What is Paypal? How Does PayPal Work? Beginner's Guide


PayPal is a way to send and receive money online. You can use PayPal to shop on thousands of websites, or to send money quickly to anyone with an email address. In this guide, we’re going to show you how to set up a PayPal account that can be used to buy or sell online, when using eBay and other online shopping websites.PayPal is a way to send and receive money online. You can use PayPal to shop on thousands of websites, or to send money quickly to anyone with an email address. In this guide, we’re going to show you how to set up a PayPal account that can be used to buy or sell online, when using eBay and other online shopping websites.

What is Paypal?
PayPal is a common and popular way to send and request payments all over the globe. If you shop online, you’re likely already familiar with how to make a purchase using PayPal. But it’s also possible to use PayPal to make a payment even if you don’t have a PayPal account yourself.
This can offer a convenient way to send money to friends and family, and also to make payments for goods and services. It’s worth noting, however, that sending money through PayPal without an account can be relatively costly.
PayPal can also be an expensive choice if you need to make payments internationally, whether or not you have an account with them. For international payments, in particular, you could save a lot of money if you choose an alternative provider, such as TransferWise. More on that later.
PayPal is a service that enables you to pay, send money, and accept payments. Register your credit card or debit card with your PayPal account. You can pay by simply choosing PayPal at checkout, logging into your PayPal account, and confirming your payment. We complete the process for you. Simply choose PayPal when you select a payment option on this site, and you can quickly open a PayPal account and add your payment method to complete your purchase. You can use your PayPal account to shop with millions of merchants and sellers around the globe wherever you see the PayPal logo.

Using PayPal to pay internationally?
There are a few catches.
PayPal allows users to send and receive payments more or less anywhere in the world whether you want to pay back a friend or family member, get paid as a freelance worker, or simply indulge in a little online shopping. However, different services with PayPal come with different costs. It’s well worth understanding the PayPal fee structure before you decide if PayPal is the right way to make your payment.
If you’re sending money to a family member or friend, based overseas, there are several charges to pay.
Some of the costs depend on how you choose to fund the payment

Who are the owners of PayPal?
Paypal founder and Paypal Owner

PayPal was initiated and launched as a money transfer service at Confinity in 1999, funded by John Malloy from Blue Run Ventures. PayPal was founded by Ken Howery, Luke Nosek, Max Levchin, Peter Thiel, Elon Musk (X dot com founder). The key people involved include John Donahoe (chairman), and Dan Schulman (CEO). The company’s operation center is in Luxembourg, and the international headquarters are in Singapore.

PayPal’s corporate headquarters is in the North San Jose Innovation District of San Jose, California at North First Street Campus. PayPal Operations Center and main office are in Omaha, Nebraska. It was announced in 2014 that eBay would spin off PayPal into separate publicity traded company. In 2018, eBay announced that the agreement ends in 2020

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The History of PayPal
The history of PayPal isn't a long one, but there are plenty of ebbs, flows and tipping points spread across the digital payment company's two decades-plus history.
The company, founded and currently headquartered in Mountain View, Cali., smartly targeted an underserved market as the internet tightened its grip on global consumers: Banking and payments.
The founders' idea was both simple and efficient - convince customers to share their emails, banking and credit card information in return for fast, low-cost payments. Small businesses, online merchants, and consumers quickly signed on, with the company handling more than $3 billion in payments from 10.2 million individual consumers and 2.6 million commercial customers within three years of opening its doors.
Within two years, the founders renamed their company PayPal, after a decision was made to focus only on payments made over the burgeoning internet. Thiel and Levchin adeptly leveraged an opening in the payments market, as nobody was really focusing on a digital payment platform between consumers and businesses, a gap the duo exploited brilliantly as PayPal took off at the start of the new century.
Why didn't anyone else notice that consumer and business payments on early retail sites like eBay (EBAY - Get Report) were being paid by checks and money orders via the U.S. Postal Service, resulting in delays for products to be delivered and for checks to clear?
That answer is unclear, but the two PayPal founders certainly cracked the code and set up the company as the leading light for online payments for years to come.


PayPal history: looking back at the milestones
August 1998. Peter Thiel meets Max Levchin after Thiel gives a speech at Stanford University on global market opportunities. Later that year they come with the idea of digital wallets.
December 1998. PayPal is founded, although its original name is Confinity.
October 1999. A company engineer produces an email-based payment technology.
January 2000. PayPal's founders and managers notice that end users are out there on the Internet asking commercial partners and other buyers to sign up for PayPal, to foster quicker payments. Almost immediately, PayPal paves the way for eBay payments on the site, giving PayPal a significant user-base boost.
March, 2000. PayPal clears the 1 million customer mark.
June 2001. The founders ditch the Confinity name and officially change it to PayPal.
February 2002. PayPal (PYPL-Nasdaq) goes public with the issuance of new company stock. The IPO is a hit as PayPal stock rises by over 50% and closes its first day of trading at $20 per share.
October 2002. PayPal is sold to eBay for $1.5 billion, in a highly touted "marriage" between digital auction and online payment services.
February 2006. PayPal surpasses 100 million end-user accounts.
April 2006. PayPal rolls out is a new mobile payment platform, PayPal Mobile, allowing customers to pay via PayPal through their smartphone devices.
December 2008. PayPal hits 10 years of age and nears the 150 million user accounts user mark.
September 2013. PayPal acquires payments gateway company Braintree Systems, owner of Venmo, an online payment competitor, for $800 million.
Early 2014. Trouble brews as Wall Street provocateur Carl Icahn, a major PayPal shareholder, demands that the company part ways with eBay.
July 2014. Company shareholders would agree with Icahn, forcing a split between the two tech giants with the end result that PayPal was once again a single, publicly-traded company. The day PayPal's stock begins trading, the company's market value crests a whopping $49 billion, instantly creating an army of PayPal millionaires.
July 2015. Paypal agrees to buy Xoom, a digital money transfer firm for $890 million, which paves the way for the company to accelerate the handling of international payments.
January 2016. Venmo, now a PayPal subsidiary, surpasses $1 billion in payments processed for a single month - its highest level ever.
February 2017. PayPal launched its first peer-to-peer payment system, thus establishing a solid foothold in the emerging P2P marketplace.

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How can you use PayPal to pay for Amazon?

You can't pay for Amazon purchases with PayPal directly, but there are two simple ways to work around the impasse. Both involve indirect use of PayPal but ultimately lead to your PayPal account covering Amazon sales.

Buy Amazon gift cards with PayPal
One of the easiest ways to use PayPal to buy from Amazon is to purchase Amazon gift cards with your PayPal account. You can buy an Amazon gift card from a site like eGifter.com using a PayPal balance and then use that gift card to shop normally on Amazon.

Just be sure you verify any site from which you are buying a gift card is safe and secure.

Use a PayPal Cash Card or Business Debit MasterCard
If you plan to regularly use your PayPal balance to shop from Amazon, then getting a PayPal Cash Card (or a PayPal Business Debit Mastercard, if you have a PayPal business account) will allow you to use the card in the regular checkout process as you buy things from Amazon.

Getting a PayPal card is a simple process and well worth the effort if you don't want your cash to languish in your PayPal account while it could be used to buy just about anything.

Paypal Top holder's
#1. Braintree Payments
In 2013, PayPal acquired Chicago-based Braintree Payments for $800 million. Since its founding in 2007, Braintree developed a payments gateway that powers and automates online payments for merchants and online businesses. Among its major customers are successful online companies such as Uber Technologies Inc. and Airbnb, Inc. The company processed more than $50 billion in total authorized payment volume in 2015, more than double its volume in 2014. Braintree has helped PayPal become a global one-stop shop for merchant account services and payment processing.


#2. Venmo
PayPal’s acquisition of Venmo was actually a key part of its 2013 Braintree deal. Venmo, which was wholly owned by Braintree, is a mobile payment solution in the hotly-contested P2P payments space. The Venmo payments app has become incredibly popular among customers in a variety of settings, and particularly for customers in restaurants who use the service to split up a tab. Although Venmo's payment volume represents a small portion of PayPal’s mobile payment volume, it is the fastest-growing platform. By the end of Q1 2019, Venmo had more than 40 million active accounts. During that period, Venmo processed about $21 billion in total payment volume, representing a year-over-year incrase of 73%.


Note : Venmo is the fastest-growing payments platform among PayPal's services.

#3. Paydiant
The acquisition of Paydiant Inc. in 2015 for $280 million provided PayPal with a major entry into the mobile payments market. Paydiant’s platform provides big-name merchants, such as Wal-Mart Stores Inc. (WMT) and Best Buy Company Inc. (BBY), with the ability to integrate complete mobile wallet capabilities into their own mobile apps. The acquisition has helped PayPal further develop its relationships with merchants and capture a bigger share of the mobile wallet space.

#4. Xoom Corporation
As part of a strategy to strengthen its international business, PayPal acquired Xoom Corporation in 2015 for approximately $890 million. Founded in 2001, Xoom had more than 1.3 million active U.S. customers who use its platform to send international remittances totaling $7 billion during the year PayPal acquired it. PayPal is targeting emerging markets in India and China as key growth territories and sees the Xoom online money-transfer platform as a way to tap into the $600-billion global market for remittances. PayPal anticipates an enormous potential for mobile international remittances in the growing, worldwide migrant worker market.


#5. Modest
In 2015, PayPal also acquired Modest, a small, Chicago-based fintech company, to help it expand into an emerging branch of the e-commerce ecosystem called contextual commerce. Modest’s technology enables online merchants to drag and drop buy buttons to any application, social media page, email or blog post where a consumer might encounter their products. Instead of having to be redirected back to the merchant’s website or shopping portal, consumers can click the buy button wherever they are and complete the transaction.

The Modest acquisition serves PayPal’s desire to expand its e-commerce reach among merchants. The Modest technology team is working with PayPal’s merchant services provider, Braintree, to provide online merchants with a one-stop set of tools for embedding buy buttons wherever they can, while supporting the back-end payment processing.

#6. TIO Networks
PayPal announced the acquisition of Canadian bill payments platform TIO Networks in early 2017. The $233-million deal helped PayPal expand its footprint into bill payments by leveraging TIO's cloud-based, multi-channel payment platform. At the time the deal was announced, TIO served 14 million consumer bill pay accounts and had processed transactions worth more than $7 billion in 2016.

#7. iZettle
PayPal acquired European fintech startup iZettle for about $2.1 billion in cash in May 2018. Sweden-based iZettle was founded in 2010 as a mobile credit card payment service much like Square but evolved into providing small businesses a gamut of services such as software support and financing solutions across Europe and Latin America. The company anticipated $165 million in revenues generated through $6 billion in payment volumes for 2018. PayPal acquired iZettle in large part to expand its in-store presence, particularly with small businesses.

#8. Hyperwallel
In June 2018, PayPal acquired Hyperwallet for approximately $399 million. Lisa Shields founded the company in 2000 and the company is based in San Francisco. Hyperwallet helps small organizations by allowing them to seamlessly receive payments from online marketplaces. Hyperwallet's unique platform allows companies to send and receive payments in any currency to almost every country in the world.