Skype Looking to Hook Up with PayPal

At a technology conference in California, Skype co-founder Niklas Zennstrom said VoIP leader Skype and online payments giant PayPal are working together enable Skype users to send each other money via PayPal using the Skype service. Zennstrom declined to offer any details of when the service would be available to Skype users, but indications are that the capability will debut shortly, in part to support Skype Prime, a new community feature in Skype 3.1 which enables Skype users to charge for information services offered via Skype.

Connecting the Skype and PayPal communities might trigger siesmic shifts in the VoIP, instant messaging, and online payment spaces: Skye has more than 170 million users around the world, many of whom might find PayPal a convenient form of money transfer service, particularly across national borders. Enabling commerce transactions within Skype also opens up commercial opportunities via the VoIP technology: any service which can be offered over a telephone (technical support, online psychics, and more) can suddenly be offered worldwide via VoIP. However, for all the landscape changes the team-up might bring on, let’s not forget this isn’t the merger of two industry titans looking to define a new market: instead, it’s a hook-up between two subsidiaries of online auction giant eBay, looking to create a new market.

PayPal has also looked into expanding its online payment services to arenas other than traditional computers, last year rolling out a service which enables users to send money via cell phone text messages; however, the service has yet to be widely embraced, and PayPal hasn’t put much effort into advocating it as a payment solution for consumers or merchants.