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PayPal Interesting Key Facts
PayPal was first established as Confinity in 1998 by Max Levchin, Peter Thiel, and Luke Nosek. It was a company that developed security software for hand held devices. Failing with that venture, the founders decided to switched into digital wallet.
Confinity converged with X.com, an online financial services company wherein Elon Musk was a cofounder of. Thus, PayPal was born.
Elon Musk was optimistic about Confinity’s potential to be a successful electronic payment system. He then proceeded to terminate all of X.com’s internet banking operations and focus on PayPal.
In 2002, PayPal was acquired by eBay for $1.5 billion in stock of which Elon Musk was the largest shareholder with 11.72% of shares and received $175.8 million.
Elon Musk used the PayPal money to build SpaceX.
After eBay bought PayPal. A group was formed by former PayPal employees and founders - The PayPal Mafia.
Members of this group would then create and develop other technologies and companies such as Tesla Inc, Linkedin, Affirm, Palantil Technologies, YouTube, Kiva, Slide, SpaceX, Square, Yammer and Yelp.
The members of the PayPal Mafia are considered by many as the main people who put Silicon Valley in the map to be one of the greatest technology hubs in the world.
PayPal was ranked 8th as America’s best employers in 2021.
PayPal is the most popular online payment system used in the United States.
PayPal has 26 acquisitions throughout the years from 2008 until their latest acquisition last September 2021.
Acquisition Date
Company
Price
Jan 28, 2008
Fraud Sciences
$169 million
Oct 6, 2008
Bill Me Later
$945 million
Apr 20, 2011
Where.com
$135 million
Apr 28, 2011
FigCard
—
Oct 15, 2011
Zong
$240 million
Jul 17, 2012
card.io
—
Apr 11, 2013
IronPearl
—
Sep 26, 2013
Braintee
$800 million
Sep 26, 2013
Venmo
$26.2 million
Dec 17, 2013
StackMob
—
Mar 2, 2015
Paydiant
$280 million
Mar 5, 2015
CyActive
$60 million
Jul 2, 2015
Xoom Corporation
$890 million
Aug 19, 2015
Modest Inc
—
Feb 14, 2017
TIO Networks
$233 million
Aug 10, 2017
Swift Financial
—
May 17, 2018
Jetlore
—
May 29, 2018
iZettle
$2.2 billion
June 19, 2018
Hyperwallet
$400 million
June 22, 2018
Simility
$120 million
Sept 30, 2019
GoPay
undisclosed (70% stake)
Nov 20, 2019
Honey
$4 billion
Mar 8, 2021
Curv
—
May 7, 2021
Chargehound
—
May 13, 2021
Happy Returns
—
Sep 8, 2021
Paidy
$2.7 billion
PayPal is one huge company, so it's pretty expectable for it to have acquired lots of companies. As you can see, 26 acquired companies can make a long list.
But as payment processing is a large domain, and since PayPal was started in 1999, you would expect a lot of acquisitions from a company at PayPal's level.
PayPal's most popular user age group is the 25-34 group, with almost 28% of the total users. Then, there's the 18-24 age group, covering 21.09% of the total users.
Note: These numbers are estimation from Similarweb and unofficial.
The 35-44 age group is not that far away from the second most popular one, as it covers 19.56% of PayPal's users.
Age Bracket
Percentage
18-24
21.09%
25-34
27.81%
35-44
19.56%
45-54
14.29%
55-64
9.90%
65+
7.36%
For a better view and understanding, this table shows you the precise numbers for each age bracket of people that are on PayPal.
PayPal processed a total payment volume of $1.36 trillion in 2022, a growth of 8.80% year-over-year compared to the processed total payment volume of $1.25 trillion in 2021.
Which industries are using PayPal Enterprise the most?
PayPal Enterprise is a function wherein the company helps businesses find active buyers, increase conversion across channels, and scale into new markets. Payments are discussed through PayPal sales team.
The table below shows us which industries are using PayPal Enterprise the most.
Thee Retail industry covers 24.80% of PayPal's usage. Then, there are the Professional Services, with 15.50%.
Industry
Percentage
Retail
24.80%
Professional Services
15.50%
Consumer Packaged Goods
14.60%
Communications
9.20%
Media
6.70%
Manufacturing
6.00%
Construction and Real Estate
5.70%
Distribution
5.60%
Banking and Financial Services
2.60%
Non Profit
1.70%
Looking at the table above and seeing all these different industries, you can see how there are really no boundaries for PayPal.
There's money to be made in both Retail, Media, and even Non Profit, so be assured that PayPal is always there as a payment processor.
As of 2022, PayPal has a market share of 52.45% in the online payment industry.
This really means that PayPal is pretty much over 50% of the online payment industry. As we've previously seen from PayPal's revenue and profits, this is a very large industry.
Therefore, seeing how PayPal is literally over half of the industry, we can try only and understand how big PayPal really is when it comes down to ePayments.
In phase 1, payment volumes are largely coming from eBay. Individuals and businesses without credit cards were very attracted to the system as they can have transactions in eBay without relying on credit cards.
In Phase 2, PayPal planned to earn interest through funds on papal accounts. However, most of the PayPal users would immediately withdrew their money.
To solve this problem, PayPal catered more to business accounts. PayPal started relying on earnings from its service charges rather on the interests from deposited funds.
In Phase 3, after increasing its domestic and international penetration on eBay, PayPal started their off-eBay strategy by adding users across multiple platforms, meaning they will expand more on different platforms other than eBay.
In 2003, Merchant Services was created within PayPal. This provided payment solutions to small and large e-commerce businesses outside eBay.
To sum it up, PayPal earns from its transaction fees, subscription fees for its premium features mainly offered to businesses, sales of card readers, referral fees on cashback rewards, interest on cash advance, business loans, interchange fees, and more.
The following subsections provides us with a detailed look on PayPal financials through the years. As of 2021, PayPal has a net profit margin of 16.43 with 4.6 earnings per share.
PayPal has net change in cash of $1.13 billion. A massive increase of net change in cash when compared to the -$11 million in 2021, that’s 1000x more than the current value.
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About the author
Ch Daniel is the co-founder of SignHouse and chairman of the CH Group. Daniel is leading the development of SignHouse's product, as well as strategising how else the company can reach its main mission: empowering 100M+ to use the world's most efficient document organisational tools.