August 5, 2004, 12:00 AM

PayPal gears up for its venture into the bigger payments world

PayPal has completed the technological work it needed to do to become a payments provider for retailers and is now ramping up its sales force to take its service beyond its eBay base.

PayPal has completed the technological work it needed to do to become a payments provider for retailers and is now ramping up its sales force, Todd Pearson, general manager of merchant services, tells After several months of developing application protocol interfaces that allow merchants to integrate PayPal into their order management systems, the company this spring deployed a sales force to call on merchants. It has already signed and B&H; Photo as merchants, both launched with PayPal’s API services. Earlier, and TigerDirect had agreed to accept PayPal.

PayPal started as a way for buyers to pay sellers on Just over a year ago, PayPal realized that with 50 million users and a proven network of sellers on eBay, the company had an opportunity to expand to merchants at large, says Pearson, who chaired a series of sessions on online payment, security and fraud at eTail 2004 East in Fort Lauderdale, FL, on Tuesday.

A large obstacle in moving into the bigger merchant world was the issue of APIs, Pearson says. Retailers need PayPal integrated into their order management systems so they can, for instance, easily reverse a transaction and make the necessary inventory and customer data changes without having to go into one database to reverse the PayPal portion of the transaction, then into another database to update inventory status and customer records. “Everything needs to be API,” Pearson says.

Once that coding was complete, PayPal developed a merchant sales force made up of one team to sell to larger merchants and another to sell to smaller merchants who have a shorter sales cycle and thus can implement faster and get transactions running through PayPal sooner.

While he can’t reveal names, Pearson says PayPal is in serious talks with 60-70 other merchants. In addition to direct selling, PayPal sells through Cybersource Corp., which recently completed its PayPal API development.

Merchants with $100,000 a month in PayPal volume pay a 1.9% discount fee and 30 cents a transaction, Pearson says. Larger merchants can negotiate pricing, he says.


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