PayPal’s History and Success Is No Secret
PayPal’s history and success Is no secret, and you’ve most likely seen it everywhere when doing an online transaction.
Bank accounts, credit and debit cards can all be linked to it for convenience, and it is majorly used by hundreds of millions of people. How did it get so big? We’re going to find out.
At present, PayPal is one of the big dogs when it comes to a world-wide payment system. Originally, PayPal’s history, which is fairly straightforward, began when it was established in 1998 under the name Confinity by Max Levchin, Peter Thiel, Ken Howery and Luke Nosek. Confinity went on to merge with X.com. X.com was an online banking company that was part of the Elon Musk chain. Musk believed so heavily in the future of the service, that X.com was renamed PayPal in 2001. When PayPal had its IPO in 2002, it was quickly snatched up by Ebay.
The statistics on Ebay quickly proved Elon Musk’s faith was well founded, with one in four auctions being transacted via PayPal. It became the payment method used by the majority of Ebay’s users. By 2010, PayPal had over one hundred million active users, and was generating well over sixteen billion dollars per year. It also spun off into several more successful leaps and steps, such as acquiring VeriSign in 2005, and partnering with MasterCard in a move that led to the development of the PayPal Secured Card Service to help step around any sites that didn’t use PayPal.
In 2008, PayPal took a step towards better security with its acquisition of Fraud Sciences. The idea behind this being a smart step towards fraud management in general, as fraud was growing problem as ecommerce in general grew. Once again, PayPal was on the offense when it came to innovation.
Like most companies, however, they have had their down turns. In July 2011, the notorious Anonymous hacktivist group were charged with trying to disrupt PayPal. Earlier the previous year, in December 2010, PayPal experienced the denial of service attacks when they stopped processing donations to Wikileaks. It would be three years later when thirteen of the PayPal 14 plead guilty to misdemeanor and felony charges concerning the attacks.
PayPal also experienced quite a few issues when it came to fraud, losing millions of dollars to it per month and attempts to coordinate with the FBI on cases of international fraud proving difficult. In response, they introduced a private fraud monitoring system that used AI (artificial intelligence) to monitor for potentially fraudulent transactions.
Regardless, PayPal continued to focus on international and corporate growth, going through the acquisition of several companies such as Xoom Corporation, as well as launching the peer-to-peer payment platform PayPal.Me. The latter platform filled an interesting niche –there had been a significant lack of any kind of peer-to-peer payment system beforehand, and with the introduction of PayPal.Me, smaller entities, and individuals now had a platform to be paid, and pay for, work provided.
PayPal continues to grow to this day. It is constantly innovating in its growth and in services it provides, as well as security. While some are still weary of it, the statistics do not lie in how much use the site sees per month.
Where does PayPal’s success come from? It was on the forefront of online transactions, and on peer-to-peer transactions, for one. Its’ continued innovation and growth has proven to keep it in vast use. It has clearly paid its dues to get where it is today, and is sure to continue growing far into the future.
Article by Amber Coyler