PayPal expects to process over $10 billion-worth of mobile payments this year, up at least 250% from $4 billion in 2011. The figure represents an increase of over 700% from a reported $141 million in 2009.

"Consumers are choosing PayPal Mobile because it offers a unique, easy and safe way to pay on a mobile device," said John Donahoe, CEO of PayPal’s parent, eBay, yesterday. "And merchants are finding that putting PayPal on their mobile experiences drives higher checkout conversion and higher sales."

PayPal offers a range of mobile payments services, including money transfers, online payments and even in-store transactions. Mobile technology is also helping eBay to offer retailers ‘cross channel’ shopping experiences in their stores, the company claimed.

One example of this is RedLaser, a smartphone barcode scanning application it acquired in 2010. Electronics retailer Best Buy is using RedLaser to allow shoppers to scan items in-store and receive special discounts.

This is a clear attempt to combat the practice of shoppers browsing products instore and then checking prices and buying online. "This is a great example of how mobile technology can be used to enhance local retail shopping experiences, not simply disrupt them," said Donahoe.

In August, the company ran a pilot of another mobile app, called eBay Now, in San Francisco. "Customers in San Francisco can purchase products on their phones from hundreds of local stores, including major retailers such as Target, Walgreens and Macy’s, and then have these items delivered anywhere in the city, usually in less than an hour," said Donahoe.

He also revealed that when using PayPal instore, 70% of customers choose to input their phone number and PIN code on a point of sale terminal, rather than the other option of scanning the item on their smartphone and paying via PayPal Mobile. 

Donahoe made the remarks as he discussed eBay’s latest financial report with investment analysts. eBay’s revenue grew 15% to $3.4 billion during the third quarter of the year,