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PayPal Holdings, Inc. is an American company operating a worldwide online payments system that supports 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, for which 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.

Early history edit 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 with X.com, an online banking company founded 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&#

The fiscal year for Paypal is from January 1st to December 31st. For fiscal year 2019, Paypal reported earnings of US$2.459 billion, with an annual revenue of $17.772 billion, an increase of 15% over the previous fiscal cycle. PayPal's shares traded at over $108 per share, and its market capitalization was valued at over $127.58 billion in December 2019. Year Revenue in mil. $ Net income in mil. $ Total Assets in mil. $ Price per Share in $ Employees 2012 5,662 778 2013 6,727 955 19,160 2014 8,025 419 21,917 2015 9,248 1,228 28,881 36.20 16,800 2016 10,842 1,401 33,103 39.47 18,100 2017 13,094 1,795 40,774 73.62 18,700 2018 15,451 2,057 43,332 84.09 21,800 2019 17,772 2,459 51,333 108.17 23,200 The Covid-19 pandemic has accelerated the growth of digital payment platforms, including PayPal, at the expense of the traditional banking sector. As a result, Paypal has seen an increase in its stock to up to 78% in 2020

PayPal's corporate headquarters are located in the North San Jose Innovation District of San Jose, California, at North First Street campus. The company's operations center is located in Omaha, Nebraska, which was opened in 1999. Since July 2007, PayPal has operated across the European Union as a Luxembourg-based bank. The PayPal European headquarters are located in Luxembourg and the international headquarters are in Singapore. PayPal opened a technology center in Scottsdale, Arizona in 2006, and a software development center in Chennai, India in 2007. In October 2007, PayPal opened a data service office on the north side of Austin, Texas, and also opened a second operations center in La Vista, Nebraska that same year. In 2011, joining similar customer support operations located in Berlin, Germany; Chandler, Arizona; Dublin and Dundalk, Ireland; Omaha, Nebraska; and Shanghai, China; PayPal opened a second customer support center in Kuala Lumpur, Malaysia, and began the hiring

As of 2020update, PayPal operates in 202 markets and has 305 million active, registered accounts. PayPal allows customers to send, receive, and hold funds in 25 currencies worldwide. PayPal's services allow people to make financial transactions online by granting the ability to transfer funds electronically between individuals and businesses. Through PayPal, users can send or receive payments for online auctions on websites like eBay, purchase or sell goods and services, or donate money or receive donations. It is not necessary to have a PayPal account to use the company's services. PayPal account users can set currency conversion option in account settings. From 2009 to 2016, PayPal operated Student Accounts, allowing parents to set up a student account, transfer money into it, and obtain a debit card for student use. The program provided tools to teach how to spend money wisely and take responsibility for actions. PayPal discontinued Student Accounts in August 2016. In Novem

PayPal launches different marketing activities in various channels and emphasizes that consumers can use it in different ways. PayPal's marketing includes TV commercials, outdoor advertising, Facebook, and display advertisement. PayPal provides free analytics to traders about the ways that consumers utilize online payments. Through the free tracking service, PayPal assists traders in targeting consumers. PayPal's code gathers the consumer information which can be installed on the trader's website. Both PayPal and traders benefit from the free service. PayPal partners with Synchrony Financial to provide the PayPal Cashback Mastercard, which offers 2% cash back to customers who use the card to make purchases both online and in physical stores. PayPal’s cashback financial service promotes the number of potential customers. Apple allows PayPal as a mode of payment for App Store, Apple Music, iTunes, and Apple Books. PayPal can increase usage of Apple platforms. In addition, Pay

Thiel, a founder of PayPal, has stated that PayPal is not a bank because it does not engage in fractional-reserve banking. Rather, PayPal's funds that have not been disbursed are kept in commercial interest-bearing checking accounts. In the United States, PayPal is licensed as a money transmitter, on a state-by-state basis. But state laws vary, as do their definitions of banks, narrow banks, money services businesses, and money transmitters. Although PayPal is not classified as a bank, the company is subject to some of the rules and regulations governing the financial industry including Regulation E consumer protections and the USA PATRIOT Act. The most analogous regulatory source of law for PayPal transactions comes from peer-to-peer (P2P) payments using credit and debit cards. Ordinarily, a credit card transaction, specifically the relationship between the issuing bank and the cardholder, is governed by the Truth in Lending Act (TILA) 15 U.S.C. §§ 1601-1667f as implemented by Re

The PayPal Buyer Protection Policy states that the customer may file a buyer complaint if he or she did not receive an item or if the item he or she purchased was significantly not as described. The customer can open a dispute within 180 days from the date of payment and escalate it to a claim within 20 days from opening the dispute. If the buyer used a credit card, he or she might get a refund via chargeback from his or her credit-card company. However, in the UK, where such a purchaser is entitled to specific statutory protections (that the credit card company is a second party to the purchase and is therefore equally liable in law if the other party defaults or goes into liquidation) under Section 75 Consumer Credit Act 1979, the purchaser loses this legal protection if the card payment is processed via PayPal. Also, the Financial Ombudsman Service position is that section 75 protection does not apply where PayPal or any eMoney service becomes involved in the credit card transactio

Security token edit In early 2006, PayPal introduced an optional security key as an additional precaution against fraud. A user account tied to a security key has a modified login process. Account-holders enter their login ID and password as normal but are then prompted to enter a six-digit code provided by a credit card sized hardware security key or a text message sent to the account holder's mobile phone. For convenience, users may append the code generated by the hardware key to their password in the login screen. This way they are not prompted for it on another page. This method is required for some services, such as when using PayPal through the eBay application on iPhone. This two-factor authentication is intended to make it difficult for an account to be compromised by a malicious third party without access to the physical security key, although it does not prevent the so-called Man in the Browser (MITB) attacks. However, the user (or malicious third party) can alternativel

As early as 2001, PayPal had substantial problems with online fraud, especially international hackers who were hacking into PayPal accounts and transferring small amounts of money out of multiple accounts. Standard solutions for merchant and banking fraud might use government criminal sanctions to pursue the fraudsters. But with PayPal losing millions of dollars each month to fraud while experiencing difficulties with using the FBI to pursue cases of international fraud, PayPal developed a private solution: a "fraud monitoring system that used artificial intelligence to detect potentially fraudulent transactions. ... Rather than treating the problem of fraud as a legal problem, the company treated it as a risk management one." 150,000 PayPal cards frozen edit In 2015, 150,000 Spanish card holders had their funds frozen in an apparent fraud case involving a PayPal service provider, Younique Money, which was the de facto administrator of the cards. Previously, PayPal had charg

In 2003, PayPal voluntarily ceased serving as a payment intermediary between gambling websites and their online customers. At the time of this cessation, it was the largest payment processor for online gambling transactions. In 2010, PayPal resumed accepting such transactions, but only in those countries where online gambling is legal, and only for sites which are properly licensed to operate in said jurisdictions. If an account is subject to fraud or unauthorized use, PayPal puts the "Limited Access" designation on the account. PayPal has had several notable cases in which the company has frozen the account of users such as Richard Kyanka, owner of the website Something Awful, in September 2005, Cryptome in March 2010, or April Winchell, the owner of Regretsy, in December 2011. The account was reinstated, and PayPal apologized and donated to her cause. In September 2010, PayPal froze the account of a Minecraft developer, Markus Persson. Persson stated publicly that he had no

In March 2002, two PayPal account holders separately sued the company for alleged violations of the Electronic Funds Transfer Act (EFTA) and California law. Most of the allegations concerned PayPal's dispute resolution procedures. The two lawsuits were merged into one class-action lawsuit (In re: PayPal litigation). An informal settlement was reached in November 2003, and a formal settlement was signed on June 11, 2004. The settlement requires that PayPal change its business practices (including changing its dispute resolution procedures to make them EFTA-compliant), as well as making a US$9.25 million payment to members of the class. PayPal denied any wrongdoing. In June 2003, Stamps.com filed a lawsuit against PayPal and eBay claiming breach of contract, breach of the implied covenants of good faith and fair dealing, and interference with contract, among other claims. In a 2002 license agreement, Stamps.com and PayPal agreed that Stamps.com technology would be made available to a