Almost all of us have used it, but how many of us know how the company came about? Like so many things we take for granted in this modern age, PayPal has genuinely revolutionized how we do online commerce. For some of us it’s useful for sending birthday money to relatives, for many perhaps we use it to pay for spur-of-the-moment clothing purchases, for others, it’s the primary way we get paid. Therefore, it’s important to learn a bit about the history of this revolutionary company.
Early Years and the eBay Partnership
The origins story of PayPal is not as glamorous as that of our favorite superheroes, but it’s nevertheless shrouded in mystery. Originally, PayPal went by the name of Confinity and worked as a money transfer service. It cycled through a couple of purchasers until in 2002 online auction giant eBay bought it for $1.5 billion. This partnership seemed to work initially, providing an enormous boost to the reputation of the company and also ensuring it was used for purchases through the auction site.
However, within four years all but 12 of the original 50 employees had stopped working for the company. The structured and somewhat ‘traditional’ way that eBay worked wasn’t quite cutting edge enough for the young PayPal team. However, this adversity achieved one thing. The 12 who made it through those first few years stayed well connected with each other and did glorious things.
The PayPal Mafia
The aforementioned 12 became colloquially known as the PayPal Mafia, partly for the incredible dealings they made and partly because of a hilarious photograph of them all wearing gangster attire. The PayPal Mafia had formed such strong bonds thanks to the difficulties experienced in the early years of the company. This camaraderie, combined with the youth and confidence gained from working in a Silicon Valley startup, had positioned these founders as people who would thrive in the internet age.
These talented individuals would go on to find LinkedIn, Yelp, YouTube and Reddit, and become key investors in Facebook. Oh, and one of them was Elon Musk. Elon alone would find X.com (which then acquired Confinity), and become the CEO of Tesla Motors. He also became a cofounder of SpaceX, Neuralink, The Boring Company, Solar City and Open AI. Not a bad resume.
Growing Bigger and Bolder
One thing that really set PayPal apart from other online payment companies was its absolute refusal to partake in anything that wasn’t strictly within the boundaries of the law. This has lent it some well-deserved trust in the public eye and enabled them to strike some deals over the coming years which would super power the company to the heights it set out to reach. In 2005 PayPal acquired Verisign, which allowed customers to have even more trust in the brand and allowed PayPal to sign deals with other giants in the retail market.
Next they struck a deal with MasterCard, allowing customers to use only their MasterCard details, but with PayPal as an intermediary. This partnership generated PayPal some $1.8billion and enough clout to gain partnerships with even more of the prominent payment providers.
As new technologies became available, PayPal was always keen to get into the action. Originally they were skeptical about being affiliated with the young online casino market, but nowadays with increased safety for consumers their reputation has massively improved. Therefore, Paypal has recently decided to allow online casinos to use their services. In 2015 several sites made full use of this and at present there’s an enormous selection of PayPal casinos to choose from. This method of payment seems perfectly designed for the market, as the instantaneous transactions allow for quick deposits and withdrawals.
Another exciting advancement that PayPal is working on is photo identification. PayPal employees flagged up an opportunity for faster payments, so work is being done to allow us to pay for goods simply by looking at our phones. Much like new passport systems, the technology on our phones can recognize our face from anybody else’s. So, instead of needing to remember a password, we can rely on our face. It’s very much in the early stages but it’s this kind of pioneering attitude that keeps PayPal right on the top of their game.