In the late 90s, paying for things online still had a stigma attached to it. There wasn’t any assurance that goods would be delivered or that faulty payments would be recovered. It was a wild west, and PayPal was one of the first payment solutions to try and civilise it.
PayPal was formed when two companies, Confinity and X.com, merged. Elon Musk, of Tesla and Space X fame, was CEO of this combined company. As he would in the future, he had a vision of what PayPal could be and terminated all other operations to focus on it.
That didn’t go down well with PayPal’s board members, who got rid of Musk in October 2000. Musk had been the CEO for less than 12 months. Due to the lack of trust by the board in his vision, he would ensure that he had full control over all decisions at his next businesses.
After Musk left, Peter Thiel took over as CEO as guided PayPal towards its 2002 IPO. PayPal provided its platform to all websites, but the bulk of its transactions were conducted on eBay. A few months after the IPO, eBay agreed to acquire PayPal for $1.5 billion.
For the next decade, PayPal coexisted inside eBay’s rather tumultuous world, in which the e-commerce platform tried to expand outward, acquiring Skype and a range of classified advertising networks.
In that time, PayPal spent $800 million to acquire Braintree and Venmo, bolstering its position as a provider of financial services. And as eBay started to feel the effects of a decade of muddled leadership, PayPal looked at a future beyond the e-commerce platform, but first it would need to separate.
In 2015, eBay announced it would spin out PayPal as a separate entity. Several major eBay shareholders pushed for the split, as they had with the Skype sale in 2009. eBay held a minority stake in the new company, but has since divested almost all shares in the company.
PayPal missed many opportunities that came with a growing network of e-commerce platforms struggling to make payments safe and secure. If not tied to eBay, PayPal may have partnered with Amazon, Alibaba and large retailers, but platforms either built their own or partnered with other affiliates.
If separate, it may have also been more influential in the growth of contactless payments. Google and Apple both built out their own systems, and PayPal has been effectively shut out of that market.
Still, PayPal has grown significantly since the break, almost doubling revenue and monthly active users. While it hasn’t tied down any major e-commerce platforms, it has integrated One Touch with over seven million merchants and Venmo continues to attract a younger generation of users.
PayPal has also made significant acquisitions in the past two years, in the form of iZettle and Honey, bought for $2.2 and $4 billion, respectively. It has also launched PayPal Credit.
We have collected data and statistics on PayPal revenue, profit and users. Read on below to find out more.
|Launch date||December 1998|
|HQ||San Jose, California|
|People||Dan Schulman (CEO, President), John Donahoe (Chairman)|
|Business type||Public (NASDAQ)|
PayPal Payment Volume
PayPal non-GAAP Operating Margin
PayPal Transactions Per Account
PayPal Merchant Accounts
|Braintree||Provides merchants with an account and gateway to process transactions online|
|Venmo||One of the most popular mobile peer-to-peer payment services in the United States|
|Xoom||Online facilitator of money and mobile transfers across the globe|
|iZettle||Supplier of chip card readers, also provides payments solutions for small businesses|
|Honey||A browser extension that aggregates e-commerce coupons and discounts|
PayPal other key stats
- PayPal generated $17.7 billion in revenue in 2019, a 14.4 percent year-on-year increase
- eBay acquired PayPal in 2002 for $1.2 billion, but spun out the company in 2015 (The Guardian)
- 87.5 percent of online buyers use PayPal
- 80 million PayPal users have signed up to One Touch
- PayPal has over 300 million active accounts, which transact 40 times on average per year
- It also has 24 million merchant accounts, seven million of which use PayPal One Touch
- Average PayPal user has $475 in their account
- PayPal is the third most preferred payment option, behind VISA and Mastercard (eWebMarketing)
- PayPal has a $500 million stake in Uber (TechCrunch)
- PayPal paid $4 billion for browser extension Honey, its largest acquisition to date (TechCrunch)