Microsoft to allow Xbox Live payments via Paypal

Next week, you’ll be able to use your Paypal account to purchase content on your Xbox 360 system.

Microsoft reportedly plans to begin rolling out a new update to the Xbox 360 on May 19, and one of the biggest changes will be the addition of Paypal support directly from the console.

The company began accepting Paypal payments through the Web-based Xbox Live site a while ago, but with the new update users will be able to add their Paypal account to their Xbox 360.

The feature will allow users without a bank account or credit card to have the same instant access to on-demand movies, game downloads, and Xbox Live Gold subscription management that everyone else has.

Paypal, which is owned by Ebay, is the #1 provider of non-credit-card online payment transactions.

The new Xbox update will bring some other features with it, including an Avatar Kinect app that allows users to play around with their avatar using Kinect controls.

Also, support will be added for a new higher-capacity DVD media, called Xbox Game Disc Format, which will reportedly allow “additional storage space on a game disc, and provide additional layers of copy protection.”

The update will be rolled out in chunks, so only a random handful of users will get it on May 19. Everyone else will be slowly added in through to the end of May.