According to a leaked internal memo sent to Joystiq, Microsoft are planning to roll out their next Xbox 360 dashboard update on May 19th. As well as support for the new Xbox 360 disc format (which provides "additional storage on a game disc and an additional layer of copy protection"), this new patch will reportedly include PayPal functionality that will allow British and European customers to directly pay for Microsoft Points and Xbox Live subscription without the need for a credit card.
Microsoft have spoken out to say that they have "nothing to announce" on the matter. We'll keep you posted.
Considering the recent PSN woes, are you worried that PayPal might provide a potential weak link in Xbox Live security? Or will it be a convenient boon that helps to create more competition over subscription and points prices? Drop us a line in the comments!