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 for a time. As he would in the future, he zoned in on the vision of PayPal’s future and terminated all other operations that were deemed unnecessary.
That didn’t go down well with PayPal’s board members, who got rid of Musk in October 2000. He had been CEO for less than 12 months. The lack of faith from the board would sit with Musk during his next ventures, where he ensured he had complete control.
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 into every internet business, 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 retail giants like Walmart, but platforms either built their own solution or partnered with non-competitive 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. 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 billion and $4 billion, respectively. It has also launched PayPal Credit.
We have collected data and statistics on PayPal. Read on below to find out more.
PayPal key statistics
- PayPal generated $21.4 billion revenue in 2020, a 20.9 percent increase year-on-year
- PayPal also increased its net profit by 75 percent year-on-year, to $4.2 billion in 2020
- Over 15 billion transactions were completed in 2020 on PayPal, accounting for $936 billion in transaction volume
- 337 million users and merchants use PayPal
|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 (%)
|Year||Non-GAAP operating margin (%)|
PayPal transactions per account
|Year||Transaction 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|
How much did eBay acquired PayPal for?
eBay acquired PayPal for $1.2 billion in 2002 and spun out the company in 2015
How many online e-commerce users use PayPal?
87.5 percent of online buyers have used PayPal
How many PayPal users have activated One Touch?
80 million PayPal users have activated One Touch payments
What is the average amount in a PayPal account?
The average PayPal user has $485 in their account
What is PayPal’s largest acquisition?
PayPal’s largest acquisition is $4 billion for browser extension Honey (TechCrunch)