PayPal

Internet audience

2020: In the top 50 largest Internet sites in the world

PayPal in Russia

Main article: PayPal Russia

In May 2013, the Russian subsidiary of the PayPal payment system, a non-bank credit institution (NPO) PeiPal RU, received a license from the Bank of Russia under number 3517-K and began working in the Russian Federation.

History

2024: Dismissal of 9% of employees

On January 30, 2024, the American company PayPal, which operates the electronic payment system of the same name, announced its intention to reduce the number of personnel by about 9%. This is necessary to optimize the organizational structure and ensure sustainability in the long term.

The changes were announced by PayPal CEO Alex Chriss. The restructuring is focused on building a growing business and unlocking the company's true potential, he said. PayPal plans to focus more on efficiency, automation, and technology consolidation to simplify management and eliminate duplicate features.

PayPal announced its intention to reduce headcount by approximately 9%

During 2024, we will reduce the global workforce by about 9% - both through direct layoffs and by eliminating open vacancies. We do this to streamline the business and provide the necessary customer service opportunities, "says Criss.

In total, about 2,500 workers will be cut. They will receive due payments and compensation. At the same time, PayPal will continue to invest in areas of business that have growth potential. In particular, the company intends to introduce artificial intelligence technologies. These features include faster checkout, shopping history recommendations, and more. Sellers will be able to use a new AI tool called "smart receipts" to recommend personalized items to buyers on email receipts, as well as charge cashback. PayPal implemented Fastlane's one-click payment function, which increased the payment rate by almost 40%. All of these changes mark the "next chapter" in PayPal's development, Criss said.^[1]

2023

Reduction of 7% of the state

On January 31, 2023, PayPal announced the dismissal of 2 thousand employees, which is about 7% of the total staff of the company. The payment system will focus its resources on priority areas and has already adjusted its costs.

PayPal, like other high-tech companies, explained the dismissal as a difficult macroeconomic environment, in which the company found itself by the beginning of 2023.

The president and general director Dan Shulman wrote in the release that PayPal is working to address the "difficult macroeconomic situation." According to him, the company has made progress in focusing resources on the main priorities and optimizing the cost structure, but there is still a lot of work to be done. PayPal management will counter this together, building on the unprecedented scale of the global platform, the strategic investments the company has made to strengthen core capabilities, and the trust and loyalty of PayPal customers.

We are operating in an environment where we believe inflationary pressures will continue into 2023, real wage growth will remain negative for a period of time and discretionary spending will be under pressure. We are navigating this environment as best we can and we have taken into account this range of volume and revenue growth results regarding what we believe we can deliver in terms of operating margins and earnings per share, "commented PayPal Acting Chief Financial Officer Gabriel Rabinovich.

For all dismissed PayPal employees, the company's management promises to treat with "maximum respect": they will be provided with generous packages of services starting in February 2023 and, if necessary, will be helped with consultations and in moving to another company. PayPal plans to disclose other terms of the cuts later.

Only in January 2023, according to Forbes, large US companies fired about 60 thousand specialists. The Layoffs service, which tracks layoffs in technology companies around the world, calls about the same figure. At the same time, for the entire 2022, according to various estimates, large US companies have reduced from 125 thousand to 150 thousand employees.^[2]

Hacking 35 thousand accounts and stealing data on user transactions

In January 2023, it became known that 35,000 PayPal accounts were hacked as a result of a large-scale identity substitution attack. Hackers were unable to withdraw user funds, but they received a lot of information about user transactions and their personal data.

2022: 30,900 employees

2021

Number of users - 458, 3 million

Purchase of payment service for payments in installments Paidy for $2.7 billion

On September 7, 2021, PayPal announced the purchase of Paidy for $2.7 billion. After the sale, the Japanese company will continue to run its existing business and maintain the brand, and executives, Paidy President and CEO Riku Sugi and Paidy Founder and Executive Chairman Russell Kammer, will retain their posts, the press release said. Read more here.

Exploring a stock trading platform

In the summer of 2021, PayPal hired a veteran of the brokerage industry, Rich Hagen. After leaving Ally Invest, Hagen became CEO of a previously unannounced division of PayPal called "Invest at PayPal."

In order to offer customers stock trading, PayPal may become a partner or buy an existing broker-dealer as part of this plan. PayPal has already held talks with potential industry partners, one of the sources said.

PayPal shares jumped more than 3% after CNBC reported, while Robinhood shares lost more than 3%.

The launch of the purchase and storage of cryptocurrency in Britain

PayPal introduces the ability to buy, store and trade cryptocurrency in the UK starting from the end of August 2021. Customers will be able to buy bitcoin, ether, litecoin and bitcoin cash through their PayPal wallets.

The move, which marks the first international expansion of PayPal's cryptocurrency services outside the U.S., could further spread the new class of assets.

Buying cryptocurrency startup Curv

On March 8, 2021, PayPal announced that it had agreed Israeli cryptocurrency startup Curv to acquire it. The company is engaged in ensuring the safe storage of crypto assets. The terms of the deal with Curv were not disclosed, but its closure is expected in the first half of 2021.^[3] According to Calcalist, PayPal paid $200 to $300 million for the acquisition^[4] the startup. More. here

2019: $4bn Honey purchase

On November 21, 2019, PayPal announced the acquisition of Honey for $4 billion. This is the largest purchase for the American payment system. Read more here.

2018

In the top 20 Internet giants in terms of the size of the Internet audience

Buying Simility for $120 million

On June 21, 2018, PayPal announced the acquisition of Simility for $120 million. The deal, which the buyer intends to pay with his own funds, is scheduled to close by the end of the third quarter. Read more here.

$400m Hyperwallet purchase

On June 19, 2018, PayPal] announced the acquisition of the Hyperwallet platform for $400 million. The deal is expected to close in the fourth quarter of 2018. Read more here.

Buying Jetlore

At the end of May 2018, PayPal announced the purchase of AI technology developer for retailers Jetlore to predict consumer desires. Read more here.

Purchase of iZettle for $2.2 billion

On May 17, 2018, PayPal announced the purchase of Swedish fintech startup iZettle for $2.2 billion. This acquisition was the largest in the history of the American payment system. Read more here.

Provision of banking services

In April 2018, it became known that PayPal began providing simple banking services for some customers: issuing debit cards, the ability to place checks and even receive loans. Deposit insurance is handled by Federal Deposit Insurance Corp (FDIC).

It is planned that users of the payment service will not pay for the use of cards. Also, the service does not want to impose restrictions on I/O funds.

PayPal did not make public statements about the provision of virtual banking services, perhaps because the company does not have a banking license in the United States, which means that all these services are the result of a series of bilateral agreements between PayPal and small banks that chose to remain anonymous. These agreements allow PayPal to work with the FDIC and circumvent some restrictions in Visa and MasterCard policies.

PayPal CEO Bill Ready explained that the company's new services are for customers who do not have accounts with other banks.

If you don't have a bank account, you can't call an Uber taxi, you can't book an Airbnb, "he said. - We provide such an opportunity.

The focus on serving such communities could also explain the contract between PayPal and M-Pesa, a mobile money service based in Kenya. The deal will allow M-Pesa users to link their accounts to PayPal to make it easier to pay for goods and services outside Kenya.

However, PayPal is far from the only company trying to enter the banking sector. Square and Amazon also offer banking services to their users. In 2017, TransferWise began offering free currency conversion banking to select customers, and Monzo, a British digital debit card company, launched full bank accounts for its users in 2018.^[5]

2017

Abandoning blockchain

The PayPal board shares the opinion of Tim Swanson, the author of the term "chainwashing" (chain washing): blockchain is not a panacea, but a mass hobby. PayPal management decided to abandon blockchain technologies and return to the traditional database management system ^[6]

During the 4YFN international conference, Harper Reed, a developer and programmer of software for PayPal systems, said he saw no point in using blockchain. "When I hear about it (blockchain - ed.), The first thing that comes to mind is drug trafficking. Since I am not a drug addict, this technology is not interesting to me, "Reed categorically stated

.

PayPal's policy in recent years has focused on database management systems. An example of the efficiency of working with databases is the author's application for mobile devices "Venmo." Its turnover in 2016 amounted to over $20 billion.

Earlier, SWIFT also expressed distrust of blockchain, calling the distributed registry not mature enough technology to meet the requirements of the financial community.

Money Transfer Robot

PayPal introduced the first automatic program (robot) in February, allowing Slack users to send payments to each other without leaving the group messaging application.

After installing the robot in Slack, users can link their PayPal account to the application and set transaction parameters. To send money, print "/paypal, "enter the required amount (max. $1 million) and the recipient ID in Slack. The robot is available to Slack users in Australia, Canada, the United Kingdom and the United States^[7].

The most popular payment service

According to Auriemma Consulting Group (ACG), PayPal is the most actively used online payment service. 77% of cardholders are familiar with it, of which 62% are ^[8].

Among PayPal users, 81% of respondents make online transactions with it, 79% use it at every opportunity. This also applies to the PayPal Me P2P transfer system, which is preferred by consumers who have already tested several P2P applications (PayPal Me is preferred by 42% of respondents compared to 19% who chose their bank's payment R2R service). At the same time, banks have a number of advantages over PayPal, the most important of which are the possibilities of direct deposit, card selection, as well as the convenience of receiving payments and ease of use.

Despite the rather high ratings, PayPal loses to competitors in terms of confidence in terms of the security of financial information (80% of consumers trust their main bank, and only 55% said the same about PayPal). Most consumers (56%) are usually reluctant to place deposits in their PayPal accounts, but there is one caveat here. Despite the fact that banks win in terms of overall trust, 69% of consumers believe that PayPal technology can better protect their financial information.

2015

Penalty for violation of the sanctions regime

On March 26, 2015, it became known about a fine of $7.7 million, which the company will have to pay for servicing the accounts of persons accused of ties with Iran, Cuba, terrorism and weapons of mass destruction^[9].

Under an agreement with the Treasury's Foreign Assets Control Authority USA , PayPal will pay a $7.7 million fine for violating the sanctions regime on accounts of individuals accused of ties to Iran, Cuba, terrorism and weapons of mass destruction. The department identified 486 transactions in the amount of $44 thousand.

One of the accounts that PayPal served belonged to Kurshad Zafer Sira - an acquaintance of Pakistani nuclear physicist Abdul Kadir Khan, accused of transferring nuclear technology to Iran, Libya and North Korea. His name has been on the US Treasury sanctions list since 2009, however, until April 2013, PayPal continued to serve his account, completing 136 transactions worth $7091.

During this time, automated payment processing systems noted the coincidence of names seven times, but the company's employees did not take any action. As specified in PayPal, until April 2013, the company did not have the means to verify payments in real time, which is why some prohibited transactions were processed.

On April 3, 2013, PayPal blocked the account of a Pakistani citizen and reported the incident to the Treasury.

Moving Servers to OpenStack

At the end of March 2015, it became known that PayPal transferred its servers to the OpenStack platform. The migration process continued for about three years. More information about this can be found here.

ARM servers in data centers

On April 28, 2015, it became known that PayPal began using servers built on ARM processors in its data centers. This step will allow the payment system to improve the energy efficiency of its computer capacity and increase competition in the server chip market.^[10]

The fact that ARM servers have appeared in PayPal data centers was announced by the manufacturer of chips for these machines Applied Micro during the publication of its quarterly reports. We are talking about a 64-bit single-chip X-Gene ARMv8 system.

"We are pleased to announce that PayPal, one of the world's leading operators of hyperscale data centers, has deployed and launched X-Gene-based servers," said Applied Micro President and CEO Paramesh Gopi.

According to him, at one of the presentations, ARM Holdings (develops and licenses ARM technologies) showed comparative results in the performance of X-Gene servers and traditional solutions using the example of PayPal data processing in real time. The analysis showed the superiority of the X-Gene, which is complemented by a low price, Gopi noted.

The ARM servers that PayPal deployed cost half the price compared to traditional systems

Applied Micro claims that servers on X-Gene chips cost about half as much and require seven times less operating costs compared to the more common hardware used in data centers.

Paramesh Gopi also said the company is optimistic about the future of the X-Gene platform, whose benefits PayPal has proven in real work. At the same time, the payment system is one of the many owners of hyperscale data centers that are engaged in the implementation of X-Gene, the head of Applied Micro added, promising in 2015-2016 to talk about similar successes of clients engaged in science, finance, high-performance computing and network equipment.

Gaining independence from eBay

On July 16, 2015, eBay released its second quarter financial statement, in which the company named PayPal as the final date for its separation from itself.

As of July 17, 2015, PayPal will operate as an independent public company whose shares will begin trading on the NASDAQ exchange as of July 20, 2015 under the ticker symbol PYPL, according to an eBay statement. eBay's designation will remain the same - EBAY. After the official separation of companies, eBay will focus on e-commerce, PayPal - on digital payments.^[11]

It is worth noting that eBay announced the separation of PayPal into a new company back in September 2014, but formally the board of directors approved this transaction only in June 2015.

Independent PayPal will be headed by Dan Schulman, who was formerly a top manager at American Express. eBay will be led by Devin Wenig, President of eBay Marketplace. The companies intend to maintain close cooperation within the framework of the concluded operational agreement.

The new PayPal has high challenges. First, the company intends to increase the number of sellers connected to its payment system, as well as expand the user audience, which by the end of June 2015 amounted to 169 million people (11% more than a year earlier). PayPal's base growth is slowing: in the first three months of 2014, it was measured at 16%, and in the next three quarters it decreased to 15%, 14% and 13%, respectively.

Important for PayPal is the frequency of use of the service. By mid-2015, people working with the system paid for goods and services with its help about two to three times a month. The company wants to ensure that users make transactions through PayPal at least a couple of times a week.

PayPal will pay special attention to the world stage. To do this, in early July 2015, the Xoom international online money transfer service was purchased. This deal worth $890 million, which is the largest acquisition for PayPal, is scheduled to close by the end of 2015. According to Shulman, PayPal will continue to make acquisitions that can strengthen the company's position at the global level.^[12]

2014: Service to about 162 million users in 190 countries

According to official data, the service serves about 162 million users in 190 countries and works with 25 world currencies. In 2014, PayPal's revenue amounted to $7.9 billion, which is 19% higher than 2013. The user base for the year increased by 13%. In the fall of 2014, eBay announced its intention to spin off PayPal into a separate business in 2015.

2013: PayPal Galactic

PayPal, with the participation of the SETI Institute, plans to bring together space industry leaders to discuss the problems arising from the commercialization of spaceflight. As part of the program, which the company called PayPal Galactic, it is supposed to look for answers to questions about how to adapt current banking systems to serve customers in space, what legislation will regulate the operation of payment systems for space, and so on. The need to create such a payment system already exists, according to PayPal. For example, space station crew members may already need to pay bills on Earth, or purchase e-books, audio recordings and other entertainment products. Creating a safe and functional commercial system that can work in space is not an easy task. But with the help of the scientific community, other technology companies and society, solutions to these problems can be found, the company said in a statement.

2012: Hacker attacks for blocking donations for Wikileaks

A student from Britain launched a hacker attack on the PayPal website in 2012, causing several million pounds of damage to the company. According to the prosecution, 22-year-old Christopher Weatherhead, being a student at Northamberland University, took part in a cyber attack organized by the hacker group Anonymous in 2010-2011. At the trial, prosecution spokesman Sandip Patel said that this attack damaged the company at 3.5 million pounds. Art. (5.5 million dollars USA) and "caused significant damage to reputation and had a negative impact on the company's commercial activities."

Also, S. Patil spoke about how more than 100 employees of the company spent three weeks to restore order in the company's affairs after the attack. K. Vaserhead denies any involvement in the attacks on PayPal.

The prosecution also believes that the online payment service was targeted by hacker groups after it refused to accept and process cash donations for the WikiLeaks website. Payment systems PayPal, MasterCard and Visa were attacked by the hacker group Anonymous in retaliation for blocking their donations Wikileaks in 2011. The attacks were called "Operation Payback."

2002

The company for $1.5 billion acquired an online auction, eBay which uses the service to calculate buyers and sellers.

PayPal in Ukraine

2015: PayPal in the Ukrainian market

On June 26, 2015, it became known about the assistance of the Ministry of Economic Development and Trade of Ukraine to the initiative of the PayPal payment system to enter the Ukrainian PayPal market^[13].

In June 2015, the Ministry of Economy and the NBU sent official letters to PayPal with a proposal to discuss the system's entry into Ukraine.

"Now for the IT industry this is one of the most pressing requests," said Deputy Minister of Economy Maxim Nefyodov.

According to him, in early June, the department sent an official letter to the American company signed by the minister.

PayPal is persistently invited to expand the regions of its geographical presence and launch an office in Ukraine.

"Unfortunately, Ukraine is a state with 45 million population and an associate member of the EU, still not on the PayPal card. In the ministry, we see a significant social demand for high-quality online payment systems in Ukraine, where the IT community is developing dynamically, "the official letter said

.

The Ministry of Economy noted that Ukraine has all the necessary components for a quick start of the system:

• good penetration of banking services,
• a significant share of card payments,
• fast-growing coverage of Internet services, etc.

"The ministry, together with the NBU, are ready to provide PayPal with all the necessary information that is required to decide on the launch of the service in Ukraine, and will provide all kinds of support," the letter says.

PayPal promptly responded to the proposal of the Ukrainian authorities and appointed a special manager who will have to deal with the issue of the system entering Ukraine.

In May 2015, the working group prepared a list of recommendations that the NBU should implement to harmonize the conditions for the development of payment systems and market launch.