History of PayPal: the history of the biggest online payment system in the world

Last year PayPal processed 4 billion payments through their 'secure payments ecosystem'. And with its peer-to-peer payment platform PayPal.Me that launched in September, PayPal is in an exciting time of its evolution.

Techworld looks back at the milestones that contributed to PayPal's online domination, and its most recent projects and acquisitions.

History of PayPal: the early years
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History of PayPal: the early years

Initially established in 1998 under the name Confinity, PayPal was founded by Luke Nosek, Max Levchin, Peter Theil and Ken Howery. By 1999 it was launched as a money transferring platform and was backed and funded by John Malloy from BlueRun Ventures, an early stage venture capital company specialising in IT, mobile and consumer technology.

History of PayPal: the arrival of Elon Musk
Credit: Flickr/JD Lasica

History of PayPal: the arrival of Elon Musk

In March 2000 Elon Musk's online banking company X.com merged with Confinity and by 2001 X.com was rebranded as PayPal, taking it public in 2002.

History of PayPal: eBay acquisition
Credit: eBay

History of PayPal: eBay acquisition

In 2002 PayPal was acquired by eBay for $1.5 billion and made PayPal its default payment setting which according to Venture Beat resulted in one in four listings closing via a PayPal transaction.

History of PayPal: VeriSign acquisition
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History of PayPal: VeriSign acquisition

2005 saw PayPal acquire payment service VeriSign. This acquisition aimed to bring PayPal more security and more ecommerce potential.

History of PayPal: partnership with MasterCard
Credit: MasterCard

History of PayPal: partnership with MasterCard

PayPal's 2007 partnership with MasterCard made way for customers to pay via PayPal on websites that accepted MasterCard payments but do not support PayPal's infrastructure. It was reported that the aim of the partnership was to reduce PayPal's dependency on transactions generated via eBay auctions.

History of PayPal: official regulation moved to Luxembourg
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History of PayPal: official regulation moved to Luxembourg

In 2007 PayPal moved operations across the EU to Luxembourg. This move aimed to generate more presence across the European market but also boasted some quite handy perks. From this move, PayPal would benefit from lower tax, less regulation and less data transparency.

History of PayPal: Fraud Sciences acquisition
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History of PayPal: Fraud Sciences acquisition

The end of 2007 saw PayPal generate $1.8 billion in revenue. In 2008 PayPal acquired Israeli startup Fraud Sciences for $169 million. Fraud Sciences provide transaction verification and fraud prevention.

History of PayPal: Anonymous hacks
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History of PayPal: Anonymous hacks

In 2010 PayPal suffered DoS attacks (denial-of-service) reportedly linked to the WikiLeaks donation payment process being stopped. In 2011 fourteen alleged members of Anonymous group were charged with attempting to disrupt PayPal's operations and by 2013 thirteen of them were charged.

History of PayPal: IronPearl and Braintree acquisition
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History of PayPal: IronPearl and Braintree acquisition

In 2013 PayPal acquired engagement software startup IronPearl and payment platform Braintree with the aim for further product development.

History of PayPal: PayPal and eBay split
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History of PayPal: PayPal and eBay split

2014 saw PayPal President David Marcus leave the company to make way for former Virgin Mobile CEO Dan Schulman and the announcement that eBay would split from PayPal. From this, PayPal became a publicly traded company after pressure from hedge fund investor Carl Icahn.

History of PayPal: Xoom acquisition
Credit: Xoom

History of PayPal: Xoom acquisition

In July of this year PayPal reportedly announced that it will be acquiring money transferring service Xoom. This will grant PayPal access to Xoom's 1.3 million strong US user base.

History of PayPal: PayPal.Me
Credit: PayPal

History of PayPal: PayPal.Me

This year PayPal have launched a peer-to-peer service called PayPal.Me that allows its users to request funds from a peer via text or email. Users will get a personal PayPal.Me link added to their PayPal account that can be shared with friends and family members making money transfers quick and easy.

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