PayPal is a financial service that allows people to send and receive payments online without having to share financial information. Members can accumulate funds in their PayPal account that is linked to their bank account or credit card. There are currently over 110 million active accounts on PayPal operating in 25 currencies across 190 markets (PayPal, 2012b).
Founded in 1998, the service was originally named Confinity (a mix of confidence and infinity) and renamed X.com in 2000 before becoming PayPal in 2001. PayPal became affiliated with eBay in January 2000 when they noticed eBay users were pasting their logo on auction pages to encourage others to sign up for an account. In October 2002, eBay acquired PayPal with a vision of “combining the strength of the world's largest online marketplace with the web's leading payment system” (PayPal, 2012a)
PayPal supports e-commerce by enabling cashless financial transactions and trade between nations and currencies. It gives vendors and consumers access to a growing global marketplace and continues to expand its services to create digital payment options on mobile and handheld devices (PayPal, 2012b).
EBay sellers also use PayPal as a way to keep record keeping up to date in either monthly or quarterly formats. New technologies also allow PayPal to capture more of the market with services “tailored for mobile devices as smartphones and tablet computers become an increasingly essential feature of modern lifestyles.” (Herald Sun, 2012)
PayPal have recently acquired a San Francisco start up company, Card.io, who are working on technology that will allow smartphones to take credit card payments. Hill Ferguson, PayPal Vice President of global product said that PayPal has been working with the company to “fold the new technology into its own mobile application and decided to buy the company”. (2012) Payments can be made using the data “captured from pictures of credit cards taken with smartphone cameras”. Ferguson is excited about the possibilities of Card.io’s technology and its involvement in changing “the future of shopping and payments”. (2012)
EBay has recently seen its share price rise by almost ten percent with PayPal’s continued progress in the mobile market making “eBay an increasingly compelling investment proposition.” (Mukherjee, 2012) Both PayPal and eBay are reported to more than double transactions, worth $10 billion this year, and this is thought to be because of eBay’s transitioning to mobile more easily than other Internet companies. (2012)
How PayPal Works
PayPal. (2012a). History, from https://www.paypal-media.com/history
PayPal. (2012b). Welcome to the Press Centre - Get the latest on PayPal, 2012, from https://www.paypal-media.com/au/about
Mukherjee, Arpita. (2012, July 19) Analyst’s upbeat on eBay, shares soar. Reuter’s http://in.reuters.com/article/2012/07/19/us-ebay-research-idINBRE86I14P20120719
APA,( 2012, July 19) PayPal buys into mobile payment technology, Herald Sun. Retrieved: http://www.heraldsun.com.au/news/breaking-news/paypal-buys-into-mobile-payment-technology/story-e6frf7k6-1226429525017
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