In March DeGardener broke out the scoop about PayPal intentions to launch Mobile Checkout. Now it’s finally formal. Matt Weathers, Moile Group Product Manager in PayPal tells us that PayPal will be formally announcing the availability of PayPal Mobile Checkout at the PayPal Developers Conference in Boston today. This is good news for any provider as premium SMS is complicated, sloppy and somewhat overly expensive. Our own web to mobile service, HooQs, will now be able to offer content providers a new monetizing route. 

According to Weathers, the PayPal Mobile Checkout flow is a two page WAP buyer checkout which is managed by APIs. A buyer can pay by logging in with user name and password or phone and PIN.  There’s no need for credit card info or bank info as the APIs are simplified versions of the existing Express Checkout APIs.  PayPal expects to drive selling of a range of products via mobile phone (tickets, services, hardgoods, donations, transportation cards, etc).  

“PayPal put a lot emphasis on reaching buyers and on solving the discovery challenges and have partnered with a set of design partners for that purpose. The APIs were designed to maximize merchant and developer control over the buyer experience.  Checkout can be plugged into the process regardless of bearer - SMS marketing, search, WAP sites or client.   The merchant sends the product details via the API and then gets a WAP link that can be delivered or displayed in SMS or WAP.  It can also be triggered by J2ME client (on most modern phones), which can present an almost unique option for game and mobile application developers outside the operator deck.”  

PayPal is very well positioned to take leadership of WAP based billing in the United States. This ecosystem takes a lot of presence and committed partners, and a player like PayPal holds a great position for obvious reasons. In Europe, however, PayPal will face quite some competition from quick runner Bango.  [correction: Bango works with PayPal as a channel and therefore they do not compete but collaborate - Thank Matt and Ray for correcting] In any case, these recent development is very good news for all service providers who wish to monetize the mobile channel.

A demonstration of the mobile search is now on PayPal’s WAP home page (https://mobile.paypal.com/) under the link “Buy something”.  Weather stresses that PayPal is definitely not getting into the search business,  “The search demonstration is purely designed to show the potential for mobile commerce”.

      

PayPal is about to make a strategic entry into mobile web with the launch of Mobile Checkout, a mobile service that will allow anyone with a PayPal account to buy things using their mobile browsers. 

Rumors have been flying around as PayPal apparently has been diligently working on the product for quite some time. In fact, I wouldn’t rule out an announcement next week at CTIA. The product is in beta right now and is planned for release later this year. Once out, PayPal Mobile Checkout will allow people to buy stuff they’re searching for on their mobile phones.

We could not get an official comment from PayPal of course, but a credible and passionate inside source has indeed verified the rumor and was kind enough the leak the following screen shot:

The payment process is the same as PayPal online – you enter your PayPal user name and password. Along the way you can create a pin so that future transactions are much faster. You don’t have to fill out a long web form of addresses and credit card numbers – which is unsafe and a pain on a mobile phone.

The mobile web has been yearning for payment solutions for a while now. Premium SMS is commonly used for mobile payments but mostly for single, micro transactions such as voting, media and alerts. While premium SMS is very intuitive, it is not trouble free. Mobile operators grab roughly 50% of the revenue and there have been quite a few reliability issues. The opportunity for real ”Mobile Payments 2.0″ is definitely there.

PayPal announced last week that it has reached 35 Million subscribers in Europe and about 150 Million subscribers worldwide. It was only expected that the successful web giants would start porting their services to the mobile space and PayPal is apparently the first significant player about to make an entry.