Web 2.0: PayPal wants payment apps in your phone and fridge with its new platform

PayPal is opening up a platform to developers on November 3, to spur innovation in outside payment apps that can connect with anything as far out as physical advertisements or home appliances.

“PayPal will be the first truly global online payment service to open its platform to everyone,” said president Scott Thompson, speaking at the Web 2.0 Summit today in San Francisco. “We’ll be releasing APIs that will allow anyone in the industry to create new ways to reinvent the $30 trillion payments industry.”

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Thompson said the company is already working with dozens of consumer and mobile device manufacturers at both the enterprise and startup level. He said the company will give more details at a developer conference in San Francisco on Nov. 3.

He showed off a concept video of people buying movie tickets through street advertising or their refrigerators, which detected whether they were low on milk or sugar. More immediately, he envisioned applications that could be built into televisions, mobile phones or social networks.

Here’s more directly from his speech:

“All three of my teenage kids have mobile phones. Not one of them seems to make a phone call on that phone. I literally can’t recall the last time one of them picked up the phone and tried ot make a call. In fact, they say that’s completely old school. They use text-messaging and Facebook.

When it comes to money, my son wouldn’t know how to use an ATM. Money is transferred online to a debit card when he wants to be online. So it begs the question, is it possible that innovations as young as the ATM, mobile phones and e-mail are already become obsolete?

I hate to tell you — I think so.

Better things are replacing them each and every day at a faster rate than we’ve ever seen before. This is the compression cycle of innovation happening right befor eour eyes. Big changes have happened more quickly than ever.

Innovation has moved form the hands of a few to the many. The Internet is letting everybody in on the game. Look at Facebook and Twitter in communications. Look at YouTube in entertainment. eBay and Amazon for e-commerce. These companies have grown and changed at rapid rates. Their wide distribution have led to incredible popularity on a global scale. But payments are different.

Payments have been behind in the innovation curve, evolving much more slowly than other industries. So you might ask: why is that?

Of course, some of it is because the industry has been very slow to embrace new technology. A lot of it is due to concerns of security and threat of fraud. How can you put something as important to you as money in the hands of many? Add to that to the fact that payments are a highly regulated, networked business. In order for things to work at scale, you have to have the sender and receiver cooperating on all the transactions. Associations are key. These associations take an awfully long time to build. That’s not to say it can’t happen with payments. There’s clear sign in the market that people want something better than what they have today. Simple things like cash and checks are dying a slow death.

Wired Magazine recently included cash as one of the things future generations might not know about. Cash, right along with yellow pages, Walkmen, VCR’s and the Yellow Pages.

When PayPal was created, we removed friction and sped up the velocity of trade. It skyrocketed literally overnight through eBay and what we’ve known for a long time, is that the speed and security of electronic payments shouldn’t just be limited to eBay.

Payment innovation needs to move from a few big entities to the hands of many. There are literally millions of people who want to bring it, but they need a way to get paid to monetize these concepts. So I’m proud to announce a developer network.”