In the early days of the Internet, the idea of transferring money online between individuals was revolutionary even though banks and other financial institutions had been doing it for years. The founders of Paypal originally started a company called Confinity in 1998. John Malloy of BlueRun Ventures provided the startup capital to entrepreneurs Ken Howery, Max Levchin, Luke Nosek, and Peter Thiel. Their original objective was to provide secure software for financial transactions on handheld devices.
Elon Musk thought the young company was doing something right and in 2000 Confinity merged with his online banking company, X.com. Bill Harris, then the CEO of X.com, disagreed with the merger and left in May of 2000. Musk felt that Confinity’s operations were potentially more lucrative than X.com’s so he ceased developing the online banking and focused exclusively on Confinity’s money transfer operations. The company was renamed Paypal in October of 2000. The website was born, and the rest is history.
Paypal was acquired by the growing company eBay in July 2002 and most eBay sellers adopted Paypal’s method of money transfer which spurred the company’s level of growth and acceptance. Since then, the company has continually expanded with multiple acquisitions over the years. Now, PayPal is commonly used for transactions for purchases both on and off the web.
I do a lot of online work where I get paid through PayPal and since this is my main form of payment, I became curious about the history of PayPal. The great thing about the internet is that it gives you a lot of information that you would not normally be able to find.
Searching around for information about PayPal it was very interesting to see how they got started and how they continue to operate as a profitable business. PayPal is definitely the worldwide leader when it comes to online money transfers in a safe and secure way which makes them tops in the online banking industry.
Although PayPal is not a traditional bank they very much operate like one. I wanted to learn more about how they were able to leverage their financial ability in a partnership with industry online lead eBay and how that came to purchase them. You can really say that eBay took off once they were able to utilize the services of PayPal.
Over the years PayPal then acquired other online payment operators, but then just recently eBay and PayPal split apart into 2 separate divisions. It is rather fascinating to learn a lot about these two industry giants, especially how they got started and where they are today.