PayPal this week moved to increase its presence among small and medium-sized businesses with a new suite of online payment services, its first non-hosted offering.

PayPal Website Payments Pro lets merchants offer three new payment options to their customers, with the ultimate goal of giving PayPal users more flexibility and control over the checkout process.

PayPal's announcement comes on a day when the e-commerce world is abuzz with reports that Google is planning to compete with PayPal. Quoting unnamed sources, The Wall Street Journal on Friday and The New York Times on Monday ran articles saying Google is developing an online payment service. Google has so far declined to comment on the rumours.

Website Payments Pro features three new functions:

  • Express Checkout lets buyers with a PayPal account complete transactions on a merchant's website with three clicks. It does this by allowing buyers to initiate and approve payment earlier in the checkout process and by having PayPal send shipping and billing information to the merchant.

  • Direct Payment API lets merchants process credit-card transactions on the PayPal system for buyers without a PayPal account.

  • With Virtual Terminal, merchants can receive credit-card information from buyers via phone, fax or mail and enter it into the PayPal system for processing.

    Website Payments Pro is not a hosted service. Checkout is completed on the merchant’s website, directing customers to the PayPal site "momentarily" to log in and confirm payment. Because buyers land back on the original website after paying, merchants have more control over the checkout process and can encourage buyers to continue shopping. Merchants can also emphasise their brand throughout the checkout process.