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PayPal Aims At Developer Integration

PayPal had a record year in 2005, a trend the electronic payment provider is hoping to continue with a newly launched developer integration center.

PayPal's new integration center is an effort to make it easier for developers to understand and integrate PayPal into their applications. The effort comes as Paypal faces the potential specter of a significant new entrant in the electronic payment market, search engine giant Google.

Still, any new player in the electronic payments space would be up against a formidable competitor in the form of PayPal. At year end 2005, PayPal claims that it had 96.2 million total accounts. Its fourth quarter 2005 revenues were reported to have increased by 48 percent on a year over year basis to $304 million dollars. That translates into consumers spending $1,021 per second using PayPal during the last quarter of the year. The total value of all transactions on PayPal in 2005 was $27.5 billion dollars, up by 45 percent over 2004.

Developers are a key part of PayPal's growth strategy. The integration center is intended to simply the knowledge base that enables developers to integrate PayPal into their applications.

Tim Villaneuva, general manager PayPal Platform and Developer Network commented that PayPal has learned a lot from its developer network since launching PayPal Website Payments Pro last June.

Villaneuva explained that PayPal learned where developers had "hiccups" in the integration process. Payment Pro includes sophisticated integration via an API. .

"One of the issues we saw is that developers would be into integration but lack the overall context," Villaneuva told internetnews.com.

The Integration Center aims to provide a "handholding", end to end experience of how developers can get their integration accomplished across the various products in PayPal's product lineup. Rather than have just a collection of documentation, the integration center provides a wizard type approach that show developers the proverbial light at the end of the tunnel.

"It really fills the gap between where marketing ends and technical integration starts, taking it all the way to completion," Villaneuva said.

Villaneuva said a survey PayPal had a third party conduct at the end of 2005 revealed just how important developers are. The survey found that 45 percent of the time, developers are the sole decision maker of which payment service provider a merchant will use and they are a key player in the process 44 percent of cases.

Not surprisingly, awareness of PayPal as a payment service was nearly ubiquitous at 99 percent. The study also found that PayPal was the most recommended and integrated payment service provider of all other providers with 83 percent recommending PayPal and 75 percent had actually already integrated it. The number two payment service provider was VeriSign with 54 percent recommending and 44 percent integrating.

VeriSign's number two ranking is a win win for PayPal. In October of last year PayPal announced it was acquiring VeriSign's payment gateway business, which reportedly processed over $40 billion in payments in 2004.