The PayPal of today has come a long way from the 1998 startup that enabled people to transfer funds between Palm Pilots. As the company nears its spinoff from eBay, it is continuing its acquisitive streak with some transformative purchases.
PayPal's pending acquisition of Xoom was immediately interpreted as a threat to the likes of Western Union, but the combined company may have another target in its sights: M-Pesa, the mobile-based money transfer system popular in Africa.
The Ebay Inc. Venmo application (app) is arranged for a photograph on an Apple Inc. iPhone 5s in Washington, D.C., U.S., on Friday, Aug. 22, 2014. After downloading the Venmo mobile-payment app onto a smartphone, users can connect them to bank and credit-card accounts, and then link up with friends to send and receive money on-the-go. Venmo, based in New York, alone handled $314 million in mobile payments in the first quarter of this year, up 62 percent from the prior quarter. Photographer: Andrew Harrer/Bloomberg
The late-2013 purchase of Braintree addressed PayPal's problems in approaching up-and-coming developers. As part of that deal, PayPal also gained ownership of the mobile P2P system Venmo, which has already influenced the direction of PayPal's mainstream payment offerings.
MOUNTAIN VIEW, CA - 4/26/02 - The headquarters of the VeriSign corporation in Mountain View, Calif. on Friday. The company had a less than spectacular quarter and the stock was hammered by investors after a weak earnings report on Friday.
Photo by John Decker/Bloomberg News
PayPal's 2005 purchase of VeriSign Inc.'s gateway business brought it client relationships with about 100,000 non-eBay merchants. This $370 million deal came at a time when PayPal handled roughly 70% of its payments through eBay, and was aggressively looking to pursue relationships with mainstream merchants.
Bill Me Later
If you can't beat 'em, buy 'em. The instant credit company Bill Me Later replaced PayPal's in-house version, called Pay Later. Last year, PayPal rebranded this offering as PayPal Credit.
David Marcus, president of PayPal, a unit of EBay Inc., pauses during a Bloomberg Television interview in London, U.K., on Wednesday, April 24, 2013. EBay, based in San Jose, California, is expecting payment volume at PayPal to double in the next three years as people increasingly shop and pay for goods on mobile devices. Photographer: Simon Dawson/Bloomberg *** Local Caption *** David Marcus
Zong, which lets consumers charge purchases to their wireless phone bills, may be more significant for the talent it brought to PayPal than the technology. Zong CEO David Marcus became PayPal's president a year after the 2011 acquisition, with the goal of operating PayPal with more of a startup mentality. Marcus left PayPal in 2014 for a role at Facebook.
The company that eBay bought back in 2002 wasn't always called PayPal. It's the result of a 2000 merger of Confinity and X.com, the latter an online banking company. PayPal eventually revived the X.com brand for its X.commerce developer program.
Hand holding smartphone with wi-fi connection on the screen in cafe
Fig Card Corp.'s technology allows consumers to make in-person payments using a phone's WiFi signal to communicate with a USB device at the point of sale. PayPal bought Fig in 2011, and Fig's approach minus the USB plug-in strongly resembles that of PayPal's cloud-based wallet.
PayPal's deal for Paydiant better equips it to handle payments at the point of sale through phones, as opposed to the company's earlier effort to get to the point of sale through a plastic card and phone-number-and-PIN system. Paydiant's technology gives PayPal more options that work with merchants' existing technology.
PayPal's 2012 purchase of Card.io gave it ownership of a fundamental building block of mobile payments. Card.io's technology allows consumers to use a phone's camera to read account details off a plastic card. This greatly simplifies the process of entering payment details into a mobile app, reducing friction for any future PayPal mobile projects.
Small and midsize merchants in North America continue to struggle with the effects of COVID-19 on their bottom lines, but those who have developed an online presence and made changes to in-store payments have found the process to be a vital step.
For the 44.6 million households who rent, coming into the crisis almost 27% were already paying half or more of their monthly income on housing. That meant they had litte ability to save for an emergency, let alone a pandemic that would cause record job losses.
Several large mobile point of sale projects are hitting the market at once to reach financially troubled retailers, with JPMorgan Chase making use of a three-year-old acquisition to push back against the technology firms that have been gobbling up small-business clients.