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PayPal is launching a contest to find the best integration of the payments service into a Facebook app. A Paypal app was already launched this month, enabling payments between friends, and we also covered the launch of the eBay Facebook app.
However, now PayPal will award $10,000 to whoever mashes up the PayPal API to create the most interesting Facebook app. Two second-place runners up prizes of $5,000 will be awarded, while four third place winners will get $2,500. The contest runs from today until August 10, 2007.