How Did PayPal Become One of the World’s Favoured Payment Systems?

PayPal has swiftly become a household name similar to Visa or MasterCard, and the logo is up there with the most recognisable brands in the world. For a company that has only been in existence since 2002, this is an impressive feat. After humble beginnings as a subsidiary of eBay, the payment platform struck off on its own in 2015 and has enjoyed a meteoric rise since then. How did PayPal reach these dizzying heights, and can its success be of benefit to businesses in London?

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Lucrative Partnership

When PayPal went public in 2002, the company was snapped up by eBay and became a key component of the trading site for $1.5 billion. At the time, eBay was one of the most lucrative businesses on the web, and in 2001 it had the largest user base of any e-commerce site. PayPal made a name for itself as the go-to method of completing transactions on eBay, with over 70 percent of auctions accepting PayPal payments.

The time spent as a subsidiary of eBay between 2002 and 2014 proved to be lucrative for PayPal, as it allowed the company to build solid foundations and to gradually develop its solid reputation for being safe and secure. It also added extra security protocols during this time, including the VeriSign payment solution in 2005 and the development of the PayPal Secure Card Service in 2007.

Global Domination

It was when eBay spun off PayPal in 2015 that the company was able to enter phase three of its business model and establish its global reach in a greater number of markets. In the five years since then, its value has skyrocketed and in 2019 it was ranked in 204th place in Fortune 500 of the largest corporations in the United States. Now, PayPal can be used in more than 200 regions and has spread into massive territories including China and India.

One of the main ways that PayPal has been able to extend its reach massively has been through clever partnerships with major players in the gaming and entertainment industry. This is a sector that has expanded rapidly since PayPal’s inception, and it is now worth more than $159.3 billion in 2020. PayPal has made a name for itself as a popular payment solution in the online casino sector, where it is almost ubiquitous. This site recommends the top sites at which players can gamble using PayPal, which is seen as a particularly useful method for transferring funds from overseas. Due to its ease-of-use and strong reputation, many people feel safe when making payments through PayPal, so it’s only natural that online casinos adopt this payment system.

PayPal has also been one of the main payment systems on PlayStation and Xbox One for some time now. It is a useful tool for paying repeat subscription bills as players can easily monitor how much they are spending via the PayPal dashboard. As well as being on consoles and at online casinos, PayPal has also broken into another popular branch of the gaming industry in mobile. When users pay for mobile apps, they can do so through their PayPal accounts.

The PayPal brand has become associated with safety, security, and trust, and it has achieved this through its many years as a subsidiary of eBay. Now, by putting its name on legitimate and world-renowned companies like Sony and Microsoft, that reputation is getting better and better.

Businesses in London Can Take Advantage

Business owners operating in London or online could possibly use PayPal’s success as a way to boost their own businesses. Accepting PayPal payments could help increase sales, as there are some customers around who simply don’t trust other payment methods anymore. This can also be a useful way for people from overseas to pay, as PayPal handles cross-currency transfers easily.

The other way that businesses can capitalise on PayPal’s success is by offering other alternative payment methods. It could be argued that PayPal has helped open up people’s minds to the possibility of using more diverse ways to pay for things, and this may be why cryptocurrencies like bitcoin are rising in popularity. In London, there are already numerous businesses that accept bitcoin and these could be considered ahead of the curve. Companies that get on alternative payments early could be successful. Even PayPal is open to cryptocurrencies and offering services with this in mind.

PayPal could be considered as one of the greatest success stories of the internet era. It took over a decade to earn global recognition, but now it is one of the best-known payment systems in the world. It has also helped more people get used to alternative payment platforms.

Featured image credit: Pexels

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