PayPal launches open payments system

eBay-owned e-commerce business creates PayPal X for in-application payments

The recent explosion in third-party applications and games for social media sites like Facebook has created a huge demand for smart, fast, and effective payment systems that can be implemented seamlessly into said applications. Now, PayPal has decided to kick off its own payments system specifically for PayPal users.

The eBay-owned company announced at PayPal X Innovate 2009 on Tuesday the launch of an open payments system called PayPal X, which allows users to make payments through their PayPal account all while inside of an application.

No longer will users have to be forwarded to a PayPal site and sign-in to verify payments. Instead, sign-in and verification will occur right inside of the given application. First announced back in July, PayPal X features completely open APIs, meaning application developers have free reign to customize the platform before actual implementing it.

Silicon Valley-based startup PlaySpan is already experimenting with PayPal X via a virtual goods marketplace and micropayment platform.

After dominating the online payments market for years, PayPal has seen increased competition from online retail giant Amazon and even Google. Since launching Google Checkout in June 2006, Google has made gradual improvements and added various features to the payment system. Most recently, Android developers have been given the option to use Checkout as the payment method for their mobile applications. Amazon too has been exploring the world of payments systems. Just last week, the launch of PayPhrase signaled Amazon's foray into simplifying the payment process by removing the need for users to input credit card information.

In light of these recent innovations from PayPal's competitors, eBay CEO John Donahoe hopes that that PayPal X will "disrupt ourselves before others disrupt us," exemplifying the company's desire to evolve with  changing Web environments.