PayPal has become one of the world's largest digital payments companies, facilitating online money transfers for millions of users and serving as an electronic alternative to traditional payment methods. The PayPal service allows customers to securely pay vendors and transfer funds online through a variety of products such as PayPal Cash, PayPal Credit, Venmo peer-to-peer payments, and Xoom international money transfers.
Founded in 1998, PayPal rapidly grew in popularity as eBay's main payment processor and was acquired by eBay in 2002. It remained part of eBay for over a decade until becoming an independent publicly traded company in 2015 after being spun off.
Today, PayPal generates significant revenue by charging fees for providing payment processing services. It collects fees from both merchants and consumers on transactions.
In 2022 alone, PayPal processed nearly $1.36 trillion in global payment volume from merchants and consumers combined.
In this comprehensive guide, we will look at:
PayPal History
Who Owns PayPal today? (Major Shareholders)
PayPal's Executive Leadership Team
How Does PayPal Make Money?
PayPal's Revenue 2023
PayPal History - From Startup to Tech Giant
PayPal's early origins trace back to 1998 when it was founded as Confinity, a company focused on developing security software for handheld devices. Confinity launched an online money transfer service called PayPal in 1999.
The fledgling PayPal service quickly became popular amongst eBay users as a fast and convenient way to pay for eBay purchases. Seeing PayPal's growth, eBay acquired the company in 2002 for $1.5 billion.
Under eBay's ownership, PayPal continued to expand rapidly. By the time it was spun off in 2015, PayPal had 143 million active registered accounts and was processing 4 billion payments per year.
The payments company became an independent publicly traded company called PayPal Holdings Inc. Since the split, PayPal has focused on growing beyond just an eBay subsidiary and expanding globally across all forms of digital commerce.
Who Owns PayPal Today? (Major Shareholders)
PayPal Holdings Inc. has been an independent publicly traded company since its high-profile separation from eBay in 2015. Some of the major shareholders of PayPal Holdings today include:
The Vanguard Group, Inc.
BlackRock Fund Advisors
SSgA Funds Management, Inc.
Comprehensive Financial Management, LLC
Polen Capital Management LLC
Geode Capital Management, LLC
Norges Bank Investment Management
Morgan Stanley
Norges Bank Investment Management
Northern Trust Corporation
Nuveen Asset Management, LLC
Assenagon Asset Management SA
Temasek Holdings Pte Ltd.
PayPal’s largest individual shareholders are its top executives and insiders.
PayPal's Executive Leadership Team
PayPal has assembled an experienced executive leadership team to drive the company's growth strategies:
Alex Chriss - President and CEO
Peggy Alford - EVP, Global Sales and Merchant Services
Jonathan Auerbach - Executive Vice President
Archana (Archie) Deskus - EVP, Chief Technology Officer
Michelle Gill - EVP, General Manager, Small Business and Financial Services Group
Aaron Karczmer - EVP, Chief Enterprise Services Officer
Additional key leaders include:
Frank Keller - SVP, General Manager, Large Enterprise Group
John Kim EVP - Chief Product Officer
Jamie Miller - EVP, Chief Financial Officer
Bimal Patel - SVP, General Counsel
Kausik Rajgopal - EVP, Strategy, Corporate Development and Partnerships
Under the leadership of this management team, PayPal aims to continue expanding digital payments globally across both retail and online commerce. The team brings expertise across payments, credit, consumer technology, and strategic planning to steer PayPal's future growth.
How Does PayPal Make Money?
PayPal generates the majority of its revenue from fees on transactions made by merchants and consumers. The company charges net transaction fees to merchants and consumers for each transaction completed on its payments platform, including:
Fees on currency conversions and cross-border transactions
Fees on fund transfers
Fees on cryptocurrency transactions
Other miscellaneous transaction fees
In addition to transaction fees, PayPal also generates revenue through:
Partnerships
Referral fees
Subscription fees for some services
Gateway processing services
Interest and fees earned on PayPal Credit loans and receivables
In 2022, PayPal generated over $27.5 billion in total revenues. Transaction fees made up $25.2 billion or 91.6% of this. The remaining $2.3 billion or 8.4% was from non-transaction revenue streams.
PayPal Revenue Source 2023
PayPal has continued its steady revenue growth trajectory into 2023. Some key facts about PayPal's revenue performance in 2023 so far:
In 2023, PayPal reported a total revenue of $28.556 billion for the twelve months ending June 30, 2023, representing an 8.21% increase compared to $26.417 billion in revenue for the same period in 2022.
For Q2 2023 (ending June 30, 2023), PayPal reported quarterly revenue of $7.287 billion, up 7.07% year-over-year from $6.806 billion in Q2 2022.
PayPal's revenue sources primarily include:
Transaction revenues from fees on payment processing and other value-added services (around 90% of total revenue)
Interest and fees earned on PayPal Credit loans and receivables
Other merchant fees like PayPal Here card readers
In 2022, PayPal's total payment volume reached $1.36 trillion, highlighting the scale of transactions generating fees.
PayPal has achieved consistent revenue growth annually, with total revenue increasing every single year since 2010 as digital payments expand.
The company aims to build on its positive 2023 revenue momentum by further expanding digital wallets and merchant services globally.
PayPal's Recent Technology and Service Developments
In addition to revenue growth, PayPal has been making significant developments in its technology and services to expand its offerings and increase consumer engagement:
Open APIs: PayPal announced plans to open its payment platform to third-party developers with the release of new APIs (Application Programming Interfaces) that allow developers to integrate PayPal's payment processing capabilities into their own applications.
Stablecoin: PayPal launched a U.S. dollar-backed stablecoin cryptocurrency, becoming the first major financial technology firm to embrace stablecoins. The stablecoin, dubbed PayPal USD, is backed by U.S. dollar deposits and short-term U.S. Treasuries and is issued by Paxos Trust Co.
Buy Now, Pay Later (BNPL): PayPal has expanded its platform with BNPL installment financing services, allowing consumers to make purchases and pay over time in installments with no interest.
Partnerships: PayPal has formed deeper partnerships with major credit card networks like Visa and Mastercard to enhance its offerings and increase consumer engagement.
Overall, these latest developments in PayPal's technology and services reflect strategic initiatives to expand its digital wallet offerings, tap into cryptocurrencies and alternative financing options, and ultimately maintain its leadership as a digital payments provider.