The Safer, Easier Way to Pay.
PayPal
Tagline
Net Worth
$274,340,000,000
Started in (City)
California
Started in (Country)
United States
Incorporation Date
01st December, 1998
Bankruptcy Date
-
Founders
- Elon Musk
- Yu Pan
- Peter Thiel
- Max Levchin
- Luke Nosek
- Ken Howery
About
PayPal Holdings, Inc. is an American company operating an online payments system in the majority of countries that support online money transfers, and serves as an electronic alternative to traditional paper methods like checks and money orders. The company operates as a payment processor for online vendors, auction sites, and many other commercial users. It charges a fee in exchange for benefits such as one-click transactions and password memory. Established in 1998 as Confinity,PayPal had its initial public offering in 2002. It became a wholly owned subsidiary of eBay later that year, valued at $1.5 billion. In 2015, eBay spun off PayPal to eBay's shareholders. The company ranked 204th on the 2019 Fortune 500 of the largest United States corporations by revenue.
Beginning
PayPal was originally established by Max Levchin, Peter Thiel, and Luke Nosek in December 1998 as Confinity, a company that developed security software for handheld devices. It had no success with that business model, however, so switched its focus to a digital wallet. The first version of the PayPal electronic payments system was launched in 1999. In March 2000, Confinity merged into X.com, an online banking company founded in January 1999 by Elon Musk. Musk was optimistic about the future success of the money transfer business Confinity was developing. Musk and Bill Harris, then-president and CEO of X.com, disagreed about the potential future success of the money transfer business and Harris left the company in May 2000. In October of that year, Musk decided that X.com would terminate its other internet banking operations and focus on PayPal. That same month, Elon Musk was replaced by Peter Thiel as CEO of X.com, which was renamed PayPal in 2001 and went public in 2002.PayPal's IPO listed under the ticker PYPL at $13 per share and generated over $61 million.
Road to Success
The company reached 100 million active users from more than twenty-five different countries by 2010. Till now PayPal only provided online money transactions. In 2011, the company decided to provide offline services. The company wanted to deliver the advantage of paying in retail shops via PayPal. For launching this, PayPal came into a partnership with Discover Card in 2012. After the offline scheme was launched, it reached more than 7 million retail shops. This led the volume of PayPal’s payment transaction to $145 billion. In 3rd October 2002, eBay acquired PayPal for $1.5 billion. It was the biggest turning point in the success story of PayPal. After this business deal was closed, PayPal payments increased exponentially. Most of the eBay users paid through PayPal as it appeared as the default choice. Five years from buying PayPal, the company’s annual revenue summed up to $1.8 billion. In 2008, PayPal made two big acquisitions including Fraud Science (for managing frauds) and Bill Me Later.
Challenges
If eBay wants to make its PayPal online payment service the common currency of the Internet, it first has to solve problems encountered by Web merchants like Adam Safran. Since December, Safran has used PayPal to handle cash transfers and process credit card payments for the sock monkey dolls and other primate-inspired items he sells at his Monkeygoods.com Internet store. But because PayPal forces prospective customers to its own site to complete their purchases, some give up in apparent frustration--costing him sales, he said. "What would be perfect for me is if the user never had to leave my site," said Safran, a Reseda, Calif.-based Web developer. He also said he would like to see PayPal work better with his e-commerce software. Safran and other Internet merchants are raising issues like these as PayPal tries to diversify its user base beyond eBay's online auction community, which accounted for nearly 70 percent of the $2.8 billion in payments it processed in the second quarter.
eBay said this summer it is investing heavily to expand PayPal's reach, both off-EBay and internationally.
Failures
You lose your Section 75 rights. If you use PayPal with your credit card to pay for an item that costs more than £100, then you are missing out on extra protection when making your purchase. Section 75 of the Consumer Credit Act protects you when you pay for something costing between £100 and £30,000, specifically on a credit card. This is because the card company is jointly liable with the retailer should anything go wrong. But Section 75 applies only when there is a direct relationship between the debt (using the card) and the product. It doesn’t apply when you get a loan or use a payment provider like PayPal. PayPal charges you to receive money. If you use PayPal to receive payments – particularly on eBay – then it will charge you anything between 5 and 10 per cent of the total price. That means that eBay sellers not only face the fees imposed by the auction service, but will also be charged when they finally sell their item and receive the money through PayPal.
Achievements
- Webby Award for Best Financial Services Site and Webby People’s Voice
- Ranked 72, in the Interbrand Top Brands List.
- PayPal Holdings Inc is in the list of prestigious Fortune 500 companies, currently ranked at 204.
Subsidies
- Venmo
- Xoom Corporation
- Honey
- iZettle
- Braintree,
CEOs
- Dan Schulman
- Elon Musk