PayPal to allow account-free app payments

PayPal has introduced Guest Payments, a service that will accept credit card payments without requiring the buyer to have a PayPal account.

The service, announced late last week, will enable developers to build payment processing directly into apps and software rather than having to route it through PayPal and the buyer's account.

Sites offering the Guest Payments facility will be able to collect name and card details, with payments then billed through PayPal immediately, rather than directing customers to the PayPal site to sign in before the purchase can be completed.

The latest addition to the PayPal Adaptive Payments API, which launched in November last year, Guest Payments allows developers to offer direct credit card payments in applications without requiring PayPal membership.

The system is designed for use in software on any platform, including mobile phones, and will be of specific benefit to app builders who typically charge small amounts of money per transaction, with PayPal believing customers will be more likely to complete purchases particularly small ones if the payment system is simplified.

"Guest Payments allows developers to collect credit card payments without requiring their customers to open a PayPal account, eliminating the complications merchants, developers and startups face in accepting credit cards," PayPal senior developer Naveed Anwar said on the PayPal blog.

The news comes not long after established credit card powerhouses Visa and Mastercard both announced their own moves into new ground PayPal's ground.

Visa has announced the pre-charged "PayClick" system in Australia, with other markets set to follow in the coming months. Rival MasterCard, meanwhile, announced last month that it would release Open APIs for third-party and independent software developers later this year.

And with most app stores already having their own payment systems in place, it remains to be seen how successful PayPal's attempts to reposition itself will be.

Nevertheless, the company itself remains confident. "We're thrilled to provide this new functionality to meet this need and look forward to seeing the ground-breaking apps our developer community will create with this," Anwar said.

PayPal claims it processed $141 million in mobile transactions last year, a six-fold increase on 2008's $25 million.