If you’ve bought anything on the internet, there’s a very good chance that you’ve used PayPal. If you’ve somehow managed to avoid creating an account with PayPal, it’s certain that you’ve seen their logo as a payment option alongside traditional payment processors like Visa and Mastercard. PayPal has become such a fixture of online payments that most of us never give it a second thought.

The Honey coupon code scandal has brought PayPal into the limelight for the first time in years. The coupon-finding app Honey has been accused of replacing affiliate links with its own link, essentially stealing millions in revenue from the social media influencers and content creators who have been promoting it. PayPal has owned Honey since January 2020.

While this isn’t PayPal’s first brush with controversy, it’s probably the biggest. PayPal has had minor controversies over how it handles fraud, its tendency to shut down fundraising accounts, and fees, and their lack of transparency about policy changes. For the most part, these have been minor issues that were settled quickly.

An ability to avoid controversy is vital for online financial service providers, especially in today’s fast-moving tech climate. The fact that PayPal has remained at the top of the digital payment services game for 25 years shows how important the brand is.

This article will look at how PayPal has revolutionised payments on the internet. From their early history as the payment service for eBay to their diversification today, we’ll tell the PayPal story.

History of PayPal

PayPal was originally founded under the name Fieldlink in 1998 (though it was renamed Confinity within a year). It was founded by Peter Thiel, Max Levchin and Luke Nosek, all of whom remain incredibly successful. Confinity focused largely on security software.

In 2000, Confinity merged with a financial services company that had been created by Tesla founder Elon Musk. By 2001, the company had changed its name to PayPal and Musk was no longer involved with the project. At this point, the company shifted its focus completely to digital payments.

These early years saw the company change direction as often as it changed names and directors. Luckily for PayPal and internet shoppers of the future, that was all about to change. 

Use for online shopping

The late 1990s and early 2000s saw online shopping slowly becoming a normal practice. It was during this period that eBay emerged and became a cultural phenomenon. eBay was such a major player in the online retail space that the 2005 comedy blockbuster The 40-Year-Old Virgin had an entire eBay subplot.

When PayPal became a publicly traded company in 2002, it was almost immediately bought out by eBay. eBay saw that having an online payment provider would expand the online retailer space and make online shopping easier and safer for customers. PayPal would remain the official payment servicer for eBay until 2014.

As eBay grew in popularity, so did PayPal. eBay users began to use PayPal for more and more of their online shopping transactions. A partnership with Mastercard in 2007 expanded where PayPal could be used. By 2010, PayPal had over 100 million users from 25 different currency areas.

PayPal was set free by eBay in 2014. As a separate entity, PayPal has continued to acquire smaller payment service companies in order to expand its reach and the services it can offer. Alongside online shopping, users can now send personal payments, create savings accounts and invest in cryptocurrencies. It now has at least 425 million users, spread across 202 markets.

Use at online casinos

There was a period in PayPal’s history where it refused to process payments related to gambling. This lasted from 2003 to 2010. In 2010, PayPal resumed its relationships with gambling brands, with some new rules. The company would only process funds from gambling brands that were fully regulated and operating with all necessary licenses, and PayPal is now used across many entertainment platforms.

As a payment method for online casinos, PayPal has a lot of positives. Their refusal to work with unlicensed sites makes PayPal a very trustworthy payment processor. The Casinomeister guide to withdrawal times shows that PayPal withdrawals are consistently processed faster than most of the other well-established payment methods. Additionally, PayPal’s international acceptance means players can use it at online casinos around the world.

Charity

The PayPal Giving Fund is a registered charity operated by PayPal. Its purpose is to streamline the donation process so that non-profit organizations and charities can receive their funds faster and without having to sacrifice a huge percentage to middlemen.

Having a charitable project like this improves PayPal’s reputation. Some of the charities that participate in the PayPal Giving Fund are Save the Children, the American Red Cross, Doctors Without Borders, Florida Yorkie Rescue and Operation Kindness.

Cryptocurrency

Investing in cryptocurrency is becoming a mainstream form of portfolio diversification. PayPal saw the potential for mass market cryptocurrency investment and jumped at the chance to further expand their operations. They partnered with Paxos Trust to enable their users to spend, trade and manage cryptocurrency investments.

By branching out into cryptocurrency, PayPal has guaranteed that it will remain relevant even if there are major changes to the world’s financial systems. Embracing innovation has always been key to PayPal’s brand strategy and it is one of the main reasons why they have been able to revolutionise online payments in the 25 years since they were founded.

Final thoughts

The issues surrounding Honey and PayPal’s potential complicity in affiliate link replacement are going to be a small blip in the history and reputation of the company. As this article has shown, PayPal is a dominant force in the online payment world and one scandal is unlikely to shake that.

The real threat to PayPal’s dominance comes from the constant appearance of new payment apps and digital banks. However, the name recognition, positive reputation, and international availability that PayPal enjoys make it nearly impossible for any tech upstart to take its place.