PayPal: Making business
and consumer news

Keep an eye on these guys.

Keep an eye on these guys.

PayPal has been showing up quite a bit in the news lately, and not just in the business press. Consumers are well aware that PayPal nixed its plans to build a facility in North Carolina following Governor Pat McCrory’s signing of the Public Facilities Privacy and Securities Act. 

PayPal is making news in the trade press, too. PayPal One Touch, introduced last year, has 21 million and counting active users. As “One Touch” implies, users log in once and, from there, purchase with a single touch on a mobile device, laptop, or desktop computer. Increasingly, retail merchants like Macy’s and others are accepting One Touch as well. 

According to a report published two days ago entitled “Online Payment Type: Conversion Analysis,” by comScore’s Associate Analyst of Media Insights Amy Peterson, PayPal enjoyed a conversion rate of 87.5 percent during Q4 of 2015. Visa came in a distant second with 51.1 percent. “All others” combined totaled 45.6 percent, that is, just over half of PayPal’s performance. 

So when Kat McKerrow of thestreet.com recently reported, “PayPal has grown into a giant,” she was not hyperbolizing. “In 2015 alone,” wrote McKerrow, “the company processed 4.9 billion payments, more than a quarter of which were made with mobile technology. The company has 179 million active customer accounts and handles transactions in more than 200 markets worldwide and in more than 100 currencies.” 

It would not be unfair to characterize PayPal as something of a tail that has wagged more than a few dogs. PayPay began life in 1998 under the name Confinity, making security software for handheld devices. In 2000, Confinity merged with X.com, Elon Musk’s foray into online banking. Later that year, Musk discontinued other online banking operations to focus on Confinity, by then rebranded as PayPal. Not longer after, he changed the parent company’s name from X.com to PayPal. 

It was only a question of time before PayPal went public. Shortly after the IPO, eBay gobbled up PayPal and encouraged its shoppers to use it. With shoppers only too willing to comply, PayPal took off, outperforming and outlasting competing payment services such as Citibank’s c2it, Yahoo!’s PayDirect, Google Checkout, and Western Union’s BidPay. 

It wasn’t long before the acquired became the acquirer. Over the years, PayPal has picked up Verisign, Fraud Sciences (per Wikipedia, “a privately held Israeli start-up company with expertise in online risk tools”), Bill Me Later (now PayPal CREDIT), IronPearl, BrainTree, Xoom Corporation, and others. Along the way, PayPal forged partnerships with the likes of MasterCard, Discover, and others. 

Midway through last year, eBay spun off PayPal into a separate, publicly traded company. If recent numbers are any indication, the newly independent PayPal should manage quite well on its own.

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