We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks
PayPal Inc. - PYPL
An SI Board Since September 2001
Posts SubjectMarks Bans Symbol
156 35 0 PYPL
Emcee:  Xenogenetic Type:  Unmoderated
PayPal enables any business or consumer with email to send and receive online payments securely, conveniently and cost-effectively. Our network builds on the existing financial infrastructure of bank accounts and credit cards to create a global, real-time payment solution. We deliver a product ideally suited for small businesses, online merchants, individuals and others currently underserved by traditional payment mechanisms.

We seek to become the global standard for online payments. We offer our account-based system to users in 36 countries including the United States. For the three months ended June 30, 2001, our payment volume to business accounts, which we refer to as Gross Merchant Sales or GMS, totaled $663.0 million. GMS equaled 88.8% of our total payment volume of $746.9 million for this period. Our GMS consists mainly of payments to small businesses. Currently, a majority of these payments relate to sales of goods and services through online auctions. As of September 1, 2001, we had 10.0 million registered users, including 2.0 million business accounts and 8.0 million personal accounts.

The small business market presents us with a potentially significant opportunity. According to the U.S. Census Bureau, approximately 22.6 million small businesses in the U.S., those with less than $1.0 million in annual receipts, generate an aggregate of $1.6 trillion in annual sales. In addition, according to The Nilson Report, only 3.1 million merchants in the U.S. currently accept credit cards, leaving a large number of sellers unable to accept traditional electronic payments. By enhancing the existing payment infrastructure, the PayPal product serves the need of these sellers for a secure, convenient and cost-effective online payment solution.

To send a payment, a PayPal account holder enters the email address of the recipient and the payment amount, and selects a funding source--credit card, bank account or PayPal balance. When a consumer who has not yet registered with PayPal visits the website of a merchant that has integrated our Web Accept feature, the consumer can open a PayPal account from the merchant's site in order to make a purchase.

Payment recipients may use their funds to make payments to others, leave the funds in their PayPal accounts and earn a money market rate of return, or withdraw the funds at any time by requesting a bank account transfer or a check delivered by mail or by using the PayPal ATM/debit card. When a PayPal sender makes an email payment to a recipient who does not yet have a PayPal account, the recipient follows a link in the payment notification email to register with PayPal and gain access to the funds.

We have achieved our rapid growth through a combination of the "push" nature of email payments to non-registered recipients and the "pull" nature of Web Accept. During the three months ended June 30, 2001, our account base grew by an average of 18,000 per day, with virtually no traditional sales or marketing.

During the three months ended June 30, 2001, we processed an average of 165,000 payments per day totaling $8.2 million in daily volume. Our target transaction size ranges from $10 to $1,000. For the same period, 84.7% of our transactions fell within this range, and our average payment amount equaled approximately $50.

We earn revenues primarily from transaction fees on GMS, from international fees and from fees on our ATM/debit card. For the three months ended June 30, 2001, we generated revenues of $19.9 million, of which GMS fees comprised 81.9%, or $16.3 million. For the same period, our transaction fees equaled 2.5% of total payment volume, compared to our transaction processing expenses of 1.4% of total payment volume.

To establish PayPal as the online payment standard, we will continue to identify transactions and markets not served adequately by existing payment systems and to develop product features that improve upon those legacy systems. In addition to growing our customer base, our business strategy includes the following:

o o Expand small business payment volume; o Strengthen our position as the payment method of choice on online auctions; o Expand recurring revenue; o Increase volume of international payments; o Maintain low variable costs, particularly transaction losses; and o Grow PayPal ATM/debit card usage.

Company Information

You may contact us at our principal executive offices, 1840 Embarcadero Road, Palo Alto, California, 94303, or by telephone, (650) 251-1100. You may find us on the web at We do not incorporate by reference any information contained in our website into this prospectus, and you should not consider information contained in our website as part of this prospectus.

We have registered the "PayPal" trademark. This prospectus also contains additional trade names, trademarks and service marks of ours and of other companies. We do not intend our use or display of other parties' trademarks, trade names or service marks to imply a relationship with, or endorsement or sponsorship of, us by these other parties.

We use the terms "balance" and "account balance" to refer to funds that our customers hold until they decide to withdraw the funds, transfer the funds to others through PayPal or invest the funds in the PayPal Money Market Reserve Fund. We pool these customer funds and, as agent for our customers, we deposit the funds in bank accounts or invest the funds in short-term investment grade securities. Beginning in October 2001, we plan to deposit all customer funds not transferred to the PayPal Money Market Reserve Fund into bank accounts. We believe that, in handling customer funds, we act solely as an agent and custodian and not as a depositary.

We use the term "credit cards" to refer, where applicable, to traditional credit cards as well as debit cards participating in the Visa or MasterCard networks.

We use the term "premier account" on our website to describe fee paying accounts held by individuals. We refer to premier accounts and business accounts collectively as "business accounts."

We present operating data, such as payment volume and number of users, only for the PayPal product. To ensure continuity of the information presented, we include data for Confinity, Inc. prior to the merger with Corporation in March 2000.

We expect the payments industry to remain highly competitive. The major competitive factors affecting our business include:

o convenience; o size of the network; o price; o security and privacy; o brand recognition; and o customer service.

We anticipate continued challenges from current competitors, who may enjoy greater competitive resources, as well as by new entrants into the industry. We compete or potentially compete with a number of companies, both directly in the specific online point-to-point payments market and indirectly in the payments market generally. Direct competitors include, eBay Online Payments, which is owned jointly by eBay and Wells Fargo, Yahoo!'s PayDirect, Citibank's c2it, which has distribution through AOL and Microsoft, the U.S. Postal Service, and Western Union's MoneyZap. Potential direct competitors, should they decide to enter the market, may include CheckFree and American Express. Indirectly, we compete with traditional payment methods such as checks, credit cards and wire transfers, in addition to online wallets such as Microsoft's Passport.
Previous 25 | Next 25 | View Recent | Post Message
Go to reply# or date (mm/dd/yy):
ReplyMessage PreviewFromRecsPosted
156Members of the ‘PayPal Mafia’ include tech titans like Elon Musk, Peter Thiel, aGlenn Petersen111/12/2023
155PayPal Launches a Stablecoin in Latest Crypto Payments Push -- PayPal USD will Glenn Petersen-8/7/2023
154PayPal Hits the Reset Button Company deeply cut its 2022 guidance, but shares cGlenn Petersen14/30/2022
153WSJ version PayPal Shares Tumble After Disappointing Outlook Payments giant ciSr K12/2/2022
152PayPal stock plunges on weak earnings guidance PUBLISHED TUE, FEB 1 20224:28 PMGlenn Petersen12/2/2022
151Ouch !! PayPal earnings topped views while revenue and total payment volume misJohn Hayman-11/9/2021
150For what it's worth. The Fool on the deal with Pinterest. John youtu.beJohn Hayman-10/29/2021
149PayPal says it’s not looking to buy Pinterest right now; shares jump 6% PayPal Glenn Petersen110/25/2021
148You're not the only one. Neither do I. The market agrees with us. PPYPL dowGlenn Petersen110/20/2021
147Why are they buying Pinterest ? I don't get it. JohnJohn Hayman-10/20/2021
146Pinterest shares soar following report PayPal may buy it PUBLISHED WED, OCT 20 Glenn Petersen-10/20/2021
145Still the best way to pay online IMO. Without Paypal, internet shopping wouldn&#BigMacAttack-8/31/2021
144PayPal is exploring a stock-trading platform for its U.S. customers PUBLISHED Glenn Petersen18/30/2021
143PayPal CEO Dan Schulman: Cryptocurrency Is the Real Deal. And the Superapps Are Glenn Petersen14/25/2021
142I do get frustrated with their UI though. the help documents are almost alwaysGreen Receipt-4/12/2021
141171,000 people joined PayPal every day in 2020 on average. Market cap is now 3John Hayman-2/15/2021
140PayPal on the New E-commerce Trends That Are Here to Stay Hayman-12/16/2020
139It's down, it's up. GoPYPL John Earnings report came out. What happeneJohn Hayman-11/3/2020
138Thoughts on the potential Bitgo acquisition? PayPal Holdings IncFollowing-Mr.Pink110/23/2020
137Another new high. John PayPal to let you buy and sell cryptocJohn Hayman-10/21/2020
136PayPal is expanding, and I assume they would be looking to get some assets cheaJohn Hayman-8/24/2020
135I have no holding in PayPal at the moment. I was researching it this weekend toGreen Receipt-8/23/2020
134The antitrust probes just opened up by the EU against Apple ( AAPL) - Get RepoJohn Hayman-6/18/2020
133yeah it was short lived. My guess is a developer messed up and it took them aGreen Receipt-6/4/2020
132Mine worked ok, even with the link you provided. So ??? JohnJohn Hayman-6/4/2020
Previous 25 | Next 25 | View Recent | Post Message
Go to reply# or date (mm/dd/yy):