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PayPal wants your start-up

Payment platform launches incubator program, called Startup Accelerator.

After revealing at Demo the winners of its Developers Challenge, PayPal had a consolation prize for the companies that didn't win the award: the company is announcing a funding project for new apps builders. Participants in the PayPal Startup Accelerator Program can get not just funding, but space at the PayPal building as well as access to PayPal's marketing muscle.

Given the inevitable growth of competitive payment technologies (see Square), it's smart for PayPal to encourage companies to build on its platform in whatever way it can. And let's not forget: Doing a start-up on a payment system like PayPal is more likely to actually generate revenue than some touchy-feely social network thing that the founders have no idea how to monetize.

The two winners of the Developers Challenge were AppBackr and Rentalic. AppBackr is a marketplace for iPhone developer code. It's a way for developers to make a few bucks from their clever coding before the App Store approves their product. Rentalic helps renters and property owners by making some of the financial transactions easier, like guaranteeing to the owner that the potential renter has sufficient funds to rent the property.

Osama Bedier, vice president of PayPal's platform and emerging technologies bumps phones with the winners of the PayPal developer challenge to transfer them the $50,000 prize money. Josh Lowensohn/CNET