ITWire reports that Paypal is debuting its mobile payment system, called Paypal Mobile Checkout, in Australia. The system works well for merchants since it's actually affordable (as compared to other services that charge as high as 50% commission for their service).

To use it, customers make purchases via Paypal from any Internet-enabled mobile phone. They do that either by entering their existing Paypal username and password or, by first registering their phone with Paypal, and then simply typing in a 4-8 digit PIN code at purchase time to authorize the transaction.

A number of vendors, including Warner Music and Hoyts, have already signed up for the service and more interesting applications -- such as SMS payments and proximity payments -- should also be on their way (depending, of course, on the rate of consumer take-up).