PayPal is to beat Amazon with its new Adaptive Payments API

According to techcrunch.com PayPal is currently deploying a more flexible payments API, Adaptive Payments, that is designed to give developers full access to PayPal’s features, providing them with more abilities in building applications, such as accepting and distributing payments.

The Adaptive Payments API appears to be very similar to Amazon’s Flexible Payments Service (FPS), supplying payments between a sender of a payment and one or more receivers of the payment. Thus, Adaptive Payments handles the same functionality as FPS, enabling, for example, developers become a payment aggregator, which is something against PayPal’s current Terms of Service. Adaptive Payments has also built in micropayments support, another feature of FPS.

Most of the new Adaptive Payments service offerings are to be attractive to developers. PayPal’s “Chained Payments” lets developers create applications that enable a sender to send a single payment to a primary receiver who may keep part of the payment and pay other, secondary receivers with the remainder of the funds.

Adaptive Payments also plans to offer “Parallel Payments,” which would allow a sender to send a single payment to multiple receivers. An example of this type of application might be a shopping cart that lets a buyer pay for items from several vendors with one payment. It works in the following way: the shopping cart would allocate the payment to the merchants who actually provided the items, and then PayPal would withdraw money from the sender’s account and deposit it in the receivers’ accounts.

PayPal hasn’t still unveiled Adaptive Payments pricing plan: if it would or wouldn’t compete with Amazon’s FPS pricing. Although FPS allows much more flexibility than PayPal’s Direct Payments API, now with its Adaptive Payments API PayPal is to become a strong competitor again.