For those of you who would like an additional method of purchasing on your Xbox Live account, Microsoft has apparently heard your calling, and will address your needs when the next XBL update occurs. Currently, the next update is scheduled for the 19th of May.
Currently, XBL subscribers use personal credit cards to buy points, which, in turn allows them to purchase items from the Xbox marketplace. Points can also be acquired through gift cards, but these are the primary methods for acquiring goods on XBL. That, however, is about to change once the latest dashboard update is in place. Thanks to a mailing received by Joystiq.com, courtesy of a member of the Microsoft team, it has been revealed that PayPal will be soon be available as a method of payment for XBL members.
A screenshot of the mailing in question reveals the details:
A post from GamePro.com reveals PayPal is already accepted by Microsoft billing, however, the once the dashboard update is complete, it should move this capability directly to the console.
While the PayPal inclusion is the "only user facing feature" of the May 19th update -- which will actually take place with six separate updates, going from May 19th to May 30th -- the mailing also details upcoming support for the Xbox Game Disc Format (XGD3). According to text, XGD3 "allows for additional storage space on a game disc, and provides additional layers of copy protection."
Considering how the technological world works, it wouldn't be a bit surprising if these "additional layers of copy protection" were already circumvented.
Hackers-versus-copyright battles aside, the upcoming addition of PayPal to the XBL experience provides at least one option for subscribers: the ability to protecting personal credit card numbers just in case XBL is ever hacked. Granted, the PayPal information would be available, but one little change of the PayPal password eliminates this information from being useful.