PayPal (Image Source: Unsplash)

An electronic replacement for conventional paper methods like checks and money orders, PayPal Holdings, Inc. is an American multinational financial technology firm that operates an online payment system in most countries that permit online money transfers. The business processes payments for internet retailers, auction sites, and several other business users for a fee.

PayPal, originally known as Confinity, was founded in 1998 and went public in 2002 via an IPO. Later that year, it was acquired by eBay and was given a $1.5 billion valuation. 2015 saw eBay spin out PayPal to its stockholders, restoring PayPal’s independence.

The business was listed as the 143rd largest U.S. corporation by revenue in the 2022 Fortune 500.


In December 1998, Max Levchin, Peter Thiel, and Luke Nosek founded Confinity, a business that created security software for portable electronic devices. But after failing with that commercial strategy, it shifted its attention to a digital wallet. In 1999, the PayPal electronic payments system debuted in its initial iteration.

Confinity and, a provider of online financial services established in March 1999 by Elon Musk, Harris Fricker, Christopher Payne, and Ed Ho, merged in March 2000. Musk felt confident in the Confinity-developed money transfer company’s ability to succeed in the future. Due to disagreements between Musk and Bill Harris, the company’s former president and CEO, and the probable future success of the money transfer industry, Harris departed in May 2000.

Musk made the decision for to discontinue its other online banking services and concentrate on PayPal in October of that year. Peter Thiel took over as CEO of, which was renamed PayPal in 2001 and went public in 2002, from Elon Musk in the same month. Under the ticker PYPL, PayPal’s initial public offering produced nearly $61 million at a price of $13 per share.

eBay affiliate (2002–2014)

On October 3, 2002, a few times after PayPal’s initial public offering, eBay purchased the business for $1.5 billion in eBay stock. PayPal payments were accepted in more than 70% of all eBay auctions, and almost 1 in 4 closed auction listings had PayPal transactions. The service competes with Google Checkout, Citibank’s c2it, YahooPayDirect, !’s, and eBay subsidiary Billpoint in addition to becoming the default payment option for the majority of eBay customers.

In order to offer further security protection, PayPal purchased the VeriSign payment service in 2005.

PayPal paid $169 million in January 2008 to purchase Fraud Sciences, a privately held Israeli start-up that created online risk solutions. An online transactional credit provider called Bill Me Later was purchased by the business in November 2008.

In order to further product development and mobile services, PayPal purchased Braintree and IronPearl in 2013, two Palo Alto startups that provide engagement software.

A division of eBay (2014–present)

On September 30, 2014, it was revealed that eBay will split off PayPal into a different publicly listed business, as dissident hedge fund tycoon Carl Icahn had urged in 2013. On July 18, 2015, the spin-off was finished.

On May 17, 2018, PayPal and iZettle, a Swedish payment processor, reached a $2.2 billion agreement. Up until late November 2019, this was PayPal’s largest purchase. According to the firm, the in-store experience and digital marketing ability would complement PayPal’s currently online and mobile payment capabilities.

In connection with the launch of PayPal’s “Checkout on Instagram” checkout option, the firm announced cooperation with Instagram on March 19, 2019.

PayPal ascended to the top of the domestic online payment business in January 2021 when it became the first foreign company in China to own 100% of a payment platform.

Bloomberg reported on October 20, 2021, that PayPal is interested in buying Pinterest, with a possible price of roughly $70 per share. However, there is no guarantee that the negotiations would result in a deal.


The services offered by PayPal enable customers to conduct financial transactions online by enabling the electronic movement of payments between persons and companies. Users may buy, sell, and give products and services using PayPal, as well as make and receive payments for online auctions on sites like eBay.

Bill Me Later, Inc., a provider of online credit, was purchased by PayPal in 2007[106]; since then, it has changed its name to PayPal Credit and continues to serve Comenity Capital Bank, the institution that finances PayPal Credit customers. Bill Me Later was established in 2000, and its main office is in Timonium, Maryland.

The startup introduced “PayPal Here” in 2012, a method for small business mobile payments that combines free mobile software with a tiny card reader that plugs into a smartphone.

On October 21, 2020, PayPal unveiled a new service that would enable users to pay with cryptocurrency at 26 million network-connected stores beginning in 2021.

As of 2022, PayPal has 426 million active, registered accounts and serves 202 markets. Customers may use PayPal to transfer, receive, and store money globally in 25 different currencies.

Global scope

PayPal is accessible in more than 200 nations and territories.

Send only (Package Service only allows sending; valid in 97 countries), PayPal Zero (Package suggests the possibility of enrollment, entry, and withdrawal of funds in foreign currencies; however, the user cannot hold the balance PayPal account; operates in 18 countries), and SRW Send – Receive – Withdrawal (the possibility of enrollment, input-output and the ability to keep your PayPal account balance in the currency and to transfer to the card when the user sees fit, operates in 41 countries) include Local Currency (SRW plus opportunity to conduct transactions in the local currency, 21 countries).


Late in March 2010, new banking laws in Japan compelled PayPal Japan to stop the ability of users with personal accounts registered in Japan to send or receive money between people. As a result, all transactions are now subject to PayPal’s business fees.


In order to comply with Reserve Bank of India rules, PayPal updated the User Agreement for Indian users in March 2011. Since October 14, 2011, the per-transaction cap had been set at USD $3,000. However, PayPal raised the single transaction cap to USD $10,000 on July 29, 2013. This aligns PayPal’s limits in most other countries with the per-transaction cap for India.


PayPal and Baidu established cooperation in July 2017 to enable the 100 million mobile wallet customers of the Chinese company to pay PayPal’s 17 million merchants via the Baidu platform.

Palestinian Territories and Israel

While PayPal is unavailable in the Palestinian territories, it is available in Israel. PayPal is not accessible to Palestinians who are employed in the West Bank or Gaza, although it is available to Israelis who reside in West Bank settlements. Palestinian tech businesses are requesting a revision in PayPal’s policy as a result of this decision.


On June 6, 2016, the Turkish financial authority BDDK rejected Paypal’s application for a payment license, ending its eight-year presence in the nation. To comply with government and court mandates to censor material and to collect taxes, the regulators had insisted that PayPal’s data centers be situated within Turkey.

South Asia

In order to reestablish connections, the PayPal team was due to visit Sri Lanka in the middle of January 2017. PayPal won’t be active in the nation after 2021.


Users in Pakistan have access to Xoom, a PayPal-owned money transfer service. In order to raise money to construct two dams, Pakistan’s government employed Xoom in October 2018.


Due to the Russian invasion of Ukraine in 2022, PayPal ceased all operations in Russia in March of that year.


PayPal stopped operating in Crimea in January 2015 in accordance with international sanctions against Russia and Crimea.


Paypal’s financial year runs from January 1 to December 31. Paypal declared earnings of US$2.459 billion for the 2019 fiscal year, with yearly revenues of $17.772 billion, an increase of 15% over the previous fiscal year. In December 2019, PayPal’s market capitalization was over $127.58 billion and its shares were trading at over $108.

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The North First Street campus in San Jose, California’s North San Jose Innovation District is home to PayPal’s corporate headquarters. The company’s operations center, which was established in 1999, is situated in La Vista, Nebraska. Since July 2007, PayPal has functioned as a bank based in Luxembourg within the European Union.

The international headquarters of PayPal are in Singapore, whereas the European headquarters are in Luxembourg. In 2006, PayPal established a technology hub in Scottsdale, Arizona, and in 2007, a software development hub in Chennai, India. In addition to opening a second operations center in La Vista, Nebraska that same year, PayPal also opened a data service facility on the north side of Austin, Texas, in October 2007.

In 2011, PayPal launched a second customer service center in Kuala Lumpur, Malaysia, and started the hiring process to join comparable customer support operations in Berlin, Germany; Chandler, Arizona; Dublin and Dundalk, Ireland; Omaha, Nebraska; and Shanghai, China. PayPal inaugurated a brand-new global operations hub in Kuala Lumpur in 2014.

PayPal digital marketing

PayPal undertakes several marketing initiatives across a range of platforms and promotes the variety of ways that customers may use it. Advertising methods used by PayPal include TV commercials, billboards, Facebook, and display ads.

PayPal gives merchants access to free information on how customers use online payments.

The PayPal Cashback Mastercard is made available through a partnership between PayPal and Synchrony Financial. Customers who use the card to make purchases both online and offline will receive 2% cash back. The financial service offered by PayPal for payback increases the pool of prospective clients.

For the App Store, Apple Music, iTunes, and Apple Books, Apple accepts PayPal as a form of payment. PayPal also makes money from other Apple products, including the App Store.

Controversy and criticism

PayPal unilaterally stopped acting as a payment processor for online gambling companies and their consumers in 2003. It was the biggest payment processor for online gambling transactions at the time of this discontinuation.

The account of Markus Persson, a creator of Minecraft, was frozen by PayPal in September 2010. In a public statement, Persson complained that he had not been given a clear explanation of why the account had been suspended and that PayPal had threatened to withhold the funds if anything was incorrect.

PayPal disabled the account of “RosUznik,” a Russian human rights group that supported political detainees detained at Bolotnaya Square, in May 2014.

According to allegations that the content on Alex Jones’ website InfoWars was abusive and discriminatory toward particular religious groups, PayPal banned the radio presenter and his website in September 2018.

PayPal released updated terms of service in September 2020, including a charge for dormant accounts in 19 nations. PayPal informed customers of the amended conditions through email but failed to note the addition of a charge.

Branko Marcetic reported in May 2022’s issue of Jacobin that PayPal had closed many left-wing media websites’ accounts and frozen their cash.

PayPal Fraud

PayPal experienced severe issues with online fraud as early as 2001, particularly with respect to foreign hackers who were breaking into PayPal accounts and moving tiny sums of money across several accounts. Government criminal punishments are frequently used as remedies for merchant and banking fraud. PayPal created a fraud monitoring system to identify possible fraudulent transactions, but as a result of losing millions of dollars each month to fraud and having trouble utilizing the FBI to investigate cases of international fraud, PayPal has also experienced challenges in doing so. Peter Thiel founded Palantir, a big-data security startup whose original objective was to “prevent terrorism while safeguarding civil rights,” as a result of PayPal’s creation of fraud monitoring software.

150,000 frozen PayPal cards

A suspected fraud case involving a PayPal service provider, Younique Money, which served as the de facto administrator of the cards, resulted in the freezing of cash for 150,000 Spanish cardholders in 2015. In the past, PayPal has automatically charged each cardholder €15. (150,000 users). Most of the cash had not been reimbursed as of March 2015.

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