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PayPal Inc. has introduced a capability for its new Adaptive Payments service that lets consumers pay merchants with a credit card while within an application, regardless whether the consumer has a PayPal account. The San Jose, Calif.-based e-commerce processor also announced late last week it is delaying until the fourth quarter new payment services—and associated pricing—to handle payments in new markets such as rent, payroll, and business consulting.
The new in-app payment capability, dubbed Guest Payments, responds to demand from developers looking for ways to let customers make payments by credit card, according to Naveed Anwar, senior director of PayPal’s developer network. “We committed that 30% of our roadmap would be based on community feedback,” he says. With the new capability, customers can check out of a merchant’s site with a credit card and have the transaction processed by PayPal. The merchant need not have a merchant account and the customer need not have an account with PayPal. Regular PayPal pricing applies to the transactions, with rates starting at 2.9% plus 30 cents for small-volume merchants.
The new service leverages a platform PayPal introduced in November and opened to developers with an application programming interface and service called Adaptive Payments. The API allows for so-called chained, parallel, and split payments, letting consumers pay more than one merchant in a series or split a payment among several merchants. Guest Payments may also be well-suited to mobile payments, where users want a fast and easy checkout without the need to leave an application. “People are looking for a quick in-application payment flow,” says Anwar.
Merchants have already begun integrating the new service, Anwar says. “There are some developers who have been in touch with us and are implementing this,” he says.
The delayed payment services, which also rely on the new open platform, were originally set to roll out in the second quarter but have been pushed back while PayPal deals with a checkout process that has proved to be trickier than the company had thought. “It does become a little bit complex to roll it out in every single segment,” Anwar says. A number of PayPal services, such as Express Checkout, were designed several years ago and require more work to be compatible with the new markets, he points out. “We want to make sure we do it right,” he says.
When they become available to developers, the services will extend PayPal into a range of markets, such as rent, where it has traditionally not operated. The new pricing is especially attractive to potential merchants in comparison with standard PayPal fees, says Anwar. “Our developer community has been anxious,” he says. Same-day payments will cost 0.75%. If merchants are willing to wait three days for settlement—thus reducing PayPal’s risk—the pricing becomes a flat 50 cents per transaction.
