PayPal is set to open up its platform to third party developers in a move the firm says will make it easier for them to make money from their ideas.
The new application programming interface (API), called Adaptive Payments, will give developers more flexibility in building apps that move money between PayPal accounts.
The API allows straight payments from customers to the PayPal accounts of receivers such as owners of Web sites or widgets on social networking sites.
It also means developers can build applications for "parallel payments", enabling a sender to make a payment to multiple receivers.
PayPal says this means users can set up a shopping cart that enables buyers to pay for items from several merchants with one payment. The cart would allocate the payment to merchants who actually provided the items.
In addition, "chained payments" will enable a sender to make a single payment to a "primary receiver", who can then keep a part of it and send the rest to "secondary receivers".
The firm says this could be used by companies such as online travel agencies which handle bookings for airfares, hotel reservations and car rentals. The primary receiver allocates their commission with the secondary receivers then getting their share of the payment.
The new API is similar to Amazon's Flexible Payments Service, which was launched in beta in 2007 as part of the e-commerce giant's attempt to muscle in on PayPal's territory.
However, in a blog post responding to TechCrunch, which broke the story, Osama Bedier, VP, platform and emerging technology, PayPal, insists Adaptive Payments is "not an effort to 'crush Amazon's fledgling payment service'".