Negosentro.com | PayPal: The Long Road From 1998 to Today | In the world of ecommerce, PayPal is nothing short of a household name. You would be hard-pressed to find any online shop or service that doesn’t accept PayPal payments. It’s truly a giant among its competitors.
How gigantic is it though? Well, this number should give you some perspective. PayPal enjoyed 450 million mobile users from India in late 2019. It also has well over 3,000 employees there, with plans to hire more.
That’s some impressive stuff. But how did PayPal get here? As it turns out, it was a long road for the digital payment cornerstone that we all know and love today — one paved with success no less.
PayPal’s Early Years
PayPal’s journey started in 1998, in Mountain View, California (where its headquarters remain to this day), but under a different name. Entrepreneurs Max Levchin and Peter Thiel initially founded the company under the name Confinity, and it wasn’t until two years later that the brand renamed to the all-too-familiar PayPal upon merging with another site — X.com.
The driving vision of this company was to provide easy, affordable digital payments for individuals and corporations alike. At the time, the online banking and payment market was minuscule compared to today, making Confinity’s strategy to cater to a market bereft of competition a wise one.
And the pitch was pretty convincing, too. Customers only had to share their banking and credit information, in addition to their emails, and they could make low-cost, quick payments. Suffice it to say, tons of people were eager to get on board.
The company quickly got a pretty sweet gig going on. Three years after its founding, an excess of 10 million users entrusted their payments to this rising star. At the time, that accounted for as much as $3 billion in circulation.
A major contributor to PayPal’s success was the way it managed to tap into unexploited markets. We already touched on the fact that its Internet-centered angle played a large role in that (even though it wasn’t the company’s central mission at first). But a more specific perk that PayPal offered was its ability to provide an easy cash flow between customers with businesses.
Hardly anyone was tilling this field back then, leaving the door wide open for PayPal. The standard e-store procedure was to accept cash and checks through the US Postal Service. The company basically carved out a guaranteed spot at the very top of this market for years to come.
PayPal’s Skyward Trajectory
Since 2002, PayPal has been on an upward incline. That year, in February, it became a publicly-traded company, hitting almost 55% in stocks — the best gains of any new company that year.
Given how much of a name it was making for itself, PayPal quickly caught the eyes of other players on the scene. Namely, eBay took a shine to how it was doing business and decided to purchase it. The multinational e-commerce corporation acquired PayPal for a hefty $1.5 billion in October 2002. PayPal remained a part of eBay for over a decade, with the two officially parting ways in 2015.
The merger proved to be of great benefit to both parties. In February of 2006, PayPal celebrated a major touchstone in its history: reaching 100 million user accounts. Not only that, but it also launched a mobile platform to enable cell phone payments that same year. Things were clearly going well for the company.
In the years that followed, PayPal was still going strong. The 150-million-users benchmark was just around the corner come 2008. Later, in 2013, it acquired Braintree Systems — a payment gateway company — for $800 million.
But 2014 was truly a major year for PayPal. A storm was brewing among shareholders discussing the fate of the company, particularly the eBay part. One person, in particular, was adamant to separate the two: Carl Icahn, a pivotal shareholder and Wall Street provocateur.
Icahn eventually got his way. PayPal split from eBay a year later, returning to its status as a publicly-traded company. It had a fairly successful return, too. The very same day it returned, it raked in a mind-boggling value of $49 billion.
PayPal Today
By this point, the last shred of doubt that PayPal would lose relevance any time soon was thoroughly extinguished. It bought a digital money transfer firm called Xoom to accelerate international payments. Its subsidiary, Venmo, hit a record $1 billion in payments in a single month a year later in 2016. It even dipped its toes in the P2P market with its very own peer-to-peer payment system.
By getting into cryptocurrency, blockchain, and more, PayPal has been fortifying its place as the top dog each year. And with a growing presence in India and its emerging payment tech scene, in addition to its dealings with UBER and Facebook, the company will be staying at the top of its game for a very long time.
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