By eliminating membership requirement, application users are more likely to complete a purchase. PayPal acknowledges that developers, merchants and startups have been clamoring for a simpler payment method for third-party applications.
"We're thrilled to provide this new functionality to meet this need and look forward to seeing the ground-breaking apps our developer community will create with this," Naveed Anwar, senior director of PayPal's Developer Network, said in the company's blog.
PayPal is not the only payment service targeting such applications. Rival MasterCard last month announced that it would release Open APIs for third-party and independent software developers globally later this year.
MasterCard's payment and data services had been proprietary, but the growth in the use of mobile devices, such as smartphones, has put the pressure on more open tools for embedding credit-card payment services. Other credit-card companies, such as Visa and Discover Card, are also targeting mobile devices.
PayPal says mobile transactions through its service increased six-fold in 2009, rising to $141 million from $25 million in 2008. ABI Research predicts people will spend $119 billion through mobile phones by 2015.
Handset makers are also working at making it easier for people to buy with their phones. Nokia, for example, introduced in August 2009 a payment platform that lets people send money to others, pay for products in retail stores and online, recharge prepaid SIM cards, and pay utility bills. The platform generates revenue by charging transaction fees.