PayPal

PayPal is an American-based global e-commerce business allowing payments and money transfers to be made through the Internet. Online money transfers serve as electronic alternatives to paying with traditional paper methods, such as checks and money orders.

Originally, a PayPal account could be funded with an electronic debit from a bank account or by a credit card at the payer's choice. But some time in 2010 or early 2011, PayPal began to require a verified bank account after the account holder exceeded a predetermined spending limit. After that point, PayPal will attempt to take funds for a purchase from funding sources according to a specified funding hierarchy, regardless of what funding source is listed as "primary" in the account-holder's profile. The funding hierarchy is (1) a balance in the PayPal account; (2) a PayPal credit account, PayPal Extras, PayPal SmartConnect, or Bill Me Later (if selected as primary funding source); (3) a verified bank account; (4) other funding sources, such as non-PayPal credit cards.[2]

The recipient of a PayPal transfer can either request a check from PayPal, establish their own PayPal deposit account or request a transfer to their bank account.

PayPal is an acquirer, performing payment processing for online vendors, auction sites, and other commercial users, for which it charges a fee. It may also charge a fee for receiving money, proportional to the amount received. The fees depend on the currency used, the payment option used, the country of the sender, the country of the recipient, the amount sent and the recipient's account type.[3] In addition, eBay purchases made by credit card through PayPal may incur extra fees if the buyer and seller use different currencies.

On October 3, 2002, PayPal became a wholly owned subsidiary of eBay.[4] Its corporate headquarters are in San Jose, California, United States at eBay's North First Street satellite office campus. The company also has significant operations in Omaha, Nebraska, Scottsdale, Arizona, and Austin, Texas, in the United States, Chennai, Dublin, Kleinmachnow (near Berlin) and Tel Aviv. As of July 2007, across Europe, PayPal also operates as a Luxembourg-based bank.

On March 17, 2010, PayPal entered into an agreement with China UnionPay (CUP), China's bankcard association, to allow Chinese consumers to use PayPal to shop online.[5] PayPal is planning to expand its workforce in Asia to 2,000 by the end of the year 2010.[6][7][dated info]

Between December 4–9, 2010, PayPal services were attacked in a series of denial-of-service attacks organized by Anonymous in retaliation for PayPal's decision to freeze the account of WikiLeaks citing terms of use violations over the publication of leaked US diplomatic cables.[8][9][10][11]

History

Beginnings

The current incarnation of PayPal is the result of a March 2000 merger between Confinity and X.com.[12] Confinity was founded in December 1998 by Max Levchin, Peter Thiel, Luke Nosek, and Ken Howery, initially as a Palm Pilot payments and cryptography company.[13] X.com was founded by Elon Musk in March 1999, initially as an Internet financial services company. Both Confinity and X.com launched their websites in late 1999.[14] Both companies were located on University Avenue in Palo Alto. Confinity's website was initially focused on reconciling beamed payments from Palm Pilots[15] with email payments as a feature and X.com's website initially featured financial services with email payments as a feature.

image source : http://upload.wikimedia.org/wikipedia/commons/thumb/3/39/PayPal_logo.svg/200px-PayPal_logo.svg.png

At Confinity, many of the initial recruits were alumni of the Stanford Review, also founded by Peter Thiel, and most early engineers hailed from the University of Illinois at Urbana-Champaign, recruited by Max Levchin. On the X.com side, Elon Musk recruited a wide range of technical and business personnel, including many that were critical to the combined company's success, such as Amy Klement, Sal Giambanco, Roelof Botha[16] of Sequoia Capital, Sanjay Bhargava and Jeremy Stoppelman.[17]
To block potentially fraudulent access by automated systems, PayPal used a system (see CAPTCHA) of making the user enter numbers from a blurry picture, which they coined the Gausebeck-Levchin test.[18]
eBay watched the rise in volume of its online payments and realized the fit of an online payment system with online auctions. eBay purchased Billpoint in May 1999, prior to the existence of PayPal. eBay made Billpoint its official payment system, dubbing it "eBay Payments", but cut the functionality of Billpoint by narrowing it to only payments made for eBay auctions. For this reason, PayPal was listed in many more auctions than Billpoint. In February 2000, the PayPal service had an average of approximately 200,000 daily auctions while Billpoint (in beta) had only 4,000 auctions.[19][20][21] By April 2000, more than 1,000,000 auctions promoted the PayPal service.[22] PayPal was able to turn the corner and become the first dot-com to IPO after the September 11 attacks.[23]
In 2011, PayPal announced that it would begin moving its business offline so that customers can make payments via PayPal in stores.[24]
source : http://en.wikipedia.org/wiki/Paypal