Electronic payment system PayPal Essay
Electronic payment system PayPal is now well known throughout the world. Moreoverб this electronic payment system is considered to be the largest in the worldЖ шt is present in the markets of 190 countries, working with 24 currencies, and the number of accounts opened in the system exceeds 153 million. Today, PayPal is the undisputed leader in its field, and none of the competitors could not even come close to the number of users and traffic which it operates.
The company was founded in 1999 by former students at Stanford University, Pieter Thiel and Max Levchin. While internet banking was developing very poorly, but well-known Internet auction site eBay demonstrated rapid growth in online payments. After analyzing the situation, the founders of PayPal have predicted the rapid growth of financial flows passing through the Internet, and focused on providing banking services online. In early 2000, PayPal launched active PR-company, which results came very quickly: in April the number of international auctions, served in the system PayPal, exceeded 1 million. Since 2000, the company’s business went up rapidly, and the company was to bring in capital, paying solid dividends to investors.
In 2002 PayPal had an attempts to make an Initial Public Offering. The company planned to sell 5.4 million shares at a range of between $12 and $14 to raise about $76 million. However in some time PayPal delayed its initial public offering. The company suffered a series of setbacks because of their problems with CertCo Inc., which sued PayPal for patent infringement on its electronic transfer payment technology. Also there were complaint that PayPal had restricted the consumer accounts. That is, negative factors prevented the company to make an IPO, but when the issues were settled, the company had a successful Initial Public Offering and was then acquired by E-Bay. So PayPal became the main financial instrument of payment for most of the transactions in the eBay auction.
Already in 2005 the value of transactions the company made was about $8 billion, and in 2006 – $11 billion. The company was constantly developing its own electronic payment system that allowed it in 2007 to enter markets in more than one hundred countries, and the number of users at that moment was up to 133 million people. PayPal works with different currencies: Australian dollars, euros, pounds sterling, Canadian dollars, Japanese yen and Chinese yuan, the service is now serving CZK Danish krone, Hong Kong dollar, Hungarian forint, New Zealand Dollars, Polish Zloty, Norwegian krone, Singapore dollar, Swedish krona and Swiss franc.
Over 11 years of its presence in the market of Internet finances, PayPal has received numerous prestigious international awards for its achievements in the financial sector. For example, in 2006, an electronic payment system PayPal has received “Webby prize” and “Webby People’s Voice” for winning the award for “Best Web-site providing financial services.”
Electronic payment system PayPal is officially licensed in the United States of America as an accredited system of money transfer. Moreover, despite the fact that the company PayPal is not a banking institution, it is subject to financial management activities of banks and follows many of the rules, which are adopted for the regulation of banking activities. PayPal Inc. is licensed by supervising bodies governing the activities of banks and financial institutions in 29 U.S. states. User of the accounts in the system are insured by SafeWeb Insurance against unauthorized withdrawals, amounting to U.S. $ 100 000. Money of users of the system are placed in the accounts at the bank Wells Fargo. To ensure security, user accounts are password protected, and the connection in transactions is carried out with using SSL, 128-bit or higher. Among similar payment system, PayPal has the most secure procedure for conducting financial transactions, which includes the transfer of data verification through a secure communication channel. In addition, monitoring the status of the operation is carried out at each stage, that can almost completely eliminate the cases of obtaining unauthorized access to users accounts.
Today, PayPal is the undisputed leader in its field and none of the competitors could even come close to the number of users and traffic, which it operates. More than 90% of Internet merchants worldwide prefer to accept payment for their goods through Paypal.
