PayPal Inc. is beginning its second contest to encourage third-party software developers to create applications that tie into its payment system.

The San Jose unit of eBay Inc. is offering $100,000 as the grand prize for what it determines to be the most innovative application, as well as awards of $10,000 each in several different categories. They include one for the best application that uses eBay's auction system, the best entry from university students and the best for promoting cross-border commerce, among others.

The contest is called the PayPal X Developer Challenge; the development platform, X.com, is named after an Internet bank PayPal used to run.

PayPal launched its development platform last year to encourage adoption of its payment system in unconventional uses.