PayPal facts for kids
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Headquarters in San Jose, California, U.S.
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| Public | |
| Traded as |
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| Industry | Financial technology |
| Predecessors |
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| Founded |
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| Founders |
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| Headquarters | San Jose, California, U.S. |
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Area served
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Almost worldwide |
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Key people
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| Products | Credit cards, payment systems |
| Revenue |  US$29.77 billion (2023) |
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Operating income
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US$5.028 billion (2023) |
| US$4.246 billion (2023) |
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| Total assets | US$82.17 billion (2023) |
| Total equity | US$21.05 billion (2023) |
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Number of employees
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27,200 (2023) |
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| Subsidiaries |
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PayPal Holdings, Inc. is an American company that helps people send and receive money online. It's like a digital wallet that lets you pay for things on the internet. PayPal is a popular choice for online shopping and other money transfers. It offers an electronic way to pay, instead of using old methods like paper checks.
The company started in 1998 as Confinity. It became a public company in 2002, meaning its shares could be bought and sold. Later that year, eBay bought PayPal for $1.5 billion. In 2015, PayPal became an independent company again. It is now one of the largest companies in the United States.
Contents
How PayPal Started
PayPal was first created in December 1998. It was called Confinity and was started by Max Levchin, Peter Thiel, and Luke Nosek. They first tried to make security software for hand-held devices. But that didn't work out, so they changed their focus to a digital wallet. The first version of PayPal's payment system was launched in 1999.
In March 2000, Confinity joined with X.com. X.com was an online financial company started by Elon Musk and others. Elon Musk believed strongly in the money transfer idea. In October 2000, X.com decided to focus only on payments. The company was renamed PayPal in June 2001. It became a public company in 2002, raising over $61 million.
PayPal and eBay
After PayPal became public, eBay bought it on October 3, 2002. eBay paid $1.5 billion for PayPal. At that time, most eBay auctions accepted PayPal payments. About one in four eBay sales used PayPal. It quickly became the main way people paid on eBay.
In 2005, PayPal bought VeriSign's payment solution to make payments more secure. In 2007, PayPal worked with MasterCard. This led to the PayPal Secure Card service. This software let customers pay on websites that didn't directly accept PayPal. By the end of 2007, PayPal made $1.8 billion in revenue.
PayPal bought Fraud Sciences in 2008 for $169 million. This company created tools to help prevent online risks. In November 2008, PayPal also bought Bill Me Later. This was an online credit company.
By 2010, PayPal had over 100 million active users. These users were in 190 different markets and used 25 different currencies. PayPal also started letting customers pay in stores. This meant people could use PayPal even when shopping offline.
In August 2012, PayPal partnered with Discover Card. This allowed PayPal payments at millions of stores in the Discover network. By the end of 2012, PayPal processed $145 billion in payments. This made up 40% of eBay's revenue.
In 2013, PayPal bought IronPearl and Braintree. These purchases helped PayPal improve its products and mobile services. In 2014, Dan Schulman became the new president of PayPal.
Becoming Independent Again
On September 30, 2014, eBay announced that PayPal would become a separate company. This change happened on July 18, 2015. PayPal became an independent public company once more. Dan Schulman is now the president and CEO. John Donahoe, the former eBay CEO, is the chairman.
In 2015, PayPal bought Xoom Corporation, a company that transfers money digitally. This deal helped PayPal grow its international business. It gave PayPal access to Xoom's 1.3 million customers in the U.S. These customers sent about $7 billion to people in 37 countries.
On September 1, 2015, PayPal launched "PayPal.Me". This service lets users send a special link to ask for money. You can share the link by text, email, or other messages. This made it easier and faster to share payments, especially on mobile phones.
In May 2018, PayPal bought iZettle for $2.2 billion. iZettle is a Swedish company that processes payments. This was PayPal's biggest purchase at the time. It helped PayPal offer more services for in-store and mobile payments.
In March 2019, PayPal partnered with Instagram. This was for Instagram's new "Checkout on Instagram" feature. In January 2020, PayPal bought Honey for over $4 billion. This is PayPal's largest purchase to date.
In June 2020, PayPal promised $530 million to support businesses owned by Black people and minority communities in the U.S. In January 2021, PayPal became the first foreign company to fully control a payment platform in China. This gave it a strong position in the Chinese online payment market.
In February 2023, PayPal announced it would reduce its workforce by 2,000 employees. Later that year, CEO Dan Schulman announced he would step down. In August 2023, Alex Chriss was named the new CEO.
In August 2023, PayPal launched a new digital currency called PayPal USD (PYUSD). It is a stablecoin linked to the U.S. dollar. This allows for new ways to make payments and transfers.
PayPal's Growth
PayPal's growth came from a three-step plan. First, PayPal focused on growing its service among eBay users in the U.S. Second, it expanded PayPal to eBay's international websites. Third, it started to build PayPal's business outside of eBay.
Early Growth on eBay
In the beginning, most payments came from eBay auctions. PayPal was very helpful for auction sellers, especially individuals and small businesses. Many of them couldn't accept credit cards directly. Buyers also liked PayPal because they could pay with credit cards or bank accounts without sharing their card numbers with sellers. PayPal even gave new users $10 to encourage them to join.
Expanding Beyond eBay
After growing on eBay, PayPal started to focus on businesses outside of eBay. In 2003, they created a new team called Merchant Services. This team helped online stores and businesses that were not part of the eBay auction community.
PayPal lowered its fees for businesses that processed a lot of payments. They also encouraged users to tell other businesses about PayPal. They worked with credit card companies to include PayPal as a payment option. PayPal also hired sales teams to work with big companies like Dell and Apple's iTunes. They even launched PayPal Mobile, which let users pay with their cell phones.
Where PayPal Operates
PayPal can be used in more than 200 countries and regions around the world. Different countries have different rules for how PayPal can be used. Some countries allow sending money only. Others allow sending, receiving, and holding money in your PayPal account. Some even let you use your local currency.
For example, in India, PayPal changed its rules to follow local banking laws. It now supports the domestic card system RuPay. In March 2022, PayPal stopped all activities in Russia. But in Ukraine, PayPal expanded its services to allow users to send and receive money from friends and family.
In 2018, PayPal worked with Safaricom in Kenya. This allowed Kenyans to use MPESA, a mobile money service, with PayPal. In Indonesia, PayPal was temporarily blocked in 2022 due to local rules. But it was unblocked after registering with the authorities.
How PayPal Works
PayPal lets people make payments online. You can send or receive money for online auctions, buy or sell goods, or donate money. You don't always need a PayPal account to use its services. Some packages you buy might even come with tracking numbers. You can also change the currency in your PayPal account settings.
The PayPal app is available for phones and tablets. After buying Braintree, PayPal launched "One Touch." This service lets you pay with just one tap on websites or apps that accept it.
PayPal also offers "PayPal Credit." This is like an online credit line that you can use at thousands of stores that accept PayPal. It lets you shop online similar to how you would with a traditional credit card.
In 2012, PayPal launched "PayPal Here." This is a mobile payment system for small businesses. It includes a free app and a small card-reader that plugs into a smartphone.
In 2020, PayPal announced a new service. It allows customers to use digital currencies like Bitcoin to shop at millions of stores. PayPal works with Paxos Trust to handle these digital currency transactions safely.
As of 2022, PayPal has 426 million active accounts. It lets customers send, receive, and hold money in 25 different currencies worldwide.
Keeping Your Money Safe
PayPal uses different ways to keep your money and information safe.
Security Features
In 2006, PayPal added an optional security key. This is an extra step to prevent fraud. When you log in, you enter your username and password. Then, you enter a special six-digit code. This code comes from a small device or a text message sent to your phone. This makes it harder for someone to get into your account without having your security key or phone.
You can also get a Mobile Transaction Authentication Number (mTAN) by text message. Using this security code sent to your phone is free.
Protecting Buyers and Sellers
PayPal has a Buyer Protection Policy. This means if you don't receive an item you bought, or if it's very different from what was described, you can file a complaint. You have 180 days from the payment date to start a dispute.
PayPal also has a Seller Protection Policy. This helps protect sellers from certain types of complaints or chargebacks. For example, if a buyer claims they didn't authorize a payment or didn't receive an item, the seller might be protected. To be protected, sellers usually need to show proof that they delivered the item to the buyer.
Marketing and Partnerships
PayPal uses different ways to tell people about its services. You might see PayPal ads on TV, outdoors, on Facebook, or other websites.
PayPal also helps businesses with free information. It gives them details about how customers use online payments. This helps businesses understand their customers better.
PayPal works with Synchrony Financial to offer the PayPal Cashback Mastercard. This card gives customers 2% cash back when they use it to buy things online or in stores. This encourages more people to use PayPal.
Apple also lets you use PayPal to pay for things. You can use PayPal in the App Store, Apple Music, iTunes, and Apple Books. This makes it easier for Apple users to pay and helps PayPal reach more customers.
About PayPal Giving Fund
PayPal Giving Fund is a special charity supported by PayPal. It makes it easier for people to donate money to non-profit organizations.
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PayPal Operations Center in La Vista, Nebraska
