PayPal’s developer network senior director, Naveed Anwar, and VP, platform and emerging technologies, Osama Bedier, who were in Sydney for this week's Web Directions conference, chat to Computerworld about PayPal's plans to open its payment platform to third-party developers.
How does PayPal give businesses an online opportunity?
OSAMA: We’ve historically focussed lots of engineers within PayPal leveraging this engine to build the next business on top of PayPal, and what the new platform will do is expose these capabilities to a third-party developer in a safe and secure way, so they can do that innovation themselves and in the process unlock a lot of different business models that are being held back by the inflexibility of the payment systems that already exist and the lack of interaction between mobile payment environments.
About a year and a half ago we started experimenting with whether we could safely and securely open up this unique asset to a payment developer community and now we feel we’ve gotten it right and that we can start exposing these services in a pretty big way.
How is this different from the developer program launched in July?
OSAMA: The developer program we launched in July was about establishing whether there was a development community, how vibrant it was, whether we could leverage it and give them opportunities to integrate PayPal onto e-commerce sites already operating online. We found there was a very vibrant developer community here and that we felt we needed to give them much access to this payment platform.
What opportunities exist in the market?
OSAMA: They range from things like, with payroll today, if you look at, even within our PayPal system there are actually thousands of guys using our send money capability to pay employees around the world. If you employ an engineer in India, and you want him too build a website for you, there are so many examples of this that already exist, and that’s just using the email payments platform. But what we announced in July as an example is a company called LiveOps that has built an innovative contract agent model. So they’ve taken the call centre approach and made it into a virtual call centre of stay at home workers, 20,000 of them. But, it presents a pretty unique and interesting payroll problem - how do you pay 20,000 contract workers, who don’t really have a contract with you per se? LiveOps is just a start up, so they’re leveraging our system to pay these stay-at-home workers without having to use the conventional payroll approach.
There are other examples like remittances, device payments, digital goods, whether it’s paying for books or journalism. Digital goods are exploding right now. A lot of what we’re seeing in our system is some of the fastest growing business online, are those who are re-inventing conventional written or offline software, and turning it into digital goods and growing at a phenomenal rate. Also, the face of gaming is changing faster than we can imagine, and Facebook are claiming 300 million active users, but everything is now becoming social. Everything from your mobile phone, your contact list is now coming into your Facebook contacts, to games, to how people text each other. So, the whole social networking phase is changing how digital good are consumed as well and it’s changing the way oh how payments need to happen.
Because we hadn’t opened up our payments platform, different platforms are starting to think about going into payments to solve those unique problems themselves. We expect that as we open up our platform, we also want to integrate it into some of the largest platforms that already exist. We announced back in July that Microsoft would be one of those, but we plan to integrate payments into many of these platforms so that the developer can not only find the payment capabilities they need, but they can find it in context, they can find it in the platform that they need most. We extend that analogy of the HTML payment button, making payments so easy, into the 2009 version of it which is cloud computing and social networking etc.
In the end, what we’re trying to do is, as opposed to limit the opportunities to the $650 billion of e-commerce that already exist, broaden it to the much greater $30 trillion dollars of money that moves around the world, and allow the developers to help us address all those opportunities.
I would call this ‘the age of the developer’. The developer has been so central in the past year to defining the next generation of the Internet.
What’s the opportunity like for developers to make money?
OSAMA: The ones that are successful are the ones that make money. The platforms that are succeeding are the ones that present that opportunity. There is a whole slew…platforms aren’t a new concept, they’ve existed for the last 10 or 15 years, but what’s unique here is the iPhone came with the App Store, so the ability to sell your app and get distribution, so it’s not just here’s the technology, go build it. You could build an application for the BlackBerry for five-years prior, but how do you get distribution? How do you collect money? Those were problems that hadn’t been solved. Apple came up with the solution that allowed you to get distribution and make money. They used the same payment mechanism they had in place for iTunes and applied it to applications.
Payments is fundamental to innovation. You’ve got to have some incentive to put all of that effort into it, it’s not just for the fame. Well, some of it is, but you’ve got to be able to make some money. The inflexibility of payment systems, have prevent developers for making applications for mobile phones. We think out platform will actually unlock a lot of that potential, not just for mobile phones, but for almost any Internet connected device.