PayPal to Launch New Simplified Payments Flow for Social Games

PayPal will launch a new suite of developer tools at the end of October that will make it easier for social gamers to pay as they go, potentially on-boarding millions of new casual gamers who are deterred by the hassle of topping up on virtual currencies.

“Right now, if I’m playing a game, I have to leave the flow, go to a different web site, authenticate myself, authorize a payment and then come back to the game,” said Osama Bedier, the vice president of product development at PayPal. “We’re going to have an inline shopping experience where you can authorize a transaction on the screen right there in the game.”

The launch will be paired with a new micropayments feature, which will give players the option to continue the game while paying in increments of just 50 cents or a dollar. Right now, players usually have to top up in bigger increments of $10 or 20 to continue playing games.

“It makes sense to alter the point at which browsers become buyers,” he said, adding that PayPal has 87 million customers. The effect will be to have more a “metered” approach to gameplay, almost like the way you’d put an additional quarter or two in to play an arcade game.

“What I expect is to have the experience of ‘I want that virtual tractor!’ then I click on it and it automatically pulls from my account,” he said. “It will be like how long-distance phone calls are billed. It gets tallied up and you get billed at some normal interval. It takes all the friction out, allowing you to just enjoy the game.”

PayPal is currently testing the new workflow with a handful of gaming companies and will launch the tools at the end of October at its San Francisco-based Innovate conference.

As for PayPal’s relationship with Facebook, Bedier only expects it to deepen over the next few years and said he’s not concerned that the social network will at some point encroach on its turf.

“It’s hard for us to be concerned about potential competition,” he said. “The mistake most guys make trying going into payments is assuming that it’s just collecting a whole bunch of credit cards and figuring it out later.”