International University in Germany
Supervisor: Prof. Keiichi Nakata
PayPal is an account-based system that allows anyone with an email address to send and receive online payments. This service is easy to use for customers. Members can instantaneously send money to anyone. Recipients are informed by email that they have received a payment. PayPal is also available to people in 38 countries. This paper starts with introduction to the company and its services. The information about the history and the current company situation are covered. Later some interesting and different technical issues are discussed. The Paper ends with analysis of the company and several future recommendations. KEYWORDS
PayPal, Payment Systems, E-business, Money Transactions, PayPal Analyses. TABLE OF CONTENTS
2. PayPal as e-Business
3. Technical Issues
4. Analysis (of PayPal as e-Business)
1.1 - PayPal A Popular Company
This paper is about a company called PayPal. First I will touch the general information about the company, then provide information about several details and finish with several useful future recommendations. PayPal (formerly X.com) that was founded in 1998 belongs to an Electronic Payment Systems, more precisely to Generic Systems subgroup. It is located in San Jose and carries out services that provide the possibility of sending and receiving money by means of computers in an easy, secure and fast way using an account-based system. This can be done by anyone (a private person or legal entity) who has an email address. When the money is transferred, a message is sent to the recipient's email address notifying about the transaction. At the same time certain security measures are taken during these operations. One can still charge his or her account without having an electronic card, using the bank transfer or a paycheck. Transferring money is as easy as sending an email for customers.
(Fig.1, What is PayPal, retrieved on February 15
, 2004 From: PayPal Developer Conference Keynote, Alex Kazim, VP Marketing, 05/08/03. Data available on http://paypaldev.org/ )
In 2002, PayPal was acquired by eBay. It has quickly become popular. Today the company offers services in thirty-eight countries and has about forty million customers for today. In most of these countries it supports bank withdrawal service and is especially popular among eBay customers. Fig.1 briefly illustrates Company's business. The system enables its users to send money, using computers. The same can be done by means of mobile phones that are support Web. During money transfer the service fee is charged to the customers' bank account, credit card or PayPal balance. At present two thirds of the customers use this service while participating in an online auction. It must also be noted that opening a Personal account and certain basic services provided by PayPal are free of charge. There are certain charges for opening Premier and Business accounts and for additional types of services. The company has a successful business. Number of customers is increasing. Therefore the company's profits also. In year 2002 company had a significant gross. Its one- year sales growth was 134% ($236.6) and one-year employee growth was 94.2% (1200 employees). 1.2 - Type of the Business
PayPal is a credit card processor or also called E-Transaction Company that allows businesses and individuals to send and receive money. The Jurisdiction differs according to state and sometimes from country to country. As a financial company it has a statute "Money Transmission Act" (may have different name depending on the state). 2. PAYPAL AS E-BUSINESS
2.1 - Services and Products
Several types of products and services are provided by the company. Individual/Business accounts, Merchant and Auction...