Services

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 November 2009, PayPal opened its platform, allowing other services to get access to its code and to use its infrastructure in order to enable peer-to-peer online transactions.

In 2007, PayPal acquired the online credit product Bill Me Later, Inc., which has since been rebranded as PayPal Credit and provided services for Comenity Capital Bank, the lender of PayPal Credit accounts. Founded in 2000, Bill Me Later is headquartered in Timonium, Maryland. PayPal Credit offers shoppers access to an instant online revolving line of credit at thousands of vendors that accept PayPal, subject to credit approval. PayPal Credit allows consumers to shop online in much the same way as they would with a traditional credit card. The rebranding of Bill Me Later as PayPal Credit also means that consumers can use PayPal Credit to fund transactions virtually anywhere PayPal is accepted. In 2015 PayPal agreed that PayPal Credit would pay a $25 million fine to settle a complaint filed in Federal Court by the Consumer Financial Protection Bureau.

The PayPal app is available online or at the iTunes App Store and Google Play. One year after acquiring Braintree, PayPal introduced its "One Touch" service, which allows users to pay with a one-touch option on participating merchants websites or apps.

On November 28, 2011, PayPal reported Black Friday brought record mobile engagement including a 538% increase in global mobile payment volume when compared with Black Friday 2010.

In 2012, the company launched "PayPal Here", a small business mobile payment system that includes a combination of a free mobile app and a small card-reader that plugs into a smart phone.

PayPal launched an updated app for iOS and Android in 2013 that expanded its mobile app capabilities by allowing users to search for local shops and restaurants that accept PayPal payments, order ahead at participating venues, and access their PayPal Credit accounts (formerly known as Bill Me Later).

On October 21, 2020, PayPal announced a new service allowing customers to use cryptocurrencies to shop at 26 million merchants on the network starting in 2021. As part of the announcement, PayPal secured the first conditional cryptocurrency license from the New York State Department of Financial Services, which will allow customers to purchase cryptocurrencies such as Bitcoin, Litecoin, Ethereum, and Bitcoin Cash.

Business model evolutionedit

PayPal's success in users and volumes was the product of a three-phase strategy described by former eBay CEO Meg Whitman: "First, PayPal focused on expanding its service among eBay users in the US. Second, we began expanding PayPal to eBay's international sites. And third, we started to build PayPal's business off eBay."

Phase 1edit

In the first phase, payment volumes were coming mostly from the eBay auction website. The system was very attractive to auction sellers, most of which were individuals or small businesses that were unable to accept credit cards, and for consumers as well. In fact, many sellers could not qualify for a credit card Merchant account because they lacked a commercial credit history. The service also appealed to auction buyers because they could fund PayPal accounts using credit cards or bank account balances, without divulging credit card numbers to unknown sellers. PayPal employed an aggressive marketing campaign to accelerate its growth, depositing $10 in new users' PayPal accounts.

Phase 2edit

Until 2000, PayPal's strategy was to earn interest on funds in PayPal accounts. However, most recipients of PayPal credits withdrew funds immediately. Also, a large majority of senders funded their payments using credit cards, which cost PayPal roughly 2% of payment value per transaction.citation needed

To solve this problem, PayPal tailored its product to cater more to business accounts. Instead of relying on interests earned from deposited funds, PayPal started relying on earnings from service charges. They offered seller protection to PayPal account holders, provided that they comply with reimbursement policies. For example, PayPal merchants are either required to retain a traceable proof of shipping to a confirmed address or to provide a signed receipt for items valued over $750.citation needed

Phase 3edit

After fine-tuning PayPal's business model and increasing its domestic and international penetration on eBay, PayPal started its off-eBay strategy. This was based on developing stronger growth in active users by adding users across multiple platforms, despite the slowdown in on-eBay growth and low-single-digit user growth on the eBay site. A late 2003 reorganization created a new business unit within PayPal—Merchant Services—to provide payment solutions to small and large e-commerce merchants outside the eBay auction community. Starting in the second half of 2004, PayPal Merchant Services unveiled several initiatives to enroll online merchants outside the eBay auction community, including:

• Lowering its transaction fee for high-volume merchants from 2.2% to 1.9% (while increasing the monthly transaction volume required to qualify for the lowest fee to $100,000)
• Encouraging its users to recruit non-eBay merchants by increasing its referral bonus to a maximum of $1,000 (versus the previous $100 cap)
• Persuading credit card gateway providers, including CyberSource and Retail Decisions USA, to include PayPal among their offerings to online merchants.
• Hiring a new sales force to acquire large merchants such as Dell, Apple's iTunes, and Yahoo! Stores, which hosted thousands of online merchants
• Reducing fees for online music purchases and other "micropayments"
• Launching PayPal Mobile, which allowed users to make payments using text messaging on their cell phones

Global reachedit

PayPal can be used in more than 200 countries/regions.

Different countries have different conditions: Send only (Package Service allows sending only, valid in 97 countries), PayPal Zero (package suggests the possibility of enrollment, entry, and withdrawal of funds in foreign currency, but the user can not hold the balance PayPal account, operates in 18 countries), 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) and Local Currency (SRW plus opportunity to conduct transactions in the local currency, 21 countries).

Chinaedit

In July 2017, PayPal announced a partnership with Baidu, to allow the Chinese firm’s 100 million mobile wallet users to make payments to PayPal’s 17 million merchants through the Baidu service.

Crimeaedit

In January 2015, PayPal ceased operations in Crimea in compliance with international sanctions against Russia and Crimea.

Indiaedit

As of March 2011, PayPal has made changes to the User Agreement for Indian users to comply with Reserve Bank of India regulations. The per transaction limit had been set to USD $3,000, since October 14, 2011. However, on July 29, 2013, PayPal increased the per transaction limit to USD $10,000. This brings the per transaction limit for India in line with the restrictions imposed by PayPal in most other countries.

PayPal has disabled sending and receiving personal payments in India, thus forcing all recipients to pay a transaction fee.

PayPal plans to make India an incubation center for the company's employee engagement policies. In 2012, PayPal hired 120 people for its offices in Chennai and Bengaluru.

On 8 November 2017, PayPal launched domestic operations under PayPal Payments Private Limited and now provides digital payment solutions for merchants and customers in India. As of 2020, Paypal supports the domestic card system RuPay and is planning to further integrate Unified Payment Interface (UPI) in collaboration with National Payments Corporation of India (NPCI). PayPal now has the largest global engineering team in India outside of US that is spread over Bengaluru, Chennai and Hyderabad.

Israel and Palestinian Territoriesedit

PayPal is available in Israel but is not available in the Palestinian territories. Nor can Palestinians working in the West Bank or Gaza access it but Israelis living in settlements in the West Bank can use PayPal. This discrepancy has prompted Palestinian tech companies to seek a policy change from PayPal.

Japanedit

In late March 2010, new Japanese banking regulations forced PayPal Japan to suspend the ability of personal account holders registered in Japan from sending or receiving money between individuals and as a result are now subject to PayPal's business fees on all transactions.

Pakistanedit

In Pakistan, users can use Xoom, a money transfer service owned by PayPal. In October 2018, Pakistan's government used Xoom to help crowdsource funds for the purpose of building two dams.

The government of Pakistan is trying to convince PayPal administration to launch its service in the country, but PayPal is not ready to introduce its services there.

Turkeyedit

Eight years after the company first started operating in the country, Paypal ceased operations in Turkey on 6 June 2016 when Turkish financial regulator BDDK denied it a payment license. The regulators had demanded that PayPal's data centers be located inside Turkey to facilitate compliance with government and court orders to block content and to generate tax revenue. PayPal said that the closure will affect tens of thousands of businesses and hundreds of thousands of consumers in Turkey.

Sri Lankaedit

In January 2017, PayPal team scheduled to visit Sri Lanka mid-January to re-establish links. As of 2020, PayPal doesn't operate in the country.

PayPal Giving Fundedit

PayPal Giving Fund is a registered charity supported by Paypal that streamlines donations to non-profit organizations.