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,, 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.