According to a report from Finextra, PayPal appears to be working on a mobile payment service. PayPal has posted ads looking for employees to work the new PayPal Mobile business unit.
In the ads, the company describes PayPal Mobile as "a dynamic, young 'start-up' business unit within PayPal dedicated to bringing value-added mobile payment services to consumers and merchants."
PayPal Mobile wouldn't be without competition, TextPayMe is a rather new company that runs a PayPal like payment service over SMS. While they have the first mover advantage, PayPal's huge list of registered members would likely make it the largest mobile payment provider overnight.