PayPal recently revealed that it was testing an in-store payments technology both via mobile and point of sale systems on a ‘friends and family’ basis at Home Depot. Initially, the pilot was only for 5 stores. Today, on eBay’s earnings call eBay President and CEO (and interim PayPal president) John Donahoe revealed that PayPal will be extending the pilot to 51 Home Depot stores in the San Francisco Bay Area.

Basically, via the pilot customers (for now, this only applies to PayPal employees) are able to pay for items via their PayPal account at Home Depot’s point of sale systems. They can either use a pin code via their mobile phone or a specialized PayPal credit card that can be swiped, the payment amount will be deducted from their PayPal account.

The bigger vision of brick and mortar partnerships are set to include location-based offers, making payments accessible from any device and offering more payments flexibility to customers after they’ve checked out. Users will also have the ability to access realtime store inventory, receive in-store offers, and real-time location-based advertising from stores. PayPal will also help retailers use location and transaction data to improve the experience for consumers.

As PayPal’s Anuj Nayar told us recently,  the Home Depot test program was individually established between PayPal and the big-box retailer, but in the future, PayPal is partnering with point-of-sale software companies to help expand the in-store program to other brick and mortar retailers.

The assumption is that the results of the smaller test at Home Depot, which only launched a few weeks ago, must have been positive, so Home Depot is expanding the pilot program. We’re told that PayPal will be partnering with at least 20 other known top-tier retailers for the in-store payments test, which will be unveiled later this year.

When asked about the impact of PayPal point of sale integrations will have this year, Donahoe says the last year was about the planning process, this year will be getting the in-store integrations rolled out and next year will be about sale. “The goal is to get a product that will be expanded to every vertical around the world so we can build a business around the point of sale product.”

Donahoe said he tried actually the in-store integration this morning at a Home Depot in San Jose (he says he left his wallet and mobile phone in the car), and just was able to enter his mobile number and pin and was able to pay. The receipt was emailed to him.

At his CES keynote yesterday evening, eBay CEO (and new interim PayPal CEO) John Donahoe revealed a number of new mobile payments forecasts for both eBay and PayPal. As we heard from PayPal VP David Marcus a few days ago, PayPal surpassed its expectation of $3.5 billion in mobile payments in 2011, reaching $4 billion for the year. Donahoe said in his keynote that eBay reached $5 billion in mobile GMV (gross merchandise volume) in 2011, doubling 2010′s GMV.

He also projected yesterday that eBay would reach $8 billion in mobile GMV in 2012, and PayPal will reach $7 billion in transactions in 2012. eBay Mobile currently has more than 65 million downloads of eBay’s mobile applications across platforms. And more than 890,000 new eBay shoppers made their first eBay purchase through the company’s mobile apps in 2011, a 113% increase year over year.

Donahoe also announced a new strategic partner in eBay’s RedLaser barcode scanning app—Best Buy. The app was updated last fall to include integration from PayPal and Milo to give users the ability to buy now for either in-store pick-up or home delivery later. Yesterday, Best Buy was revealed at as RedLaser’s newest partner (joining Toys R Us).

Exclusive: We’ve received more details on how PayPal will be scaling its in-store payments technology at major retailers. As we reported last week, PayPal is currently testing the mobile payments and point-of-sale integrations at Home Depot on a friends and family basis, in five stores. Today, we’ve learned that PayPal is partnering with AJB Software, a company that provides point-of-sale software to large brick and mortar retailers, to integrate the online payments giant’s technology into their offerings.

AJB basically provides a communications gateway that connects a retailer’s point-of-sale system with financial institutions. Over 140 large-scale retailers including Kohl’s and BestBuy use AJB’s software to manage payments. In a nutshell, the partnership allows an easy way for big box retailers to offer consumers a way to pay via PayPal in their stores.

AJB will build a native PayPal interface within its integrated payment solutions platform. The interface can then be made available to AJB’s retail customer base. AJB’s Retail Transaction Switch will provide the framework to allow the millions of PayPal account numbers to be processed as financial tender by existing and future customers of AJB. Similar to the Home Depot integration, PayPal members will have the option of paying for merchandise by swiping a PayPal Access Card or by entering the mobile telephone number and password associated with their accounts.

The integration with AJB’s offerings will roll out in the first quarter of this year, says the companies.

While it’s still unclear the exact nature of how PayPal’s in-store integrations will work, the bigger vision of brick and mortar partnerships are set to include location-based offers, making payments accessible from any device and offering more payments flexibility to customers after they’ve checked out.

Users will also have the ability to access realtime store inventory, receive in-store offers, and real-time location-based advertising from stores. PayPal will also help retailers use location and transaction data to improve the experience for consumers.

For PayPal, this is one way that the company can scale the reach of its in-store payment system without having to partner individually with each retailers. PayPal’s Anuj Nayar tells me that the Home Depot test program was individually established (not via AJB) but going forward, PayPal will be making a number of similar payments ecosystem deals in the coming months to expand the reach of the new payments option.

In terms of specific scale, AJB has the potential of extending PayPal to 250,000 point-of-sale terminals at large retailers nationwide. For PayPal, it makes sense to create partnerships like these to make it easier for retailers to simply plug the system into their existing AJB integrations. But PayPal will also need to educate larger retailers on why it is beneficial to implement the new payments system in their point-of-sale terminals.

PayPal has already started showcasing its technology for retailers and the press over the past few months, and considering PayPal’s 100 million-plus userbase, and growing revenue, the payments giant shouldn’t have too much of an uphill battle convincing retailers that the option makes sense for consumers.

As we’ve reported in the past, PayPal announced an in-store payments technology both via mobile and point of sale systems that is currently being tested on a ‘friends and family’ basis in a national retailer. That retailer is Home Depot, we’ve learned from PayPal.

PayPal said of the Home Depot announcement: We frequently run trials with our retail partners. In this case, PayPal and The Home Depot are engaged in a limited pilot program for new POS technologies. The pilot is currently being run in five stores and involves a small number of PayPal employees.

Gil Luria of Investment house Wedbush Securities also put out a research note today that confirmed that the first retailer is the Home Depot.

Basically, via the pilot customers (PayPal employees) are able to pay for items via their PayPal account at Home Depot’s point of sale systems. They can either use a pin code or a specialized PayPal ctedit card that can be swiped, the the payment amount will be deducted from their PayPal account.

The bigger vision of the in-store integrations are set to include location-based offers, making payments accessible from any device and offering more payments flexibility to customers after they’ve checked out. Users will have the ability to access realtime store inventory, receive in-store offers, and real-time location-based advertising from stores. While exact details are still unclear, it sounds like PayPal will use location and transaction data to help in-store retailers improve the experience for consumers.

We heard recently that PayPal is partnering with at least 20 other known top-tier retailers, which will be unveiled later this year.

When we last left Paypal, the company was busy destroying Christmas for a bunch of kids. This week they’re shredding violins into bits while taking money from unsuspecting sellers. When will we stop trusting these guys? When they kill a puppy?

Regretsy reader Erica sold an ostensibly rare violin to an eBay buyer who paid using Paypal. The buyer disputed the authenticity of the instrument and asked for his money back. Rather than handle it amicably with Erica, the buyer went to Paypal who advised them to supply proof that the item had been destroyed and they would refund the money. The buyer then shredded the violin into chowder and sent a handsome photo to Paypal and Erica. Paypal refunded the money.

This left Erica in a tight spot. She no longer had the money and the item she was attempting to sell was shredded. Actually, that’s the end of the story: violin shredded, money taken away. It is, in a word, heartbreaking.

Now a lot of this story isn’t out yet and I have a line in to Paypal about this, so before we get out the pitchforks lets discuss what happened. Paypal has a well-documented policy that it does not allow the sale of fakes through its service. This applies, presumably, to Mucci purses and Drada wallets and fake Bolex watches. However, no one in this situation was in any position to objectively appraise this piece and Paypal could not confirm or deny the accuracy of the buyer’s claims. To reduce this argument ad absurdum, what if this was a painting or sculpture attributed to Raphael and was really made by Michelangelo? In any case it’s real and Paypal’s CSRs have no business passing judgement on these things, let alone take the buyer at his word. Paypal, in their zeal to perform customer server theatre, is judge, jury, and proxy executioner here.

Erica might be a total faker. The buyer may be in the right. But it’s not Paypal’s job to appraise violins. My understanding is that Paypal is a proxy between two parties and a better solution would be to hold the money in escrow – less shipping – so the violin can come back to the owner and the cash then goes to the buyer.

As online retail sales continue to soar, brick and mortar stores are seeing margins dissipate. Online holiday sales are expected to grow 15 percent to $37.6 billion this season while retail sales in physical stores are only expected to increase by 3.8 percent to $469.1 billion. Best Buy recently reported a 29 percent drop in profits because of discounts and sales of top grossing electronics. The fact is that the electronics retailer was probably forced into offering deeply discounted deals in order to compete with e-commerce giant Amazon. And it doesn’t help that Amazon is now offering discounts to consumers on any product purchased via its price comparison mobile app, another huge blow to physical retailers.

Brick and mortar retailers need to figure out a way to compete with Amazon and other e-commerce giants that doesn’t eat into margins. Deals and coupons simply aren’t enought. And as former Apple retail chief Ron Johnson has said, retail isn’t broken, stores are. So how are retail stores going to survive? While mobile may be the technology e-commerce companies are using to jab physical stores, it is also the technology that may save these stores. Personalization and data are the two key factors that could save retail stores; and the vehicle by which these technologies can be utilized is via the mobile phone.

Why Mobile?

2011 has been pegged as the year of mobile shopping by both technology companies and retailers. Now more than ever consumers are carrying around phones that enable them to access apps, discounts, price comparison information, payments mechanisms and more. comScore recently reported that two-thirds of all smartphone owners performed some sort of shopping activity on their phones, including comparing products and prices, searching for coupons, taking product pictures or locating a retail store.

In fact, slightly more than one in three purchasers used their smartphone to make a purchase while in a store. When they enter retail stores, these consumers are carrying their mobile phones and using these devices.

E-commerce companies have been quick to capitalize on this trend while brick and mortar retailers have not caught on in quite the same way. As mentioned above, Amazon is incentivizing customers to use its PriceCheck mobile app. Customers can walk into a brick-and-mortar retailer, use the app to scan the barcodes of a desired product, and access Amazon’s prices for that product. More often than not, Amazon’s prices are lower, and if a customer places the item into the app’s virtual basket, a 5% discount will be applied to the product within 24 hours. Price Check app users can use the discount on up to three products.

Simply offering coupons aren’t going to be able to combat Amazon’s tactics, because not only are these deals going to eat into retailer margins but these incentives can’t necessarily bring shopper back to a store repeatedly.

Brick and mortar stores need to figure out not only how to drive traffic, but also how to increase the purchase amount and conversion rates, create loyalty and return customers and more.

Cyriac Roeding, founder of location-based mobile shopping app Shopkick believes that the mobile phone is key to the future of commerce for stores. In case you aren’t familiar, Shopkick automatically recognizes when someone with the free Android or iPhone app on their phone walks into a participating store. Once a Shopkick Signal is detected, the app delivers reward points called “kickbucks” to the user for walking into a retail store, trying on clothes, scanning a barcode and other actions. These rewards can be used towards purchases.

Rodeing says that the role of the physical store will change in the future. What online stores cannot offer (which brick and mortar outlets need to realize) is the one-on-one personalization and personal treatment that a physical store with employees can. And in-store shopping brings immediate gratification because a customer can take home the item with them as soon as the purchase is complete.

And mobile is how you bring personalization back to the in-store purchase experience. The challenge, he explains, is to make this experience worth the consumer’s time and money.

eBay is also trying to help physical retailers drive traffic into stores via its Red Laser barcode scanning apps, which now integrate in-store listings, prices and availability from Milo. As eBay’s Jack Abraham (who founded Milo) says, brick and mortar retailers need to be where their customers are, and that decision-making is now happening on phones.

“There are clearly companies that are positioning themselves as destroying brick and mortar retailers but we’re positioning ourselves to be an ally for the retailers,” he says. eBay recently launched a new campaign, where consumers who spend $100 at Toys “R” Us, Dick’s Sporting Goods and Aeropostale using PayPal, will get a $10 voucher to spend in store.

How To Personalize The Experience: Data!

How brick and mortar stores are going to be able to personalize and make the in-store shopping experience unique is through data, in my opinion. It’s no longer about creating a mobile web site or offering coupons; the experience centralizes around making customers feel as if they are being treated like a VIP just by walking into a store. And how brick and mortar stores are going to do that is the same way Amazon was able to create a business out of personalized e-commerce.

Some retailers are attempting to use video and heatmaps to try to see how people shop, what they are buying and more. But this data is limiting because while stores can figure out what is working when it comes to placement, advertising, and marketing of products in-store, retailers still don’t know who is buying and how to get them to return.

Personalization really gets interesting with transaction data. Shopkick recently teamed up with Visa to allow consumers a way to receive rewards points for retailers at the point of sale when they use their Visa credit cards. This is part of closing the redemption loop. The redemption loop starts when a consumer sees an ad or an offer for a merchant, and is completed when the consumer makes a purchase and that purchase can be tracked back to the offer. Thus far startups, tech companies and credit card companies have started to use transaction data as a way to close the redemption loop and drive future purchases but this is relatively new to brick and mortar retailers.

With the Shopkick deal, brick and mortar retailers could see what items a consumer purchased and deliver discounts, and special offers based on purchase behavior. And this can be delivered via the mobile phone.

Of course, this would all have to be an opt-in experience for shoppers considering the privacy implications. But many consumers use the personalized experience of Amazon when buying books, electronics and others items, so why not replicate this in the physical world?

This means more partnerships with credit card companies like Visa, MasterCard and American Express. Online payments giant PayPal also sees this as a huge opportunity for physical stores. PayPal announced an in-store payments technology both via mobile and point of sale systems that is currently being tested on a ‘friends and family’ basis in a national retailer in two markets.

The opt-in offering will include location-based offers, making payments accessible from any device and offering more payments flexibility to customers after they’ve checked out. Users will have the ability to access realtime store inventory, receive in-store offers, and real-time location-based advertising from stores. While exact details are still unclear, it sounds like PayPal will use location and transaction data to help in-store retailers improve the experience for consumers.

PayPal is partnering with a at least 20 known top-tier retailers, which will be unveiled in 2012. We hear about the initial retailer as soon as this year.

PayPal’s Anuj Nayar tells me candidly that retailers are desperate for this offering. “The fact is that most retailers have no idea about customers until they are leaving the store and that comes down to data.” He says PayPal is working with in-store retailers to create a suite of tools and technologies that help use technologies to level the playing field when it comes to data.

One thing that is clear is that retailers need to jump on the mobile, personalization and data bandwagon very soon. Online retailers are only getting more aggressive (i.e. Amazon), and it’s only a matter of time before online retailers start to ramp up their existing personalization offers even more.

Roeding says that physical retailers who doesn’t focus on mobile in the next six months are going to face a major problem in the next year. But it goes beyond just created a dedicated site and mobile app. Brick and mortar retailers need to find a way to be in as many mobile applications as possible, such as ShopKick, PayPal, and eBay, where potential customers are deciding what to buy and where.

Abraham echoes these thoughts, explaining that retailers need to be part of search results, especially in mobile search results. “If they don’t, they risk getting lost in the age of the post-pc era,” he says. eBay is building out its own predictive data capabilities with the recent acquisition of Hunch, and we can expect more data-focused features to be rolled out soon.

As for which brick and mortar retailer is going to be the first catch on the mobile and data wave when it comes to in-store shopping, my bets are on Wal-mart. The retailer has been particularly aggressive on the technology front, buying social and mobile ad targeting company OneRiot, and social media startup Kosmix. Wal-mart is already experimenting with a number of in-store mobile services, including things like NFC, barcode scanning and in-store geo-fencing.

There’s no doubt that 2012 could be a pivotal year for brick and mortar stores. But they need to act fast and start providing a unique experience for customers or risk being left in the dust by Amazon.

In case you are heading to the movie theatre this holiday season, you might want to pay for your ticket via Fandango. Using the Fandango mobile app, you can now purchase movie tickets using your PayPal account and, in some cases, get your movie ticket straight to your mobile phone, avoiding lines at the ticket counter.

While Fandango has offered PayPal as a payments option on the web, this is the first time the company is using the payments platform in its iPhone and Android apps. The company, which began rolling out mobile tickets in 2010, says that more than 20 percent of Fandango’s ticket sales come from mobile devices, seeing a 73 percent year over year increase in mobile ticket sales in 2011.

Fandango says that it is seeing an 11% year-over-year increase in average monthly Web traffic, reaching as high as 25 million unique visitors per month. Mobile now represents more than 28% of all visits to Fandango.

With the new integration, film goers can can select PayPal as a payment option after choosing
the show time and entering the quantity of tickets. Customers can then login to PayPal and complete the transaction.

We’ve been hearing that PayPal is going to be rolling out an in-store payments experience at a national retailer in the U.S. soon. It looks like the payments giant is testing another in-store payments experience in Sweden, using NFC technology, and partnering with two Swedish developers Accumulate and Point. You can find more information about the partnership here (in Swedish).

Waroncash originally reported the test, but we’ve spoken to PayPal to get more details on the integration.

As PayPal’s Anuj Nayar tells me, PayPal is experimenting with in-store ‘proximity’-based NFC payments in the test with two Swedish retailers, an electronic store and a sports equipment store. Users can download a PayPal in-store iOS or Android app (only available in Sweden). This app will give them access to special discounts at the retailers. When users visit the store, they will receive an NFC sticker, which will allow them to pay via NFC (with the payments deducted from their PayPal accounts) at the retailer point of sale systems.

PayPal worked with mobile payments developer Accumulate on the technology as well as with startup Point, which was acquired by VeriFone earlier this year for over $1 billion, on the point of sale integrations. It’s actually a short-test as well and will only last for five days.

Nayar says the developers involved actually reached out to PayPal to see if the integration would make sense. He adds that over the next few months PayPal will be ‘many’ different proximity-based payments technologies (including NFC) and exploring numerous partnership opportunities.

“PayPal isn’t betting the farm on NFC,” he explains. But he says that the payments giant is interested in using the technology as one option for in-store payments. As we’ve reported in the past, PayPal is dabbling in NFC but still believes mass adoption is years away.

It’s the holiday season, when a webmaster’s mind turns to thoughts of love and charity. Take Regretsy, for example. The site collected a bit of money and began buying and sending gifts to the kids in the Regretsy community whose parents were having financial problems. In this economy, that could be just about anybody and, the Internet being the Internet, there was an outpouring of affection and donations. It warms, as they say, the cockles of the heart.

Unfortunately, Regretsy used Paypal.

As of yesterday, Paypal shut down the account and put a hold on Regretsy founder April Winchell’s account. They also forced her to refund the money she collected, less the fees Paypal took out – twice.

I’ll let you read the post yourself. It’s a gem of horrible customer support. But this part is classic:

PAYPAL: Only a nonprofit can use the Donate button.
ME: That’s false. It says right in the PDF of instructions for the Donate button that it can be used for “worthy causes.”
PAYPAL: I haven’t seen that PDF. And what you’re doing is not a worthy cause, it’s charity.
ME: What’s the difference?
PAYPAL: You can use the donate button to raise money for a sick cat, but not poor people.

A sick cat, eh?

Now April is a repeat offender. She’s raised money for needy people before and I suspect she’ll do it again. Clearly this sort of largesse is far too suspect to be ignored, especially in the cesspool of iniquity and scam-artists that is the dark binary star of Ebay and Paypal.

What’s Paypal’s problem? April used the “Donate” button instead of the “Buy Now” button on Paypal, a mistake that many make when, you know, soliciting donations. Donations, it seems, require pages of documentation citing non-profit status, something not mentioned directly on Paypal’s website. Instead, anyone can make a donate button – heck, I just did it – and then suffer the consequences when the Paypal militia figures it out. Why not lock the “Donate” button down and make the homeless shelter hire a lawyer in order to file for the ability to accept donations? That seems like it would be effective, non?

Paypal is historically histrionic when it comes to fraud. Either you’re getting screwed on a massive scale or your entire account is shut down on spurious charges. I understand that Paypal has to face scammers and fraudsters every day, but seriously? You hear more about folks like Merlin Mann and now Regretsy getting dinged than the scammers who tried to rent us a place in the Catskills that didn’t belong to them last winter. We trusted them, after all, because they took Paypal.

Paypal no longer seems like the service of choice for things like this and I’d recommend companies start looking into alternate ways to collect money including Amazon (Kickstarter uses this quite effectively) and Google Check-Out or, barring that, hosting their own merchant accounts. An envelope full of money passed by hand through a throng of drunken revelers seems like it would get to its intended recipient faster and more effectively than Paypal.

UPDATE – A Paypal spokesperson wrote:

PayPal Statement:

We can’t comment specifically on the Regretsy.com account due to our privacy policy. However, we can confirm that the funds have been released and we are working directly with the account holder on this matter. We are also making a donation to Regretsy to help families in need this holiday season. We’re very sorry this occurred.

For reference, we have clear guidelines for any business who uses PayPal to accept donations. For example, we require certain documentation to prevent misuse of the donated funds and, if the recipient claims charitable status, to determine whether they are properly registered. As a regulated payment service, we’re also required by law to follow these guidelines.

We appreciate that this can be an inconvenience, but we have a responsibility to all our customers – both donors and recipients; or buyers and sellers. In this instance, we recognized our error and moved as swiftly as possible to fix it.

PayPal restored sexy social network Zivity’s account tonight after a weeklong battle over whether the website violates its policy. Zivity bills itself as “Hotness. In Person” where “76,102 people just like you rub elbows with models, photographers, and video artists.” But early Thanksgiving morning, PayPal decided it didn’t want to rub elbows with Zivity anymore after four years of doing business together.

According to Zivity CEO and Editor-in-Chief Cyan Banister, Zivity asked PayPal if the content of the website would be an issue before they signed up with the payment processor. After a review by PayPal, Banister says she was told there were “no issues”. PayPal became the engine behind a majority of Zivity’s subscription payments.

Then over the holiday, Zivity got an email from PayPal saying “after a recent review of your account activity, it has been determined that you are in violation of PayPal’s Acceptable Use Policy” and the account has been “permanently limited.” That meant PayPal could hold the funds in the account up to 180 days. Zivity was ordered to remove all references to PayPal from their website.

According to PayPal’s Acceptable Use Policy cited in the email, PayPal may not be used to send or receive payments for certain sexually oriented materials or services or for items that could be considered obscene. So, what was acceptable for four years suddenly became a violation. What those “certain” materials are or what could be considered obscene is unclear.

Since Zivity’s photos are non-exclusive, some of the same images on Zivity appear on flickr and OneModelPlace, both of which use PayPal to process payments.

Banister says she called and emailed PayPal for a week to appeal the decision. She even had a potential inside connection. Zivity’s Co-founder and Chairman, and Cyan’s husband, is Scott Banister. He is named as a co-inventor on the original PayPal patent for its email payment system as well as being an early PayPal board member and investor. But Cyan and Scott’s connections had long left PayPal, and they got nowhere.

After getting the original email, she removed PayPal from her site.

Earlier today, a story about Zivity’s blocked account ran on the local NBC Bay Area TV station. PayPal told NBC:

“We cannot comment on specifics of Zivity.com’s account due to our privacy policy. However, we can confirm that PayPal does not allow our services to be used for the sale of adult-oriented digital materials. This is clearly stated in PayPal’s Acceptable Use Policy.”

Soon after the NBC segment appeared (coincidence or not?), Zivity got an email saying their account had been restored. PayPal did a further review and determined “the account is currently not in violation of our Acceptable Use Policy.” No explanation was given for what, if anything, had changed. PayPal apologized for any inconvenience and pointed to the same vague Acceptable Use Policy for any further questions.

So for now, Zivity can come back to PayPal. I asked Cyan if she was considering a switch to a new payment provider. She says she will look at alternatives, but “my members love, use, and want PayPal” and she doesn’t want to take the service away from them.

TechCrunch contacted PayPal for comment tonight, but has not received a reply.

Disclosure: Cyan Banister is a contributing writer to TechCrunch and hosts the show Speaking Of.. on TechCrunch TV.

Black Friday and Thanksgiving Day brought record mobile engagement for PayPal, with 511 percent and a 538 percent increase in global mobile payment volume when compared to Thanksgiving and Black Friday 2010, respectively.

It looks like Cyber Monday is also bringing record sales for the payments giant. The company is reporting that as of 11 a.m. PST, PayPal is already seeing a six-fold increase (514 percent) more mobile payment volume on Cyber Monday 2011 compared to the same time period on Cyber Monday 2010.

Some of that mobile payment volume could come from sales from eBay. The e-commerce giant just revealed that this morning people picked up four iPad 2 tablets per minute, at a discounted price.

Already, we’re seeing reports that Cyber Monday online sales are up 18 percent for this same time period over Cyber Monday 2010. The number of consumers using a mobile device to visit a retailer’s site is 11.7 percent and the number of consumers using their mobile device to make a purchase is 6.4 percent.

General mobile sales and traffic to retailers are also up, and in terms of devices, the iPhone continues to lead all mobile device traffic at 4.66 percent, followed by Android at 3.7 percent and iPad at 3.12 percent.

As we heard earlier today, Thanksgiving proved to be a lucrative day for online retailers. IBM reported online Thanksgiving 2011 sales were up 39 percent over Thanksgiving 2010, with mobile shopping on the rise. eBay and PayPal are seeing similar trends. PayPal Mobile just announced a 511 percent increase in global mobile payment volume when compared to Thanksgiving 2010.

On Thanksgiving in the U.S., consumers shopped on mobile via PayPal most frequently between 6:00 p.m. and 7:00 p.m. PST. Around the world, consumers shopped on mobile most frequently between 1:00 p.m. and 2:00 p.m. PST.

There was a more than three-fold (350 percent) increase in the number of global customers shopping through PayPal mobile on Thanksgiving 2011 compared to last year. These shoppers were mainly located in New York, Houston, Los Angeles, Miami and Chicago.

eBay says that the amount shoppers in the U.S. that bought and spent via eBay Mobile more than doubled this Thanksgiving over last year. GSI Commerce saw a more than three-fold (345 percent) increase in U.S. mobile sales this Thanksgiving compared to 2010. And Searches through the local product listings platform Milo increased 557 percent percent over Thanksgiving Day 2010.

For eBay, the busiest eBay Mobile shopping hour on Thanksgiving was between 6 and 7 p.m. PST. The five most popular categories shopped via eBay Mobile, excluding vehicles (by number of sold items) were Clothing, Shoes & Accessories; Cell Phones & PDAs; Jewelry & Watches; Collectibles and Toys & Hobbies.

In electronics, the top purchases items yesterday were iPhone Accessories, the black Apple iPhone 4 (16GB), and the Apple iPod Touch 4th Generation (8GB).

The dramatic rise in payment volume via mobile phones isn’t particularly surprising considering all the hype around mobile shopping this holiday season. But a 500 percent increase in payment volume for PayPal is still impressive for mobile shopping and we haven’t even seen the full numbers for Black Friday or Cyber Monday yet.

So far, things look positive for Black Friday, eBay says that as of 11 a.m. PST, PayPal is already seeing a more than six-fold increase (538 percent) in global mobile payment volume on Black Friday 2011 compared to the same time period on Black Friday 2010.

According to IBM, the number of consumers using a mobile device on Black Friday to visit a retailer’s site is holding firm at 17.37 percent and the number of consumers using their mobile device to make a purchase remains is at 9.73 percent. The iPhone currently leads all mobile device traffic at 6.77 percent, followed by Android at 5.37 percent and iPad at 4.6 percent.

Already IBM says that afternoon results show that Black Friday 2011 online sales are 20 percent higher for the same time period over Black Friday 2010. Black Friday 2011 online sales eclipsed Thanksgiving sales at 2:20pm PST this afternoon, says IBM.

Amanda Pires of PayPal tell us that the holiday is proving to be the largest mobile holiday shopping season PayPal and eBay has ever seen. “The retailers that are taking advantage of mobile shopping are going to win. We expect mobile shopping to continue to be strong throughout the holiday season.”

PayPal relaunched a peer-to-peer payment Facebook app today that some news outlets are misinterpreting as a partnership between the two companies. I’ve confirmed with Facebook that it’s not. It’s just a standard application on the platform, and Facebook couldn’t really do anything to stop PayPal. But why hasn’t Facebook built its own way for friends to send money to each other using its virtual currency Credits? Because of significant fraud risks and its focus on making Credits work better for virtual goods purchases where it earns 30%.

The first incarnation of Send Money was launched in December 2009. It lets you pay friends through a credit card or your PayPal account. What’s new is that you can now also opt to include a digital greeting card, good for sending money on birthdays and other holidays. The only Facebook data the app needs is your friend list, and even then you still have to hunt down a payment recipient’s email address before you can transfer funds. Send Money doesn’t integrate with Facebook’s own payment system, it doesn’t require any secret data or APIs, and I’ve heard it wasn’t even built inside PayPal.

Facebook has its own payment system that lets users receive its virtual currency Credits in exchange for money paid through credit cards, PayPal, and other means. Users spend the Credits in social games for power-ups or extended game time, and the developers redeem these Credits for 70% of their worth while Facebook keeps its 30% tax.

The primary reason Credits can only be spent in games and apps, not sent to other users, is fraud. There are several ways for users to earn Credits instead of paying for them, such as completing on-site offers, or making off-site purchases that are incentivized with Credits rewards through companies like ifeelgoods. If users could transfer Credits to someone else, the occupation of “Credits Miner” would emerge. These people would earn Credits any way they could and sell them to others for more than they cost to earn but less than Facebook sells them for. This would essentially create a secondary market for Credits and undermine Facebook’s ability to make money on them.

P2P Credits transfers would also make users a more lucrative target for hackers. Someone could steal your account info and dump your existing balance of Credits into their own account, or even buy more Credits in your name and send them to themselves. When Facebook originally developed Credits, it correctly determined that it could significantly reduce its risk of fraud by disallowing P2P transfers.

The other main reason there’s no Credits P2P payments is because it not Facebook’s focus, due to a mix of developer ecosystem politics, long-term monetization, and Facebook’s lean startup style. Facebook and PayPal are close. They’re strategic partners, with PayPal helping the social network process Credits purchases, and PayPal’s founder Peter Thiel is an early investor and advisor to Facebook. Moving into P2P payments could upset this partnership, and lead PayPal to remove itself as a Credits purchasing method.

To be competitive, Facebook would only be able to take a few percent on transactions, and still it wouldn’t have the base of merchants PayPal cultivated through eBay. Instead, Facebook is focusing on Credits as its platform’s mandatory virtual goods payment processor for developers, where it earns its juicy 30% cut. That business is growing thanks to gaming giants like Zynga, so there’s no need to move into a risky sector such as P2P payments that’s outside its core competencies and dominated by incumbents.

Facebook is still a relatively small company. It needs its Credits team optimizing payment flows and fostering partnerships to milk the virtual goods market. It also needs to make Credits as a better payments processor for apps, through which more content companies are selling digital media like film rentals.

Right now, Facebook simply doesn’t have the resources to divert attention to P2P payments, and there’s no indication that such a need isn’t already being met off-site by PayPal, even if the Send Money app didn’t exist. One day that could change, especially if social ecommerce takes off and it allows Credits to be used to purchase physical goods from approved merchants. For now, Facebook is making the same smart choice about P2P payments as it made about virtual gifts, social games, music, and brand management — leave it to third-parties and concentrate on improving its core infrastructure.

Online holiday shopping reached record levels in 2010. And e-commerce spending is up this year. All signs point to consumers spending even more online this holiday season. I sat down with executives from Google, eBay, PayPal and ShopKick to discuss the trends that are expected to emerge in the e-commerce space over the next few months.  They center around mobile, tablets, and deals.

PayPal has more than doubled its mobile payments volume since the 2010 holiday shopping season, and we haven’t even hit the thick of this year’s rush. eBay is projecting $5 billion in mobile payments volume in 2010 and this number could increase in the next few months. And Google projects that 15 percent of total search on Black Friday (the day after Thanksgiving and one of the biggest shopping days of the year) will come from mobile devices. Tablet devices are now a part of the online shopping experience and retailers are taking note. Clearly, all signs point to the fact that this could be the breakout year for mobile shopping.

Mobile, Mobile, Mobile

All of the companies I spoke to unanimously agreed that this would be the year of mobile for the holiday shopping season. Steve Yankovich, head of eBay’s mobile business operations and development, says he expects this to be the biggest year for mobile sales for eBay yet. eBay has said that the company expects to see $5 billion in gross merchandise volume in 2011, and this will be partly buoyed by a strong mobile presence in November and December.

PayPal’s Senior Director for Mobile, Laura Chambers, echoes Yankovich’s forecasts and says that merchants are even preparing for the onslaught of traffic to their mobile sites. A number of big retailers, such as Armani Exchange, Guess and The Limited have recently put PayPal’s mobile express checkout as an option for payments on their mobile sites as a way to help the conversion process. “We are seeing strong investments by online retailers for mobile shopping this year,” she says.

Chambers says that last year, the peak day for mobile payments for PayPal was December 12, with $4.7 million in mobile payments volume. Now PayPal is seeing $10 million in mobile payments per day, and we haven’t even officially hit the holiday shopping period. Clearly, the mobile payments numbers could even triple from last year to this year.

While many consumers may shop on mobile for their holiday purchases, the usage of product search, barcode scanning, and other informative apps will also play a big part in this year’s mobile shopping. eBay’s RedLaser barcode scanning apps have seen scans go up 50 percent over the past year. If you aren’t familiar with how it works, RedLaser will scan the barcode of a physical product and show you where you can buy it on eBay’s properties and where it is available in local store locations around you (via Milo) and for how much. The app has been updated with PayPal functionality so that users can actually buy the product directly from the app.

Another shopping app developer who has high hopes for mobile this holiday season is ShopKick. Co-founder Cyriac Roeding says that this year will be the year of mobile for physical shopping. For background, Shopkick automatically recognizes when someone with the free Android or iPhone app on their phone walks into a store. Once a Shopkick Signal is detected, the app delivers reward points called “kickbucks” to the user for walking into a retail store, trying on clothes, scanning a barcode and other actions. Kickbucks can then be redeemed across all partner stores for gift card rewards or for Facebook Credits. User can also receive special discounts on specific products at partners stores like Macy’s, Best Buy or Target.

Roeding explains that the cell phone is the only interactive platform you carry with you in a physical store, and retailers are looking to use the platform to help drive transactions. Clearly, a mobile rewards app that offers in-store discounts can help do this. “The internet has caused brick and mortar retailers more trouble than benefit over the past fifteen years. Now retailers are catching on to how the internet can help retailers—that’s where mobile comes in.”

Sameer Samat, VP of Product Management for Google Commerce, tells me that the search giant is seeing a growing number of users are making buying decisions using their mobile phone. “We are definitely seeing m-commerce conversions growing and becoming bigger over time,” he says. “But users are also using their mobile phone to search for products and find local availability.”

Samat says that Google has seen a 200 percent growth in mobile product search usage and Google Shopper app downloads over the past year. Shopper, which is available for iOS and Android, allows you to find product prices, reviews, specs, local inventory of products at nearby stores, and more.

As we mentioned above, Google is forecasting that 15 percent of total search on Black Friday. will come from mobile. “There’s no doubt that users are now making buying decisions using their mobile phone,” says Samat. “And we are seeing m-commerce conversions growing and becoming bigger over time.”

Tablets

As tablets have grown to be the go-to browsing device, the iPad, and other devices are also becoming a way to shop. And retailers are catching on to this trend. According to a National Retail Federation study, 20 percent of retailers have invested in tablet device apps this holiday season.

With this in mind, Google debuted Catalogs in August, an app for tablet devices that includes 200 catalogs from major brands including Anthropologie, Bare Escentuals, Bergdorf Goodman, Crate and Barrel, L.L. Bean, Lands’ End, Macy’s, Neiman Marcus, Nordstrom, Pottery Barn, Saks Fifth Avenue, Sephora, Sundance, Tea Collection, Urban Outfitters and Williams-Sonoma.

The app is more than just a browsing experience. When consumers find an item they’d like to purchase, they can tap to find it in a store nearby or tap “Buy on Website” to visit the merchant online.

Google’s Samat says that “the tablet is the ultimate leanback experience and we see that playing a big role in holiday shopping as a replacement for the mail order catalogs you used to browse through.”

PayPal calls it ‘couch commerce’ and believes that tablet commerce will have a record year. PayPal recently reported that consumers who own both a tablet and a smartphone are significantly more likely (63%) to indicate increased overall spending on mobile purchases, versus owners of smartphones only (29%). Owners of both a tablet and a smartphone buy nearly twice as often as those who only have smartphones and more than 40% of dual owners made more than 20 mobile purchases over the past year, compared to only 12% of smartphone-only owners.

Forrester just released a report predicting a 15 percent increase in online shopping sales this year to nearly $60 billion, partly due to the increase in consumer-use of tablet computers for shopping.

Beyond Black Friday And Cyber Monday

Black Friday and Cyber Monday are historically the top-high-grossing online shopping days during the holiday season. But execs expect to see high volumes of online shopping on other days thanks to an increase in mobile shopping and deals.

Yankovitch tells me that eBay expects revenue numbers to be well over numbers that eBay saw last year for Black Friday and Cyber Monday, but expects to see more activity at times when people aren’t traditionally shopping.

The day of Thanksgiving is one of those days, says Chambers. Because people will have their phone everywhere (including at the table), consumers are expected to make purchases on the fly, especially on Thanksgiving evening. In fact, PayPal is predicting that after dinner on Thanksgiving Day will be the first mobile shopping spike this holiday season.

Another popular day has been the second Sunday in December, which is one of the last days where people feel confident that items will be shipped in times for the holiday. And Chambers says across the board, Sunday is the biggest day for mobile shopping generally.

Deals

There’s no doubt that deals, coupons and discounts will be a large part of the online holiday shopping experience, especially with the current state of the economy. According to the recent Forrester report, 58 percent of Americans say they are more price-conscious today than they were a year ago and nearly half believe they find better values online.

“I really expect consumers to be deal hunting this season,” explains Chambers. She says that PayPal, which has historically offered special deals for the holiday shopping season, will be bulking up on more consumer deals this holiday season.

Samat says that Google has always seen a spike for queries like deals, coupons, and sales during the holiday time and fully expects to see an increase this year. “The consumer desire for a better deal will help give certain product decision tools a big bump,” he explains. “People may take more time this year to find the best possible price.”

Deals could also include lucrative holiday shipping offers. In 2010, 45 of the top 50 online retailers offered some sort of promotional deal between Thanksgiving and Cyber Monday, most of which were a type of shipping promotion. And in 2011, Shop.org anticipates that a record 92.5% of online retailers will offer free shipping and not just as a Cyber Monday promotion.

Clearly, there’s plenty of optimism from retailers, and tech companies regarding online spending and shopping this holiday season. And this holiday season is somewhat unique considering the big bet that retailers are making on newer technologies, such as mobile, geo-location, tablets, local product search and more. The big question is how consumers will react to and engage with these technologies over the next several weeks.  It could be a very mobile Christmas.

PayPal updated its Android application today and has added one notable new feature: support for NFC payments. Using NFC, or near field communication, two PayPal users with NFC-enabled phones can send and receive money using the mobile app.

The feature, which was previously announced over the summer, also includes a “Request Money” widget that can be added directly to the Android homescreen. To use the widget, you simply tap it, enter an amount and then bump phones with your friend. On your friend’s device, they’ll see the request and can then enter their PayPal password to send you the money.

PayPal notes that its implementation of NFC involves “P2P” mode which means that it will work with the majority of NFC-enabled phones, not just the Samsung Nexus S.

The updated Android app also includes a few non-NFC features, including a newly redesigned landing screen, auto-complete from your phone’s address book and other UI improvements. The new app is available here in the Android Market.

We know PayPal has been investing in a comprehensive solution for in-store merchants to integrate the payments service into the point of sale payments experience. Today, on eBay’s earnings call, eBay CEO John Donahoe said that the launch of the new technology will take place in the fourth quarter. He said that the in-store PayPal technology will be tested on a ‘friends and family’ basis in a national retailer in two markets.

The exact details on how this will work is still unclear, but we do know that features of this new offering will include location-based offers, making payments accessible from any device and offering more payments flexibility to customers after they’ve checked out. Users will have the ability to access realtime store inventory, receive in-store offers, and real-time location-based advertising from stores.

It should be interesting to see which national retailer will be testing the technology and how the holiday shopping season will help PayPal’s transaction volume. As for when the retailer will be announced, our best guess is early November, as per what we’ve heard.

Later in the call, Donahoe said that eBay has had a number of offline retailer approach PayPal to bring the technology to the offline experience. PayPal is picking a small number of globally, known top-tier retailers, he says. In the first half of next year, PayPal plans to roll out the technology other national retailers. It doesn’t need NFC, it can work with a card, it can work with a mobile device, he says, making it relatively easy to integrate into retailer point of sale systems.

In terms of monetization, Donahoe says that they are exploring that in the next 3-6 months. The specific retailer who will launch the integration will reveal the PayPal partnership, in the fourth quarter. Donohoe called the integration “the next chapter of the PayPal playbook.”

The payments technology helped buoy parent company eBay’s earnings for the third quarter, with PayPal bringing in $1.1 billion in revenue. In North America, PayPal is now available on 63 of top 100 Internet retailers, up from 56 last year. New merchants include Target and J.Crew. And PayPal continues to add about 1 million active registered accounts per month.

eBay, Inc. is set to debut its brand new developer business tomorrow, X.commerce and we have many of the details that the e-commerce giant will be announcing at its annual developer conference. As we’ve written in the past, eBay, PayPal, Magento and GSI will be the pillars of the X.commerce platform, which will feature a “fabric” that stitches the platform together with other partners to create new experiences for retailers and their customers.

PayPal’s director of communications Anuj Nayar tells me that this is the first time eBay has created a business focused on developers as the customers. Previously developers were part of each business, with separate developer experiences for eBay’s marketplace, PayPal and other businesses. Now, developers will get access to all of these technologies in one place, and according to Nayar, will be able to create new shopping and e-commerce experiences based on these interconnected suite of tools.

X.commerce will also be an open ecosystem, with outside partners also integrating their technologies for the developer community. Adobe, Facebook and Kenshoo have all created experiences and APIs for developers to integrate into their applications relating to online shopping, mobile, and local components.

Local product inventory and shopping site Milo, which eBay acquired last year for $75 million is going to be launching an API for developers to integrate local inventory into their own applications. This will be part of the X.commerce platform as well.

eBay-acquired barcode scanning app RedLaser will soon be launching a 3.0 version of its applications which have been integrated with both Milo and PayPal. So you can scan a barcode, and the app will tell you if its available in a local store or on eBay, and let you pay for it (either in the store or on eBay) in the app via PayPal.

eBay also acquired Magento earlier this year for over $180 million. Magento’s open source software basically enables merchants and brands to create online storefronts and have a decent amount of control over the look, content, SEO, digital marketing and functionality of their online storefronts. Tomorrow, eBay will announce that Magento, via the X.commerce platform, will be launching an app store for Magento extensions. Developers can create applications on top of Magento, and retailers can use this functionality in their online storefronts via the app store. It’s similar in theory to the Salesforce App Exchange, but for online retailers.

In my opinion, one of the biggest products that will be debuted tomorrow is a new collaboration between PayPal and X.commerce called PayPal Access. Basically, PayPal Access is a payments identity technology that would allow you to carry your payments identity to various retailers on the web. So instead of signing up with a specific retailer’s credential’s on a site, you would sign up with your PayPal account which would include all of your financial, shipping and billing information, as well as your purchase history. It’s sort of a cross between Amazon’s payments platform and Facebook Connect. We’re told PayPal is partnering with Gigya and Janrain for PayPal Access.

As Nayar explains, identity is just another piece of the puzzle for PayPal and X.commerce. For now, PayPal has yet to announce any major retailers using Access but I’m sure we can expect a few to jump on board soon.

There’s still much more PayPal, eBay and X.commerce will announce tomorrow, I am told. For example, we don’t know the exact details of the Facebook announcement. Facebook Platform Marketing Chief Katie Burke Mitic just joined eBay’s board.

And considering how bullish both PayPal and eBay are on mobile, we can probably expect more in that area as well. PayPal is also expected to debut a new payments platform for merchants as well as in-store integrations. Stay tuned.

Exclusive-PayPal is going to be setting up a pop-up store in downtown Manhattan, New York to showcase some of the new tools and technologies the payments giant will debut in the next few months.

The space will be located at 174 Hudson, which is located in the Tribeca neighborhood of Manhattan. Over the next 3 and a half months, PayPal will be inviting merchants to come visit the space where they will have the opportunity to get real-time demos of the technologies in realistic point of sale scenarios. The store, which will launch on November 1, will also feature a QR code for people passing by to scan and see more details on the PayPal’s new technologies.

So what new technologies will PayPal be showing off? As the company revealed in September, PayPal is investing in a comprehensive solution for in-store merchants to integrate PayPal into the checkout and mobile payments experience. Later this year, PayPal will be rolling out a one-stop shop for merchants, both online and local businesses, to manage payments from customers.

Features of this new offering will include location-based offers, making payments accessible from any device and offering more payments flexibility to customers after they’ve checked out. Users will have the ability to access realtime store inventory, receive in-store offers, and real-time location-based advertising from stores.

PayPal tells us that it will be debuting its technology that integrated with physical payments gateways in stores (the company is expected to announce a number of partnerships with major retailers soon).

A pop-up store and physical presence for merchants and consumers is actually a wise move for PayPal. The technology hasn’t really had a physical presence in a retail environment, and this can be a contributor towards adoption. For example, mobile payments company Square has in-store retail deals with both Apple and Best Buy. At the moment, PayPal doesn’t have a device to sell (like Square) so a pop-up store can be a centralized place for merchants to see the new technology, and for consumers for experiment with the payments platform.

Google just opened a Chrome pop-up store in London.

Wow. PayPal released some new public numbers recently that show the payments platform is processing a massive number of payments per day. PayPal says that it saw $3,650 in Total Payment Volume every second in Q2 2011. By our calculations, that means PayPal is processing around $315.3 million in payments per day. On average, the payments platform is seeing upwards of over 5 million transactions a day.

PayPal has unequivocally been the crown jewel in parent eBay’s family of businesses. This past quarter, PayPal delivered its first-ever billion dollar revenue quarter. Total net total payment volume (TPV) grew 34% compared to the same period of last year. And PayPal is actually closing in on eBay’s marketplaces segment in terms of revenue (which posted $1.6 billion in revenue in Q2).

Another area where PayPal is growing fast is mobile. The company said earlier this year that is seeing $10 million in mobile transactions per day, and expects more than $3 billion in mobile TPV this year, compared to $750 million in 2010.

To put the $315 million number in perspective, fast growing startup Square (which of course offers an in-store payments product) is seeing $4 million in payments per day. PayPal wants to also tackle in-store payments as well and will be debuting several retail partnerships for this technology this year. And Facebook is generating a fair amount of volume for PayPal as well. It should be interesting to see what eBay and Facebook have up their sleeves in a few weeks.

PayPal’s Total Payment Volume in 2010 represented nearly 18 percent of global e-commerce. With the way that the payments platform is growing, this number should increase in 2011.

At 500 Startups’ Smash Summit in New York today, Robert Scoble revealed that PayPal is launching something big with Facebook in two weeks, and that it would be a more expansive partnership than the existing PayPal-Facebook integrations. This announcement is coming at eBay and PayPal’s X.commerce Innovate conference in two weeks, we’ve confirmed with the payments giant, and Katie Burke Mitic, who leads Platform Marketing for Facebook will be making an announcement. We hear the announcement will be relate of PayPal parent company eBay Inc.’s new developer platform X.commerce.

Last year, PayPal announced its new micropayments product, which Facebook integrated. In early 2010, Facebook announced that you could use PayPal to purchase Credits.

So what could the new deal or integration be? A likely possibility is a Facebook partnership on the new X.Commerce platform, which is a division of eBay, Inc. and is expected to bring together elements from eBay, PayPal, Magento and GSI Commerce. According to PayPal, X.commerce will feature a “fabric” that stitches the platform together to create new experiences for retailers and their customers. A number of partners will be announced (already Adobe and Kenshoo have been revealed as partners), so Facebook could be part of this group.

eBay and PayPal wouldn’t reveal exact details of the integration but did give us this comment from Naveed Anwar, head of X.commerce Community: “We’ve been talking for a while about how the four megatrends of mobile, social, local and digital will change commerce. Yesterday at f8, Facebook made some great announcements that will change social networking. When social and commerce join together great things will be possible and developers will be able to monetize these new developments very quickly.”

PayPal could also announce a deal similar to the one American Express formed with Facebook, which links your credit card account with Facebook to offer users special exclusive deals. If you buy the deal item with your AmEx card, you will be credited the deal amount. The deals you see are influenced by what you and your friends “like” on the Web using the Facebook like button. PayPal already offers deals but a deeper integration with the social network would help close the redemption loop.

With more retailers flocking to Facebook, and as more money is passing through the network via games, apps and others experiences, there is a huge potential for many integrations with online payments giant PayPal. Another announcement we can expect PayPal to make soon—a new payments platform for merchants and in-store payments integrations with retailers.

TechCrunch readers can receive $200 off the registration price for X.commerce Innovate Developers Conference 2011 if they register by Friday, September 30, 2011. You can register here using the code INN2011TC.