's president. "Our developer community is changing the way people shop, get information and access entertainment. And together, we're changing the way people pay for those things. I couldn't be more excited about the opportunity ahead."

"The convergence of mobile, social networking, and location-based technology is creating tremendous opportunity for developers today," said Osama Bedier, vice president of platform, mobile and new ventures for PayPal. "It's like the gold rush of the dot-com era, only bigger and smarter. PayPal X is all about helping developers monetize the opportunity, and that's what Innovate 2010 is all about."

"Our readers want their news on demand, whether they're on a laptop, a mobile phone or a tablet," said Mary Beth Christie, head of product management at "PayPal helps us provide the experience our customers expect, along with flexibility to experiment with payment mechanisms for subscriptions. This gives our customers the flexibility to pay for what they want, when they want."

"The decision to purchase digital goods and content usually happens on impulse, so the act of paying needs to be as quick as that impulse," said Sam Shrauger, PayPal's vice president of global product strategy. "PayPal for digital goods is an ideal solution for game developers, newspapers, bloggers, media companies, and anyone who is looking to monetize premium digital content around the globe."

Because PayPal for digital goods is built on PayPal's sophisticated fraud prevention engine, developers don't have to worry about building the systems required to protect customers' sensitive financial information.

Product announcements made at the conference include:

PayPal for Digital Goods

PayPal X now provides an online checkout solution designed for digital goods. PayPal for Digital Goods allows consumers to check out in as little as two clicks without being forced to leave their gaming, video, news, music or any other digital experience mid-session. The solution leverages PayPal's pricing for micropayments - just 5 cents plus 5 percent of the transaction. With PayPal's sophisticated fraud protection technology, it brings another level of security to the digital goods market. And with 90 million active accounts around the world, PayPal helps digital goods providers sell across borders and reach a broad global customer base.

Facebook and are using PayPal to monetize the growing opportunity in digital goods.

PayPal Embedded Payments

Addressing a key developer request, PayPal X now provides an online checkout solution for physical goods without having to leave a merchant's app or website. Consumers can create a PayPal account, view payments details, choose a shipping address and approve the payment without being redirected to PayPal, creating a better customer experience and increased customer retention for developers. FundRazr and PayPal Innovate 2009 alumni developer Payvment are early adopters of this new checkout solution. Delivering this product is part of the promise PayPal made at Innovate 2009 to dedicate 30 percent of its product roadmap to requests from the developer community.

PayPal Apps

PayPal is introducing the beta test of PayPal Apps, which will allow developers to embed applications directly on the PayPal website. PayPal Apps will include services such as small business tools, buyer and seller tools for eBay (Nasdaq:EBAY), and new enhanced ways for consumers to move money electronically., CreditKarma, Expensify, Freshbooks, Shipwire and Zuora are already building apps into Developers attending Innovate were given exclusive access to the beta test, and it will be available to a broader audience next year.

PayPal Business Payments

PayPal is introducing PayPal business payments, a fast, secure method for sending and receiving payments for a flat 50 cent fee. The pricing is designed to lower overhead, reduce invoicing costs, and accelerate expense reimbursements for business services such as payroll, disbursement and rental payments. Early partners using PayPal business payments include, Expensify, Freshbooks, Harvest, Plastic Jungle, and Zoho, among others.


VeriFone announced that it plans to integrate PayPal into its merchant iPhone app and secure credit/debit card reader. PayPal's Mobile Express Checkout product is now available for merchants, helping them deliver a fast, safe two-click checkout experience on a mobile device. PayPal also unveiled new functionality and enhancements to the Mobile Payments Library, and introduced PayPal for Mobile 3.0, its latest iPhone app with location-based features. More details can be found here.


Six partners announced solutions based on PayPal X including Discover and Bling Nation. All partner press releases can be found on at

Innovate 2010 is the only developer conference dedicated to payments. The conference, at Moscone West on Oct. 26-27, brings together developers and industry experts to explore three main areas that are changing the way we pay: the phenomenal growth of mobile payments, the rise of social commerce and the move to Internet-enabled local payments.

Follow PayPal on Twitter: #xinnovate, @PayPal and @PayPalX. For additional information on PayPal X, please visit

Mobile Express Checkout

PayPal announced the availability of Mobile Express Checkout, a secure two-click checkout experience on a mobile device. Consumers will have the ability to opt-in and remain logged in across apps to make purchasing even faster. The solution is easy to deploy for any merchants who already have Express Checkout on their online stores. Beta merchants have reported double-digit sales growth on their mobile stores after adding Mobile Express Checkout.

Starbucks will use Mobile Express Checkout for quick and easy reload of Starbucks Cards directly from its Starbucks Card Mobile app for iPhone and iPod touch(R).

Beta merchants have reported double-digit sales growth on their mobile stores after adding Mobile Express Checkout. PayPal also announced that guest payments, the ability to accept credit card payments in addition to PayPal, will be integrated into Mobile Express Checkout in the first quarter of next year.

Mobile Payments Library

PayPal is adding key functionality to the Mobile Payments Library by supporting preapproved, chain and split payments. Developers can now use preapproved payments for subscription-based business models and use split and chained payments to take a cut of transactions between buyers and sellers. As with Mobile Express Checkout, consumers can opt-in and remain logged in across apps to make purchasing even faster.

PayPal Mobile for iPhone(R) 3.0

A new location-based feature allows PayPal iPhone app users to find businesses accepting PayPal wherever they happen to be. Merchants can attract nearby customers to their stores by sending deals and promotions to customers' phones, and customers can pay for goods or services at local outlets with PayPal or a BlingTag(R) from Bling Nation. This new local service is initially available in beta in the San Francisco Bay Area. Interested merchants or service providers can sign up at


VeriFone is joining the PayPal developer ecosystem and will be the first device manufacturer to collaborate with PayPal to offer merchants the ability to take credit card and PayPal payments anywhere using its PAYWare mobile merchant app. The new service will also let customers "bump to pay" using functionality from Bump Technologies built into the PayPal app and the PAYWare app. This will allow the millions of PayPal merchants who have both an online and offline presence to accept payments wherever they happen to be.


PayPal has teamed up with Appcelerator, the leading platform for mobile, desktop and iPad(TM) applications, to make it easy for PayPal's 8 million merchants to create mobile commerce apps. Appcelerator allows merchants to build apps on all three major mobile platforms (iOS, Android(TM) and BlackBerry(R)) from one Web code base. PayPal and Appcelerator expect to launch the joint mobile commerce offering in 2011.


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