Inside Social Games

EBay’s leading payment company, PayPal, is hosting a multi-day developer conference in San Francisco, called “PayPal X.” Direct payments for virtual currencies are the main ways that most social games make money, and PayPal is the single largest payment provider — eBay knows this, and it has been improving PayPal’s features to make it more relevant to today’s online payments environments.

The goal is to “to disrupt ourselves before others disrupted,” as eBay chief executive John Donahoe said on stage today, referencing the many other types of direct payments services currently competing, from Amazon’s Payments service to mobile payment services like B0ku and Zong. Specifically, PayPal is making it possible for developers to let users create accounts and buy virtual items from within applications, instead of having to go through a multi-screen checkout process.

Called the Adaptive Payments API (Application Programming Interface), some details have already been out for month. Here are the new ones, from the company:

Currency conversion: Automatically converts currencies using current exchange rates.

Pay Anyone: Banks and other financial institutions can let customers send money, if they are already logged in to their bank accounts. These customers won’t need a PayPal account to use the service.

Pre-approvals: Enables developers to create reusable payments agreements between buyers and sellers. While payment approval happens online, the actual money movement can occur offline at different intervals, and through multiple devices that are not necessarily Internet-connected at the time.

The following Adaptive Payments API features have already been in live testing, but now they’re fully available:

Send Money: Developers can build person-to-person (P2P) solutions or business-to-business (B2B) payment applications on their platform of choice – whether it’s the mobile phone or a social networking site.

Chained Payments: Developers can take a cut or distribute funds from PayPal payments as they happen.

Parallel payments: Developers can enable buyers to send money to several people in one payment, which is ideal for purchasing multiple items from different sellers, or even for payroll applications.

Some other new features are now available, that may be of interest to social game creators. Developers can let customers create PayPal accounts from within their applications. The company’s “micropayments” pricing, intended for transactions under $10, is “5 percent plus 5 cents” and Paypal “will soon extend its free P2P pricing to developer applications.”

Also planned — for the first half of next year — is a form of mobile payment where a developer can add PayPal code to create a checkout button, without collecting financial information from the user.

PayPal told the Financial Times that the additional activity from applications on Facebook, the iPhone, Twitter and other new developer platforms, could double its current $60 billion in payments volume and $2.4 billion in revenue, possibly reaching $120bn in volume and $5bn in revenue by 2011.

You can watch more sessions from the conference, here.