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.

History

Early history

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.

eBay subsidiary (2002–2014)

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. and accounted for 40% of eBay's revenue, amounting to in the 3rd quarter of 2012.
In 2013, PayPal acquired IronPearl, a Palo Alto startup offering engagement software, and Braintree, a Chicago-based payment gateway, to further product development and mobile services. In June 2014 David Marcus announced he was leaving his role as PayPal President; Marcus joined PayPal in August 2011 after its acquisition of Zong, of which he was the founder and CEO. David Marcus succeeded Scott Thompson as president, who left the role to join Yahoo. PayPal announced that Marcus would be succeeded by Dan Schulman, who previously served as CEO of Virgin Mobile and Executive vice president of American Express.

Spin-off from eBay (2014–present)

It was announced on September 30, 2014, that eBay would spin off PayPal into a separate publicly traded company, a move demanded in 2013 by activist hedge fund magnate Carl Icahn. The spin-off was completed on July 18, 2015. On July 20, the company was relisted on Nasdaq under the same ticker symbol it used shortly before it was acquired by eBay, PYPL. On January 31, 2018, eBay announced "After the existing eBay-PayPal agreement ends in 2020, PayPal will remain a payment option for shoppers on eBay, but it won't be prominently featured ahead of debit and credit card options as it is today. PayPal will cease to process card payments for eBay at that time." The company will "instead begin working with Amsterdam-based Adyen".
On July 1, 2015, PayPal announced that it was acquiring digital money transfer company Xoom Corporation. PayPal spent $25 a share in cash to acquire the publicly traded Xoom, or about $1.09 billion. The deal was closed in the fourth quarter of 2015. The move strengthened PayPal’s international business, giving it access to Xoom’s 1.3 million active U.S. customers that spent about $7 billion in the 12 months ending on March 31, to people in 37 countries.
On September 1, 2015, PayPal launched its peer-to-peer payment platform "PayPal.Me", a service that allows users to send a custom link to request funds via text, email, or other messaging platforms. Custom links are set to be structured as PayPal.me/username/amount requested. PayPal.Me was launched in 18 countries including the United States, United Kingdom, Germany, Australia, Canada, Russia, Turkey, France, Italy, Spain, Poland, Sweden, Belgium, Norway, Denmark, Netherlands, Austria and Switzerland. PayPal had 170 million users, as of September 2015, and the focus of PayPal.Me was to create a mobile-first user experience that enables faster payment sharing than PayPal's traditional tools.
On May 17, 2018, PayPal agreed to purchase Swedish payment processor iZettle for $2.2 billion. This was PayPal's largest acquisition until late November 2019 and the company claims that it is the in-store expertise and digital marketing strength that will complement its own online and mobile payment services. In 2018, PayPal became a jersey patch sponsor of the Phoenix Suns. On March 19, 2019, PayPal announced its partnership with Instagram as part of the company's new checkout feature, "Checkout on Instagram". In June 2019, PayPal reported that Chief Operating Officer Bill Ready would be leaving the company at the end of the year, transitioning into the role of commerce chief for Google.
In October 2019, PayPal reported a loss of $228 million on investments, largely due to a failed return from a $500 million investment in Uber. On January 6, 2020, PayPal acquired Honey for over $4 billion. This is PayPal's largest acquisition to date. It more recently signed a deal with NBCUniversal. In June 2020, PayPal announced a $530 million commitment to support Black-owned businesses and minority communities in the United States.
In January 2021, PayPal became the first foreign operator with 100% control of a payment platform in China, gaining an advanced position in the local online payment market. In an international survey conducted in March 2021 by Morning Consult, PayPal was found to be the second most trusted brand globally. In June 2022, Shopify partnered with PayPal to offer Shopify Payments to merchants in France. In February 2023, PayPal announced layoffs for 2,000 of its workers, or 7% of its total workforce. It was reported in February 2023, that CEO Dan Schulman will step away from his role by the end of 2023. Schulman will continue to serve on the board of directors after vacating the position. In August 2023, the company named Intuit executive Alex Chriss CEO, effective September 27, 2023.
In August 2023, PayPal launched a U.S. dollar stablecoin, called PayPal USD for payments and transfers. In November 2023, it was announced that the SEC launched a legal investigation into both PayPal and Paxos, the trust responsible for issuing the stablecoin. PayPal said it was cooperating with the subpoena from the SEC’s Enforcement Division. In October 2023, it was announced PayPal has sold its reverse logistics subsidiary, Happy Returns to UPS for an undisclosed amount.
In 2024, PayPal executives announced the company's aim to revive growth in their branded checkout products amidst increased competition from big tech, following an upward revision of the full-year profit forecast.
In January 2026, PayPal announces the acquisition of Cymbio, an AI-specialized company enabling PayPal to expand into agentic AI.

Acquisitions

Finances

The fiscal year for PayPal is from January 1 to December 31. For fiscal year 2019, Paypal reported earnings of US$2.459 billion, with an annual revenue of $17.772 billion, an increase of 15% over the previous fiscal cycle. PayPal's shares traded at over $108 per share, and its market capitalization was valued at over $127.58 billion in December 2019.
YearRevenue
in million $		Net income
in million $		Total Assets
in million $		Price per Share
in $		Employees
20125,662778
20136,72795519,160
20148,02541921,917
20159,2481,22828,88116,800
201610,8421,40133,10339.4718,100
201713,0941,79540,77473.6218,700
201815,4512,05743,33284.0921,800
201917,7722,45951,333108.1723,200
202021,4544,20270,379234.2026,500
202125,3714,16975,803188.5830,900
202227,5182,41978,71771.2229,900
202329,7714,24682,16661.4127,200
202431,7974,14781,61124,400

The COVID-19 pandemic has accelerated the growth of digital payment platforms, including PayPal, at the expense of the traditional banking sector. As a result, Paypal has seen an increase in its stock to up to 78% in 2020 as of October. In addition, total payment volume has increased 29% amounting to $220 billion increasing positive investor sentiment.
PayPal laid off hundreds of workers across US offices and moved jobs overseas during 2020-2022 pandemic.