A History of PayPal
Once upon a time, buying things on the Internet either meant sending a cheque to a physical location or filling out clumsy, potentially dangerous forms which would send your card details to whatever company you were purchasing from. Put simply, it wasn’t ever quick, simple or painless. Naturally, something had to be done to improve the way that transactions were processed on the Internet, and whichever company could make it work would likely become very valuable indeed.
PayPal was established in December 1998 as Confinity, a software company that primarily worked on security for mobile devices and founded by Max Levchin, Peter Thiel, Luke Nosek, and Ken Howery. PayPal was developed internally as a secure money transfer service within Confinity in 1999, and in March 2000 the company merged with X.com, an online banking company founded by Elon Musk (now most famous for SpaceX and Tesla Motors), though Musk left the company shortly thereafter because of a disagreement. PayPal became the official name of the service in 2001, and saw incredible growth, so much so that the company decided to take PayPal public in 2002, an IPO which ended up generating over $61 million.
In July 2002, PayPal was acquired by the auction website eBay for $1.5 billion. At that time, more than 70% of eBay sellers were accepting PayPal payments and roughly 1 in 4 auctions were paid that way, so it make perfect sense for PayPal to come in house at eBay. Within a few short years, eBay began to shutter the doors on other online payment systems, moving to an exclusively PayPal system.
By 2010, PayPal had grown to such a gigantic scale that it had over 100 million active monthly users spread across 190 different markets and in 25 different currencies and soon launched their system for merchants, which would let physical stores transact through PayPal with the use of a mobile terminal. In September 2014, the company announced it would spin off away from eBay into a separate publicly traded company, a move that was completed on in July 2015.
Today, PayPal has over 170 million users and an annual revenue in excess of US$8 billion. Those numbers make it by far the biggest online payments company in the world, and thanks to their ongoing TV adverts and improved mobile applications, more and more people are signing in to PayPal to send money.
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