Today is a time where people can pay all their bills through their mobile phones. All they have to do is go online and find the right application and pay the bill. You can also order things online using e-commerce websites like Amazon or eBay. People can pay for these items using debit or credit cards. It is a similar situation with the banking system. If you want to transfer money to someone you can do it using an app that is specially designed for money transfers. But there is one thing that you cannot do using those applications that are transferring money to other countries. Even if you want to order something online from other countries you cannot always do it using your credit card. Because not all credit or debit cards are accepted internationally.
Earlier in the 20th century, international money transfers were done through wire transfers. People had to go to banks and give the money along with details of the recipient like name and bank account number to transfer the money. But it is nowhere near what we expect today from an international money transfer system. You still had to go to your bank to deposit the money. All of this changed when an online financial solution for international money transfer came into existence. That system is PayPal. PayPal is the first online payment system of its kind. It is a company that supports worldwide online money transfers. There are a lot of giant corporations and companies that use PayPal to transfer funds. Today PayPal is operating more than 200 markets around the world.
But still, people do not know who is the person who owns PayPal? And when was it launched? This article is exactly about that.
How did PayPal come into existence?
It was December of 1998 when Luke Nosek, Peter Theil, and Max Levchin established a company called Confinity. This company was founded to make security software for handheld devices. But the business did not see any success so they shifted their focus to digital wallets. After that in 1999, they launched the first version of PayPal which was an electronic payments system. Confinity was merged with X.com in March 2000. X.com is an online banking company founded by none other than Elon Musk. Before he was known for his internationally renowned private space agency Space X Elon Musk was an integral part of PayPal. When Elon Musk joined PayPal he was very optimistic about the success of PayPal in the future. But this was not the case with Bill Harris who was the president and CEO of X.com back then.
Due to the differences between him and Elon Musk regarding the success of the online money transfer system Bill Harris left the company. In October 2000 X.com decided to focus on PayPal putting an end to all of its other internet banking services. Also in the same month, Peter Theil replaced Elon Musk as the CEO of company X.com. It is 2001 when the company Confinity was renamed to PayPal. A year later the company went public and had its IPO. The ticker that used for PayPal in this public offering was PYPL and each share was sold for $13. This IPO of PayPal generated $61 million.
Timeline of PayPal after IPO
In October of 2002, the company was acquired by the e-commerce giant eBay for an unbelievable $1.5 billion. This was great for eBay as it had one more option to accept money. After its acquisition, more than 70% of all the auctions in eBay used to access payments through PayPal. PayPal had become the default payment option for most of the users on eBay. It acquired a payment solution called VeriSign in 2005 to improve security. PayPal announced a partnership with MasterCard in 2007. After this partnership, PayPal launched PayPal secure card service. This is software service enabled the customers to make payments on websites that did not allow payments through PayPal. That service was very successful and generated $1.8 billion dollar revenue by the end of 2007. PayPal acquired a private Israeli startup called Fraud Sciences in January 2008 for $169 million.
It did so to use the online risk tools to enhance PayPal’s fraud management system. In November of the same year, PayPal acquired an online transactional credit company called Bill Me Later. This company used to offers a credit more than 9000 online merchants in the US. PayPal was operating in 190 markets with 100 million users through 25 different currencies by 2010. PayPal focused on developing services for merchants using which provided e-payment options for US retailers. During this time PayPal was stuck in several controversies. Thirteen members of PayPal pleaded guilty for cyberattacks that were launched on PayPal. Carl Ichan demanded PayPal to become a public company in 2014 and that wish came true on September 30, 2014. The ownership of PayPal is organized through shares of stock. By then PayPal already spun off eBay and got a separate CEO.
Important companies that are owned by PayPal
PayPal does not have one owner but thousands of shareholders who stake in the company. It acquired a lot of companies over the years despite being a publicly-traded company. Some of them are:
This company was acquired by eBay when PayPal was a part of it. Braintree Chicago based company was acquired by eBay in 2013 for $800 million in cash. The acquisition of Braintree also included Venmo an application that offers peer-to-peer mobile payments.
Honey Science Corp
This company was purchased by PayPal on November 20, 2019. Honey is a browser extension application that automatically applies online discounts and coupons on e-commerce websites. This company which was founded in 2012 has more than 17 million users now. Since its release, it has saved more than $1 billion to its users. This was PayPal’s largest acquisition to date as the purchase cost it $4 billion.
PayPal acquired Xoom on November 12, 2018. It is an international payment processing company that allows users to pay bills, send money, and other things for people living in other countries. When PayPal acquired Xoom it already had 1.3 million active customers in the US.
Though PayPal does not have a specific owner it is still going strong. PayPal is one of the if not the most popular international money transfer system in the world today. Remember that the launch of PayPal has made international fund transfer way simple and efficient. If not for PayPal you might not have seen the development of different modes of online transfer, credit, and reception of amount.