History

Early historyedit

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's IPO listed under the ticker PYPL at $13 per share and generated over $61 million.

eBay subsidiary (2002–2014)edit

Shortly after PayPal's IPO, the company was acquired by eBay on October 3, 2002, for $1.5 billion. More than 70 percent of all eBay auctions accepted PayPal payments, and roughly 1 in 4 closed auction listings were transacted via PayPal. PayPal became the default payment method used by the majority of eBay users, and the service competed with eBay's subsidiary Billpoint, as well as Citibank's c2it, Yahoo!'s PayDirect, and Google Checkout.

In 2005, PayPal acquired the VeriSign payment solution to provide added security support. In 2007, PayPal announced a partnership with MasterCard, which led to the development and launch of the PayPal Secure Card service, a software that allows customers to make payments on websites that do not accept PayPal directly. By the end of 2007, the company generated $1.8 billion in revenue.

In January 2008, PayPal acquired Fraud Sciences, a privately held Israeli start-up that developed online risk tools, for $169 million. In November 2008, the company acquired Bill Me Later, an online transactional credit company.

By 2010, PayPal had over 100 million active user accounts in 190 markets through 25 different currencies. In July 2011, fourteen alleged members of the Anonymous hacktivist group were charged with attempting to disrupt PayPal's operations. The denial of service attacks occurred in December 2010, after PayPal stopped processing donations to WikiLeaks. On December 5, 2013, 13 of the PayPal 14 pleaded guilty to misdemeanor and felony charges related to the attacks.

The company continued to build its Merchant Services division, providing e-payments for retailers on eBay. In 2011, PayPal announced that it would begin moving its business offline so that customers can make payments via PayPal in stores. In August 2012, the company announced its partnership with Discover Card to allow PayPal payments to be made at any of the 7 million stores in Discover Card's network. By the end of 2012, PayPal's total payment volume processed was US$145,000,000,000. and accounted for 40% of eBay's revenue, amounting to US$1,370,000,000 in the 3rd quarter of 2012.

In 2013, PayPal acquired IronPearl, a Palo Alto startup offering engagement software, and Braintree, a Chicago-based payment gateway, to further product development and mobile services. In June 2014 David Marcus announced he was leaving his role as PayPal President; Marcus joined PayPal in August 2011 after its acquisition of Zong, of which he was the founder and CEO. David Marcus succeeded Scott Thompson as president, who left the role to join Yahoo. PayPal announced that Marcus would be succeeded by Dan Schulman, who previously served as CEO of Virgin Mobile and Executive vice president of American Express.

Spin-off from eBay (2014–present)edit

It was announced on September 30, 2014, that eBay would spin off PayPal into a separate publicly traded company, a move demanded in 2013 by activist hedge fund magnate Carl Icahn. The spin-off was completed on July 18, 2015. Dan Schulman is the current president and CEO, with former eBay CEO John Donahoe serving as chairman. On January 31, 2018, eBay announced that "After the existing eBay-PayPal agreement ends in 2020, PayPal will remain a payment option for shoppers on eBay, but it won't be prominently featured ahead of debit and credit card options as it is today. PayPal will cease to process card payments for eBay at that time." The company will "instead begin working with Amsterdam-based Adyen".

On July 1, 2015, PayPal announced that it was acquiring digital money transfer company Xoom Corporation. PayPal spent $25 a share in cash to acquire the publicly traded Xoom, or about $1.09 billion. The deal was closed in the fourth quarter of 2015. The move strengthened PayPal’s international business, giving it access to Xoom’s 1.3 million active U.S. customers that sent about $7 billion in the 12 months ending on March 31, to people in 37 countries.

On September 1, 2015, PayPal launched their peer-to-peer payment platform "PayPal.Me", a service that allows users to send a custom link to request funds via text, email, or other messaging platforms. Custom links are set to be structured as PayPal.me/username/amountrequested. PayPal.Me was launched in 18 countries including the United States, United Kingdom, Germany, Australia, Canada, Russia, Turkey, France, Italy, Spain, Poland, Sweden, Belgium, Norway, Denmark, Netherlands, Austria and Switzerland. PayPal had 170 million users, as of September 2015, and the focus of PayPal.Me was to create a mobile-first user experience that enables faster payment sharing than PayPal's traditional tools.

On May 17, 2018, PayPal agreed to purchase Swedish payment processor iZettle for $2.2 billion. This was PayPal's largest acquisition until late November 2019 and the company claims that it is the in-store expertise and digital marketing strength that will complement its own online and mobile payment services.

On March 19, 2019, PayPal announced their partnership with Instagram as part of the company's new checkout feature, "Checkout on Instagram".

In June 2019, PayPal reported that Chief Operating Officer Bill Ready would be leaving the company at the end of the year. In December 2019, Google announced that Ready would become the new commerce chief.

On January 6, 2020, PayPal acquired Honey for over $4 billion. This is PayPal's largest acquisition to date, and its most recent. It more recently signed a deal with NBCUniversal.

Acquisitionsedit

Acquisition date	Company	Price	Refs
Jan 28, 2008	Fraud Sciences	$169M
Oct 6, 2008	Bill Me Later	$945M
Apr 20, 2011	Where.com	$135M
Apr 28, 2011	FigCard	—
Oct 15, 2011	Zong	$240M
Jul 17, 2012	card.io	—
Apr 11, 2013	IronPearl	—
Sep 26, 2013	Braintree	$800M
Sep 26, 2013	Venmo	$26.2M
Dec 17, 2013	StackMob	—
Mar 2, 2015	Paydiant	$280M
Mar 5, 2015	CyActive	$60M
Jul 2, 2015	Xoom Corporation	$890M
Aug 19, 2015	Modest Inc	—
Feb 14, 2017	TIO Networks	$233M
Aug 10, 2017	Swift Financial	—
May 29, 2018	Jetlore	—
May 17, 2018	iZettle	$2.2B
June 19, 2018	Hyperwallet	$400M
June 22, 2018	Simility	$120M
Sept 30, 2019	GoPay	undisclosed (70% stake)
Nov 20, 2019	Honey	$4B