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

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

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

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

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.

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