PayPal

PayPal Holdings, Inc. is an American multinational financial technology company. It helps people and businesses send and receive money online. PayPal offers an electronic way to pay and get paid instead of using traditional paper methods like checks and money orders. Many online shops, auction sites, and other companies use PayPal to process their payments.

The company started in 1998 as Confinity. It went public through an IPO in 2002. That same year, it became part of eBay. In 2015, eBay separated PayPal, and it became its own company again. By 2022, PayPal was ranked 143rd on the Fortune 500 list of the largest U.S. companies based on revenue. Since 2023, PayPal has been part of the MACH Alliance.

History

For a chronological guide, see Timeline of PayPal.

Early history

The company started in December 1998 by Max Levchin, Peter Thiel, and Luke Nosek as Fieldlink. It was later renamed Confinity, which made security software for handheld devices. When this didn’t work well, they changed to focus on digital wallets. The first PayPal system for online payments began in 1999.

In March 2000, Confinity merged with X.com, an online financial service started by Elon Musk and others in 1999. Musk believed strongly in the money transfer business Confinity was building. However, he and Bill Harris, then-president and CEO of X.com, disagreed about this, and Harris left in May 2000. By October, Musk decided X.com would stop other banking services and focus only on payments. That same month, Musk was replaced by Peter Thiel as CEO of X.com, which became PayPal in June 2001. PayPal went public in 2002. Its IPO was on NASDAQ under the ticker PYPL at $13 per share.

eBay subsidiary (2002–2014)

Shortly after going public, eBay bought PayPal on October 3, 2002. PayPal became very popular on eBay, and many users chose it as their main way to pay. It competed with other payment services like eBay’s Billpoint, Citibank’s c2it, Yahoo!’s PayDirect, and Google Checkout.

PayPal made several changes over the years. In 2005, it bought a security service from VeriSign. In 2007, it worked with MasterCard to let people pay online even if a website didn’t support PayPal directly. By the end of 2007, PayPal made $1.8 billion in sales. In 2008, it bought two more companies: Fraud Sciences and Bill Me Later.

By 2010, PayPal had over 100 million users in 190 countries. In 2011, some people tried to stop PayPal’s work online.

PayPal kept growing its services for sellers. In 2011, it began helping people pay in stores, not just online. In 2012, it worked with Discover Card so people could use PayPal at millions of stores. By the end of 2012, PayPal handled $145 billion in payments.

In 2013, PayPal bought two companies: IronPearl, a startup from Palo Alto, and Braintree, a Chicago-based payment service. In 2014, David Marcus left as PayPal’s president and was replaced by Dan Schulman.

Spin-off from eBay (2014–present)

In September 2014, eBay said it would separate PayPal into its own company, which happened on July 18, 2015. PayPal returned to Nasdaq under the same name, PYPL. In January 2018, eBay said that after 2020, PayPal would still be an option on eBay but would not be shown as the main payment method. Instead, eBay would work with Amsterdam-based Adyen.

In July 2015, PayPal bought Xoom Corporation for about $1.09 billion. This helped PayPal grow in international markets. In September 2015, PayPal started “PayPal.Me,” a way for people to ask for money using a special link. It launched in 18 countries.

In May 2018, PayPal bought iZettle for $2.2 billion to improve its services for payments in stores. In 2018, it also became a sponsor for the Phoenix Suns. In March 2019, PayPal worked with Instagram to let people check out directly on Instagram.

In January 2020, it bought Honey for over $4 billion. In January 2021, PayPal became the first foreign company to fully run its own payment system in China. In June 2022, Shopify worked with PayPal to offer payments to sellers in France. In February 2023, PayPal cut 2,000 jobs. In August 2023, it introduced a new kind of digital money called PayPal USD (PYUSD). In November 2023, PayPal sold its Happy Returns service to UPS.

In 2024, PayPal planned to grow its payment services again. In January 2026, it bought Cymbio, a company that works with artificial intelligence. In February 2026, Enrique Lores became the new CEO of PayPal.

Acquisitions

Finances

PayPal's fiscal year runs from January 1 to December 31. In 2019, the company made a lot of money and its shares were worth over $108 each.

The COVID-19 pandemic helped digital payment services like PayPal grow faster than traditional banks. Because of this, PayPal's stock price rose a lot by October 2020, and the total amount of money processed reached $220 billion. During the pandemic years of 2020 to 2022, PayPal also reduced its workforce in the United States and moved some jobs to other countries.

Services

PayPal helps people send and receive money online. You can use it to pay for things on websites like eBay, buy or sell items, or give and receive donations. You don’t need a PayPal account for all services, but an account lets you do more. PayPal can change money between different currencies and has a mobile app through the iTunes App Store and Google Play.

Over time, PayPal added new features. It now offers PayPal Credit, which works like a credit card for online shopping. PayPal also helps businesses accept payments and lets people use cryptocurrencies to shop in many places. PayPal works in many countries and has millions of users.

Business model evolution

PayPal grew in three steps. First, it helped people buy and sell on eBay. Then, it worked with people and businesses worldwide. Finally, PayPal started working with many websites so people can pay online almost anywhere.

Global reach

PayPal can be used in over 200 countries and regions. Some places only allow certain payments, while others let people send, receive, and hold money in different currencies. PayPal has special rules in many countries to make sure it works well for everyone.

PayPal Giving Fund

PayPal Giving Fund makes it easy to donate money to charities.

PayPal World

In July 2025, PayPal announced "PayPal World," a new way to connect payment systems in different countries, starting with partners in India, Brazil, and China.

Advertising

In 2024, PayPal debit cards could be added to Apple Wallets. This was part of their biggest advertising campaign so far. A commercial featuring Will Ferrell singing a changed version of Fleetwood Mac's "Everywhere" aired before the first ESPN broadcast of Monday Night Football that season. In 2025, Ferrell appeared in another ad campaign using a changed version of Fleetwood Mac's "Go Your Own Way."

Regulation

PayPal follows rules to keep money safe in different countries. In the United States, PayPal has special permission to move money between people, but the rules can change depending on the state. Even though PayPal is not a bank, it still follows important financial rules to protect customers.

In Europe, PayPal Europe has a banking license from Luxembourg. This lets it work in all European Union countries with strong banking oversight. In India, PayPal cannot send money across borders, unlike its service PaisaPay, which lets people pay Indian sellers on eBay. In Australia, PayPal has permission to handle money and follows local banking laws. In Singapore, PayPal operates under a stored value facility without needing extra approval from the Monetary Authority of Singapore.

Safety and protection policies

PayPal has rules to help buyers and sellers feel safe. Buyers can ask for help if they didn’t get an item or if it’s not what they expected. They need to start this within 180 days of paying and can turn it into a claim within 20 days.

Sellers get some protection too, but only if they meet certain rules, like proving they sent the item.

Security token

Main article: Security token

In 2006, PayPal added a way to make accounts safer. Users could add a special key or get a code on their phone when they log in. This makes it harder for someone else to use their account.

MTAN

Users can also get a special code on their phone to help keep their account safe. This is free and works by getting a message on a mobile phone.

Fraud

PayPal had to deal with people trying to cheat the system online, especially from other countries. They made tools to find and stop these unfair actions.

In 2015, many people in Spain had their money frozen for a short time because of worries about unfair business practices.

On December 21, 2024, a video showed how a tool called Honey, which helps find deals while shopping online, was taking money from creators who promote products. Normally, when a creator shares a special link for a product, they get paid if someone buys using that link. But Honey would remove the creator's link and use its own, so the creator didn’t get paid for sales they helped make. Honey also sometimes showed smaller discounts instead of better ones users might find online.

Criticism and controversies

See also: Criticism of eBay

In 2003, PayPal stopped working with websites that dealt with online gambling. Later, in 2010, PayPal started working with these websites again, but only in countries where it was allowed and where the websites had the right licenses.

PayPal has rules about what can be paid for using their service. These rules have sometimes caused problems for people and groups. For example, PayPal has stopped working with some websites and accounts that did not follow these rules. This has led to public debates.

Some people have had their PayPal accounts frozen or closed, even when they believed they did nothing wrong. This has happened to many people and groups over the years, causing frustration. PayPal has sometimes apologized and fixed these issues later.

Litigation

In 2002, two PayPal users sued the company for not following rules about money and disagreements. The lawsuits were combined, and in 2004, PayPal agreed to change some of its practices and pay $9.25 million, though they said they did nothing wrong.

Later, other companies and users also sued PayPal over different issues, like not keeping promises or freezing money in accounts for too long. In some cases, PayPal changed how it did things to settle these lawsuits.

In 2015, PayPal agreed to pay a fine and refund money after being accused of signing people up for credit accounts without their permission.