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PayPal to Launch Virtual Debit Card

Cardline
November 2007

San Jose, Calif.-based PayPal Inc. soon will launch a MasterCard-branded, virtual debit card for online shopping, Dan Schatt, general manager of mobile at PayPal, told attendees Tuesday at the BAI Retail Delivery Conference & Expo in Las Vegas. Shoppers download the card from PayPal's Web site, and a one-time number is issued for the card, Schatt says. When the customer selects something to buy, PayPal automatically fills in the necessary information, including the card number, to complete the transaction, Schatt says. To finish a purchase, the card withdraws the purchase price amount from the customer's PayPal account or from another financial institution. PayPal, which is owned by eBay Inc., developed the card because PayPal's research found that consumers still are reluctant to use their bank-issued debit cards for shopping over the Internet. During a question-and-answer session that followed Schatt's presentation, he said the virtual debit card has been in beta tests for some time. People who use it are "early innovators" who are concerned about online security, Schatt said.