PayPal is moving quickly to integrate the iPhone 5S fingerprint reader into its mobile payment apps.

Yesterday, a team of PayPal developers attended a session on Touch ID, Apple's fingerprint-scanning system, at the company's annual Worldwide Developers Conference in San Francisco, a PayPal source told us.

Apple Executive Craig Federighi Announces New Touch ID Features Apple

Touch ID would allow PayPal and other apps to authenticate users with a fingerprint scan rather than a typed password.

Earlier in the week, at the start of WWDC, Apple announced it would open Touch ID integration to third-party app developers through an API (software allowing outside apps to hook into a phone feature).

"It seems to be a fairly easy API to use, but we're still kicking the tires," the PayPal source tells us.

Anuj Nayar, PayPal's senior director of global initiatives, confirmed in an email that company developers had attended the session.



Currently, the iPhone fingerprint scanner can only be used to unlock the phone or authorize iTunes Store purchases.

Touch ID may also anchor an eventual full-fledged mobile wallet service from Apple itself (Apple's Passbook app stores coupons and loyalty cards but can't be used on its own to pay for things). An Apple wallet, in combination with Touch ID, might be used by iPhone users to checkout instantly on e-commerce apps and to pay in-person at retail stores without a credit card or having to enter passwords or PINs.

Meanwhile, the opening up of Touch ID is beneficial to Apple on a couple of levels, says Thad Peterson, senior analyst at Aite Group. "If I can use PayPal with the iPhone using my thumbprint, that creates incremental value for consumers." Plus, Apple will collect valuable information, Peterson adds. "That’s the advantage of throwing it out to developers, it’s a testing ground to see what works.”

This story was first reported by BI Intelligence, a research service from Business Insider. Sign up today and receive Payments Insider, a new AM briefing for payments executives, every morning in your inbox.