What is PayPal?

PayPal is an Internet website that allows users to transfer money online. The company was formed in early 2000 with the merger of X.com and Confinity.com. Both corporations offered competing email payment services, in addition to other specialty payment services. PayPal's online payment services became popular very quickly, and within one year of the company's launch PayPal was handling almost 50 times as many eBay auctions as eBay's own Billpoint service. eBay purchased PayPal in late 2002, opting to replace Billpoint and offer tighter auction integration options. In 2003 PayPal won two Webby Awards: both the Best Finance Site and the People's Voice Award for Best Finance Site. In 2005, PayPal absorbed Verisign's payment gateway operation.

As of early 2007 PayPal boasted nearly 150 million accounts in almost 200 geographical markets. The company is constantly out-performing parent eBay, with 2007 Q1 revenue growth outpacing eBay's same-quarter growth by almost 50%. Two out of every five PayPal payments originate off eBay, as new websites add PayPal payment options daily. This constitutes over 5% of all online payments worldwide. The company leads the industry in online security initiatives and developments, with common popular security features originating on PayPal. One such example is the Captcha image, in which legitimate users are distinguished from bots by copying text from an image to a form field. Other initiatives include a risky buyer alert for eBay sellers, and an electronic keychain fob that generates a rotating security code to supplement the standard username and password scheme.

In addition to eBay auction payments and standard email-to-email personal payments, PayPal offers premium business accounts for both online and offline merchants. With these accounts, website visitors can pay via their personal PayPal accounts, or with a credit card. Offline merchant processing solutions allow any merchant with an Internet connection and a secure web browser to accept credit cards via telephone or in person. Other payment options include the recurring billing feature, email billing, and the US-only Website Payments Pro Solution. The variety of billing options for merchants and the array of comfortable payment options for customers are unique in the field.