PayPal in its various incarnations is almost 18 years old. Today, it operates in 203 countries and under 26 different currencies. How did consumers come to use the service as they know it today?Mere weeks after Peter Thiel and Max Levchin met in the autumn of 1998, they had the concept of an early ‘digital wallet’, or some security software provider, for hand held devices used to make financial transactions between businesses. Under their Fieldlink brand, the company served as a secure cryptography service (allowing the storage of encrypted data) on Palm Pilots and other PDA devices, which used it as a money transfer resource.
The pair, along with Luke Nosek, soon devised Confinity, invested in by Nokia Ventures and the founder of Cybercash, by December of that year. In 1999 Confinity launched its PayPal product. The world was introduced to payments that could be made by email. Confinity would later merge with Elon Musk’s X.com, an online banking company, in 2000 – and the brand then went under the X.com name. The move was catalysed by Musk’s disagreement with his former partner Bill Harris over the future of the type of service Confinity were providing. But Musk saw a potential market, began pruning back his company’s other internet banking services and focusing on PayPal. Consumers deemed the name too nondescript or too suggestive a name and the product had to be rebranded under the name PayPal. The brand change was completed by early 2001.
In February 2002, the service was made public to investors at $13 a share, and its stock market launch saw over 60 million dollars generated, then acquisition by Ebay for $1.5 billion. In its first year, PayPal had a nearly 55% rocket in stock on NASDAQ, and hit a stock high of $22.44.
So what was the eventual split from Ebay about? Carl Ichan, an activist hedge fund manager and the main shareholder in PayPal, demanded that the company be separated into two different publicly traded bodies. He then sold his stake in Ebay after the move was completed in July 2015.
It is today used by hundreds of thousands of businesses as a secure digital payment intermediary, and now a rival mobile wallet provider to Google, which was launched the same year. PayPal is available in most countries around the world. With the rising popularity of paid media (subscriptions, e-books) and gaming resources, PayPal has had to evolve as a digital wallet solution in order to support providers like Betway. With lots of online casino games and bonuses it needs secure encryption of millions of account holders’ details as well as timely processing of funds.
PayPal.me is the company’s peer-to-peer feature, allowing custom links to be sent via texts and other messaging formats to request funds. Launched in 2015 with a view to mobile-user orientated interface, it so far stretches across 18 countries. As of June 2016, PayPal had announced it had joined the Fortune 500 for the first time coming in at no. 307 and shows no signs of slowing down since its split from Ebay.