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PayPal is a great way to pay for goods and services online. It is an American operation which is one of the largest internet payment companies, and probably the most widely used in the US and UK.
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The story began in 1998, just as the World Wide Web was really beginning to become the essential and indispensable phenomenon it is today. The original company was called Confinity, which quickly set up its new money transfer service, called PayPal. It quickly drew the attention of the now world famous American entrepreneur Elon Musk, who brought the business under his wing at X.com. Development was rapid, and the new company was re-named PayPal and launched publicly on the American stock market in 2002. By this point, PayPal was the primary method of payment used by traders and buyers on the new online market place phenomenon eBay, with over 70% of transactions settled using this method. This made the newly launched company irresistible, and eBay quickly bought the company for around $1.5 billion the same year.
PayPal soon became the default choice for millions of eBay users around the world. Not only that, but because it was the primary method of trading for eBay users, and was so easy to operate, it began to be used for other online transactions too. So much so that by 2015, it was spun off from its owners to become an independently operating public company once again. By this point it was operating in over 200 countries across the world, with over 159 million actively used registered accounts.
The fundamental reason behind PayPal’s popularity and rapid growth is its simplicity and security of use. One of the original problems which held back the growth of early internet trading was how to make payments between ordinary people across the world safe and secure. How could the seller be sure that they would receive their money? And how could the buyer ensure that they received their goods, and that their financial information were not used fraudulently – they were, after all, expected to give these details to completely unknown strangers, not to companies with a public reputation to maintain. PayPal and eBay solved this issue. Banking details were provided to PayPal only, who acted as an intermediary, sending on the funds to the seller when goods were despatched. Meanwhile, the buyer had a further incentive to actually provide the goods as described: not only did payment depend upon this, but poor seller ratings at eBay would discourage further trading.
PayPal is now the default payment method for many when buying goods and services on the internet. Setting up an account is really easy. You just need sign up with an e-mail address and password, then securely link your bank details to your new PayPal account. You can then receive payments into your account (from trading) and pay for goods and services. Payments are made by simply using the PayPal button provided and giving your e-mail and password (or PIN if you are paying using your mobile).You then receive a monthly statement, whereby you must pay any outstanding debt from your purchases by direct debit from your bank account. If you have a surplus, you can withdraw this money by transferring it into your own bank account.
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