PayPal

PayPal Holdings, Inc. is an American multinational financial technology company operating an online payments system in the majority of countries that support online money transfers; it serves as an electronic alternative to traditional paper methods such as checks and money orders. The company operates as a payment processor for online vendors, auction sites and many other commercial and company users.

Established in 1998 as Confinity, PayPal went public through an IPO 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 its shareholders, and PayPal became an independent company again. The company was ranked 143rd on the 2022 Fortune 500 of the largest United States corporations by revenue. Since 2023, PayPal is a member of the MACH Alliance.

The company was originally established by Max Levchin, Peter Thiel, and Luke Nosek in December 1998 as Fieldlink. Later it was renamed Confinity, a company which developed security software for hand-held devices. When it had no success with that business model, it 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 financial services company founded in March 1999 by Elon Musk, Harris Fricker, Christopher Payne, and Ed Ho. Musk was optimistic about the future success of the money transfer business Confinity was developing. Musk and Bill Harris, then-president and CEO of the combined 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 payments. In the same month, Elon Musk was replaced by Peter Thiel as CEO of X.com, which was renamed PayPal in June 2001 and went public in 2002. PayPal's IPO listed on NASDAQ under the ticker PYPL at $13 per share and generated over $61 million.

Shortly after PayPal's IPO, eBay acquired the company on October 3, 2002, for $1.5 billion in eBay stock. 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 5 December 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 seven million stores in the Discover network. By the end of 2012, PayPal's total payment volume processed was US$145 billion. and accounted for 40% of eBay's revenue, amounting to US$1.37 billion in the 3rd quarter of 2012.