Microsoft is finally rolling out PayPal billing support for international Xboxers as part of the larger release of  the new Xbox 360 System Update.

This might not seem like a big deal for most people, but for those of us who live outside of the US and use PayPal as our only option for online purchasing, this is a big deal. Not to mention that my “Daily Brief” co-host Paul O’Flaherty will be a happy camper because now he won’t have to listen to me complain about this subject anymore.

As a side note it looks like this carries over to the Zune Marketplace as well.

Anyway here is the official announcement that made my morning:

I am happy to announce that, as a part of a new Xbox 360 System Update, we’re expanding our integration with PayPal to allow U.S. and international Xbox LIVE users to make purchases on their Xbox 360 consoles with their PayPal accounts.* Once you’ve linked your PayPal account to your Xbox LIVE account on Xbox.com, you’ll be off and running to use it as a billing option, allowing you to buy content such as Microsoft Points, Xbox LIVE Gold subscriptions and Games on Demand titles.

The only downside to this great news is that I can definitely see that between Valve’s Steam game store, both Xbox Live and the Zune Marketplace my PayPal account is going to take some punishment.

[Cross-posted at Winextra]