PayPal, a subsidiary of eBay Inc., is streamlining its operations, consolidating nine different product teams into one organization.

"PayPal is working to accelerate innovation by simplifying its product organization and creating more agile development teams," said John Donahoe, president and chief executive officer at eBay, during a conference call Oct. 17 to discuss third-quarter earnings.

PayPal's planned headcount reductions are not meant to be a way of cutting costs or improving efficiency, says Donahoe. The company has communicated the change with employees.

The subsidiary's revenue increased by 24% to $1.4 billion and its total payment volume was up 23% to $35.2 billion, said Robert Swan, chief financial officer and senior vice president of finance at eBay, during the call.

For the company as a whole, third-quarter revenue increased by 15% to $3.4 billion from the same period a year earlier. Its net income rose 22%, to $597 million.

Donahoe highlighted the growth of mobile commerce, which he called "a game changer."

By the end of 2012, eBay expects to do more than $10 billion in mobile payments volume. Out of all mobile sales completed with PayPal Mobile Express Checkout, 35% were incremental, according to a commissioned study in July.

In May, PayPal announced 15 national retail partners for its digital point of sale payment system. So far, PayPal works with 10 of these retailers in more than 7,000 stores. By yearend, PayPal plans on deploying its system with 10 more retailers. Next year, its retail acceptance is set to grow further through a partnership with Discover Financial Services, giving it access to 7 million U.S. merchant locations.

"There is strong interest from retailers of bringing PayPal to point of sale," Donahoe says.

During the current deployments, consumer preferences have already emerged. Approximately 70% of in-store PayPal payments are made with just a mobile number and PIN, says Donahoe. PayPal also allows users to make payments by swiping an optional plastic card.

Using PayPal, eBay plans to penetrate emerging markets, which will provide two billion new Internet users in the next three to five years, starting with work in Brazil, Donahoe says.

eBay also launched an updated version of RedLaser, a bar code scanning app that allows comparison shopping using a mobile device. Best Buy is the first major retailer to partner with RedLaser.

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