PayPal will give away $100,000 for the most innovative payments application to a third-party developer as part of its PayPal X Developer Challenge. The first Developer Challenge launched at the PayPal X Innovate event in November 2009 and attracted hundreds of submissions, including the winners, Rentalic, a person-to-person rental marketplace, and appbackr, the first wholesale digital marketplace for iPhone applications.

This year's winners will be announced at PayPal X Innovate 2010 conference on October 26-27 at Moscone West in San Francisco. (PayPal recently put out a call for developers interested in speaking at the conference.)

PayPal is also awarding $10,000 to developers who create apps or services that directly impact users' daily lives - categories include:

• Best application that leverages PayPal X's Mobile Payments Library (available on iPhone and Android);
• Best application built by university students;
• Best consumer application;
• Best application that promotes cross-border commerce;
• Best application that takes advantage of Yahoo!'s platform;
• Best application that takes advantage of eBay's platform.

Two new community-based awards include the People's Choice, whose winners will be selected by the PayPal X online community; top finalists will be invited to exhibit at PayPal X Innovate 2010. Developers who register for the Challenge by August 4 are eligible to win one of 10 iPads. Details are found on x.com.

Finalists and the grand prize winner will be determined by a panel of judges including Roelof Botha of Sequoia Capital, Dave McClure of 500 Hats and Dana Stalder of Matrix Partners.