PayPal confirmed on Friday it is testing a new mobile payment solution with a handful of merchants. The service allows shoppers to use their email address and PayPal password to make secure purchases on mobile devices such as cell phones and Blackberry devices. Spokesperson Amanda Pires said PayPal has made an API available to some merchants as part of a beta test, and the company expects to launch the service sometime this year.

News of the PayPal tests were "leaked on the blogosphere," Pires said. Aner Ravon, co-founder and Executive Vice President of Marketing of Syncho.net (http://www.syncho.net), a user centric mobile media discovery service, broke the story on his blog, writing about what he called PayPal's "Mobile Checkout" early Friday morning (http://www.degardener.com/2007/03/23/paypal-claiming-its-mobile-share). His blog post included a screen shot showing how the new service will work.

The service is mobile checkout for mobile devices and browsers using existing PayPal accounts so that users don't have to register on their mobile devices, according to Pires. Mobile checkout works with secure mobile browsers and is optimized for merchants' mobile websites. "The whole point is you just enter your passwords. No one wants to enter all their financial information over a mobile device," Pires said.

The mobile checkout service is different from PayPal Mobile Text to Buy and Text to Give, text message-based services introduced last year in which users must first activate their devices (http://www.auctionbytes.com/cab/abn/y06/m04/i06/s03).

Asked if Starbucks, which accepts PayPal checkout on its website, was going to accept mobile checkout from PayPal, Pires said, "We hope merchants like Starbucks will offer PayPal for their mobile websites." Currently, a handful of merchants are testing it, and other merchants who are interested can contact PaPal, she said.