The payment processor that is most friendly to mobile will win.

PayPal is all about their new shiny Open API initiative and are bringing to the front lines the x.com domain name as the home of this API.  I’m all for openness and love that PayPal is adapting with their “Adaptive API” by allowing transactions to happen seamlessly on websites without leaving them but what about mobile?

What needs to happen is for PayPal to introduce payment interfaces that are friendly to Webkit browsers (at the very least) – considering iPhone’s dominance and the growing number of Android handsets – both released and expected.

eBay made PayPal the payment solution of choice in peer-to-peer commerce and it’s safe to say that the majority of internet and mobile users have a PayPal account.   The problem is (or was) that PayPal couldn’t be used realistically as a payment provider on mobile devices because the user would be redirected to PayPal.com to make their final transaction.

I suspect that the Open API will be flexible enough that deep integration of PayPal in a mobile app session will now be possible.  In fact, I’m tempted to try  building something like this on my own with the reason being that Android developers are a little bit confused about whether it really is a tall order or not to expect users to buy an app with a Google Checkout – I hardly think so having rarely used my Google Checkout account unless it were the only option available to purchase with.

A deep PayPal integration (either opening a web view inside the app that utilizes the new Open API) should only help with paid app conversion on the Android platform and open the ability for the equivalent of in-app purchase feature that exists in the Apple iPhone SDK.