After attending PayPal’s Developer Conference this week, I left with some conclusions as it relates to commerce on the web. First, PayPal will continue to dominate the online payment market because: 1) It has more years of experience in dealing with fraud, security, international, and regulatory challenges than any other provider; 2) By opening up the PayPal platform to developers, they have effectively expanded their available market by enabling “new uses and new users”; 3) The added benefit of opening the platform is that PayPal learns more from the real-world applications which enables them to improve their products more quickly; 4) Virtual currency, micropayments, recurring billing are all growing and enabling new business models that are more viable than “traditional” online commerce (E.g. physical goods); 5) Social commerce will also expand businesses and consumers go to “trusted” marketplaces such as Facebook and PayPal’s Adaptive Payments will enable commerce applications within these applications.

PayPal’s CTO outlined a few key objectives one of which is to make PayPal a reliable online provider of personal identity. The problem they are attempting to solve is that we can have dozens of online accounts, each with a different username and password and this is unnecessary. With personal credentials already verified within one’s PayPal account, we can anticipate companies relying on those credentials, and users condensing or consolidating their online account information. This is similar to the goal of OpenID.