Leading online payment company: Paypal (PYPL) (1998)

PayPal Holdings, Inc. (NASDAQ:PYPL) was founded in December 1998 by Ken Howery, Max Levchin, Elon Musk, Luke Nosek and Peter Thiel. Since 2000, it has expanded its business gradually. It is headquartered in San Jose, California, with 21,800 full-time employees. Including the launch of business in other countries and the addition of currency units other than the US dollar, including the British pound, Canadian dollar, Euro, Australian dollar, Japanese yen, New Taiwan dollar and Hong Kong dollar, etc., in October 2002, the world’s largest auction site eBay acquired PayPal for US$1.5 billion.

PayPal PYPL Logo

Paypal (PYPL):

In fact, it is wrong to call Paypal to do PayPal. PayPal is just a branch of Paypal in China. It is two independent websites. Paypal is Paypal. There is currently no Chinese name. Don’t get confused.

PayPal is an online payment service company established by Shanghai NetPay Information Technology Co., Ltd. and PayPal. PayPal only accepts RMB business in China (because RMB is not a freely convertible currency). In recent years, due to the rapid rise of Alipay under Alibaba , the development of PayPal in China has not been smooth.

PayPal Holdings, Inc. operates as a technology platform company, making digital and mobile payments on behalf of consumers and merchants worldwide. PayPal’s platform allows consumers to make purchases by sending payments, withdraw funds to their bank accounts, and hold balances in their PayPal accounts in various currencies.

In addition, PayPal Holdings also provides a gateway service that enables merchants to accept payments online using credit or debit cards.

So far, PayPal Holdings’ payment solutions include: PayPal, PayPal Credit, Braintree, Venmo, Xoom, and Paydiant.

History of Paypal:

  • In December 1998, Paypal was born;
  • In October 2002, Paypal committed to eBay with US$1.5 billion and became the latter’s main payment tool;
  • In August 2014, PayPal acquired Braintree, a mobile payment company, for US$800 million in cash (in 2013, Braintree acquired Venmo for US$26.2 million);
  • On March 3, 2015, PayPal acquired the electronic wallet company Paydiant for US$290 million;
  • On June 27, 2015, eBay’s board of directors agreed to spin off PayPal. Investors who hold shares of eBay will receive 1 common share of PayPal for each common share of eBay. These PayPal shares will be issued on July 17, and PayPal shares will be listed on the Nasdaq exchange under the PYPL stock symbol on July 20;
  • On July 2, 2015, PayPal acquired Xoom, a cross-border remittance company in San Francisco, USA for US$890 million, and entered the US$586 billion cross-border remittance market;
  • On July 20, 2015, Paypal landed on Nasdaq, officially split from eBay and listed independently, stock code: PYPL.
  • On February 18, 2017, PayPal and payment management company TIO Networks reached an agreement to acquire the latter for $233 million in cash. After the acquisition, PayPal’s service range has been expanded, and its users can pay utility bills and TV bills at grocery stores such as Lai Aide (a chain of American pharmacies). In 2016, TIO processed a total of $7 billion in bills for 14 million users, covering 65,000 retail locations. Their goal is to make the bill more reasonable and make the payment process more convenient. At the time of the Internet boom, TIO Networks was listed on the Toronto Stock Exchange. In recent months, its stock price was 25% lower than the purchase price. PayPal’s final bid was $2.56 per share, and the transaction is expected to be completed later this year. PayPal has long been more than just the online checkout company when it was founded. Currently, it owns the money transfer application Venmo and acquired Braintree, making money by processing application payments for companies such as Uber and Airbnb. In 2015, PayPal separated from eBay. More than a year has passed. Now PayPal’s scale is much larger than the latter, with a market value of 51 billion US dollars. In the past year, the company’s stock price has risen 21%.
  • On May 18, 2018, PayPal spent US$2.2 billion to acquire iZettle, a Swedish startup peer, to expand the coverage of in-store payment services. The latter has already submitted an IPO prospectus.
  • On June 4, 2018, PayPal acquired Jetlore, a developer of artificial intelligence (AI) retail systems.
  • On June 20, 2018, PayPal spent $400 million to acquire HyperWallet, a group payment platform.
  • On June 25, 2018, PayPal spent US$120 million to acquire Simility, an anti-fraud risk management platform, to strengthen its related security functions.

Advantages and disadvantages of Paypal:

Paypal advantages

  • Protect the payer.
  • Supports multiple currencies and can be exchanged instantly (but a 2.5% handling fee is charged).
  • The People’s Republic of China collects 1.5% + USD 0.3 from users in the People’s Republic of China. Non-USD cannot enjoy it.
  • Personal account collection is free, but this discount has been cancelled in 2012, that is, all account types are charged uniformly.
  • Free cash withdrawals from US banks and Hong Kong banks.
    • U.S. bank withdraws dollars
    • Hong Kong banks are free of charge for more than 1,000 Hong Kong dollars, and 3.50 Hong Kong dollars for less than 1,000 Hong Kong dollars. You need to convert the currency to Hong Kong dollars first, and you will lose the cost of conversion.
  • Cash withdrawal methods in other countries are: wire transfer (charged at 35 dollars), check (charged at 5 dollars, but there is a risk of mail loss, the same fee is also charged for returned checks, and bank collection also requires additional fees, which are actually higher than wire transfers ), PayPal does not allow payment to others to withdraw cash, and there is a risk of being frozen.
  • There is a 60-day reversal period after payment. After the buyer pays, the buyer can initiate a complaint about not receiving the goods within 45 days; the buyer can also initiate a dispute if the product received by the buyer does not match the description at the time of purchase.

Disadvantages of Paypal:

  • The information is strictly reviewed, and the account will be frozen if wrong information is provided.
  • There are many restrictions on payees: If you suddenly receive a payment from an unknown source, it will be restricted by PayPal as a suspicious payment, and you will be asked to explain the source of the payment. If the explanation is not accepted by PayPal, it will be frozen.
  • It takes a long time to unfreeze and requires a lot of private information.
  • Collection fees are high, domestic 2.4%-3.4% + 0.3 US dollars, foreign 2.9%-3.9% + 0.3 US dollars.

How to withdraw cash from Paypal for Chinese users:

  • ( Recommended cash withdrawal method by Home of American Stocks ) Free cash withdrawal from PayPal to Payoneer virtual US account and Payoneer MasterCard prepaid card. Generally, the account can be received within 2 days, and then you can take the Payoneer card to withdraw the RMB from the domestic bank ATM. However, it should be noted that the above only said that paypal withdrawal is free. Payoneer reissues a new card at $12.95, an annual fee of $29.95, and each deposit is charged 1%. ATM withdrawals or point of sale/bank counter cash expenditures are charged at $3.15 each time, plus Exchange rate conversion 3.5%. The withdrawal fee is actually more expensive than wire transfer
  • Withdrawal to domestic banks in China is a more practical way. Currently, 13 banks in China can support PayPal withdrawals. PayPal charges a fixed fee of $35. The failure refund fee is $15. The wire transfer method is fixed. The amount of US$1,400 for US$35 is equivalent to the 2.5% exchange fee charged by Hong Kong banks. It is best to withdraw by wire transfer over 1400. Mainland Chinese banks have a limit of US$50,000 per year. Hong Kong banks have no restrictions.
  • Withdrawal through Hong Kong banks, a 2.5% conversion fee will be charged for the conversion of US dollars into Hong Kong dollars, free of charge for HKD 1,000 or above, and HKD 3.5 for those below HKD 1,000. The refund fee for failed withdrawals is HK$20. Withdrawing cash through a Hong Kong bank is a more convenient, cheap and fast way. The popular online China Merchants Bank two-location card has been discontinued in 2012, and it has been split into two cards, the China Merchants Bank Card and the Hong Kong Merchants Bank Card. In addition to China Merchants Bank, Bank of China, Industrial and Commercial Bank of China, Bank of Communications, and Construction Bank all allow mainlanders to apply for Hong Kong accounts in the Mainland, and they can also open an account in Hong Kong for about 2 days. However, Hong Kong accounts generally charge an annual fee, free of charge for current accounts of more than 100,000 yuan, and about 60 Hong Kong dollars if they are insufficient, plus the exchange rate of Hong Kong dollar to Renminbi. Of course, it is more cost-effective to use the Hong Kong dollar directly, and it is suitable for people who often go to Hong Kong to spend.
  • Withdraw cash to a local bank in the United States, but you need to open an account in the United States in person, and provide proof of residence, social security number, and driver’s license. It is difficult for non-Americans to open an account.
  • If an application for a check is collected through an intermediary bank, it will increase the cost of withdrawal, and there is a risk of mail loss, which is not cheaper than wire transfer.

Paypal account type:

  • Personal account -for buyer users who shop online

It is mainly used for payment and can be collected, but compared with advanced or corporate accounts, it lacks some necessary functions and features for merchants, such as: multiple filtering functions for viewing historical transaction records, merchant rate, website integration, quick checkout and other integrations Tool, so sellers are not recommended to choose.

  • Premium account -suitable for individual merchants who shop online or sell online

You can make payments, receive payments, and enjoy merchant rates, use website payment standards, quick checkout and other integrated tools, and centralized payment functions to help merchants expand overseas sales channels and increase sales. It is recommended for individual sellers who conduct cross-border transactions.

  • Corporate account -suitable for businesses operating in the name of a business or group, especially business users who use corporate bank accounts to withdraw cash.

It has all the merchant functions of a premium account. It can set up multiple sub-accounts, which is suitable for large-scale merchants. Each department sets up a sub-account to collect payments. In addition, the corporate account needs to add a wire transfer bank account opened by a company name for transfer, and a personal name opened Wire transfer to bank account may cause the transfer to fail.

1. When the customer pays, the payee’s name is different.

2. PayPal corporate accounts can set secondary accounts with different permissions.

3. A PayPal premium account can be upgraded to a corporate account by adding business information at any time, and a corporate account can also be downgraded to a PayPal premium account at any time.

Differences between Paypal and Alipay:

  1. PayPal is a global currency. Common currencies are Canadian dollars, Euros, British pounds, U.S. dollars, Japanese yen, and Australian dollars. Alipay is Chinese and settled in RMB.
  2. PayPal is the policy of protecting buyers, while Alipay is biased towards the policy of sellers. In other words, PayPal considers the problem from the buyer’s point of view. Any dissatisfaction of the buyer can raise a dispute, and the seller cannot get the money. However, Alipay will pay off if the time limit expires.
  3. PayPal is an organization that classifies members and charges fees for accounts. Of course, the protection of benefits is more reliable. Alipay does not have this level.
  4. The high complaint rate of the paypal account will cause the account to be permanently closed, so the seller is very cautious. Alipay will not close the account easily.
  5. Paypal funds can be withdrawn to the bank in the United States, and in China can be wire transfer to the bank, both of which require handling fees. Alipay directly withdraws to the bank without handling fees.
  6. From the above, it can be concluded that Paypal’s profit model is to charge transfer fees (2.9%-3.9%+$0.29) and other service fees, while Alipay uses a pool of funds to engage in investment and other financial services for profit.

Paypal (PYPL) investment:

I have been using Paypal for more than 10 years. During this period, I have been blocked more than one account. Sometimes I can only use one word to describe “inexplicable”. Chinese users belong to Xia San Lu in front of them, which is a high-risk area for cheating. , Once the account is blocked, you can only wait 180 days for wire transfer to return the money in the account. The account is permanently blocked and there is basically no possibility of unblocking.

If you use Paypal, you know how dark their charges are ^_^! But there is no way. Many online banks that are commonly used on the Internet have closed down, such as: e-gold, stormpay, Liberty Reserve, etc. At present, there are only Skrill, Paypal, WebMoney and other companies that can transfer money globally. The focus is different, and there are often no elections, and Americans recognize this.

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