PayPal offers secure way to shop non-PayPal sites

By Eric Auchard

SAN FRANCISCO (Reuters) - PayPal, the payments service arm of online auction leader eBay Inc, is set to release on Tuesday a convenient way for its customers to make payments on Web sites that don't accept PayPal directly.

The new software utility, called the PayPal Secure Card, recognizes when a user lands on an e-commerce checkout page and automatically helps the user fill out the payment form in a secure way that also offers stepped-up fraud protections.

It answers an innovation by Google Inc, which a year ago introduced Google Checkout, which stores financial details to make shopping more convenient, analysts said.

Through a partnership with credit card issuer MasterCard Inc, Secure Card generates a unique MasterCard number each time a PayPal user arrives on an e-commerce sales checkout page that does not otherwise accept its payments.

"From a merchant's perspective this looks like any other MasterCard transaction," said Chris George, director of financial products for PayPal. "And it's just another PayPal purchase to the customer."

Secure Card has been tested by 3 million PayPal customers in the past year. The plug-in will be available to U.S. customers on Tuesday, with international customers to follow.

When a PayPal customer wants to pay for something on a site that doesn't normally accept PayPal payments, users click a downloaded PayPal button on their browsers to generate a unique, single-instance Secure Card transaction number.

"Actual PayPal activity goes up," George said. "It makes sense, because it just makes shopping easier and safer."