PayPal will generate $1 billion this year from online-transaction formats created by third-party developers, and now credit card companies are ready to get in on the action. Visa, MasterCard and American Express have spent nearly $3 billion buying Web-based payment-processing systems, and in a new approach, they're looking outside their own companies for innovative programmers. "We need to get ideas from as wide an array of sources as possible," said Garry Lyons, the group executive of research and development for MasterCard.

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