Paypal functionality has been confirmed by Microsoft to be included in the new Xbox 360 Dashboard update. The new payment option will enable users to make purchases with their PayPal accounts.
Users will have to link both their Paypal and Live accounts in order to use the service. Moreover, the service will only be available in limited regions, with Brazil, Chile, Colombia, Czech Republic, Finland, Greece, Hungary, India, Japan, Russia, South Africa, South Korea and Taiwan excluded.
The update hits today and will add several new functionalities, including a new stand-by feature that shuts the system down after it's been idle for an hour or longer.