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News
PayPal gets wings,
makes mobile play
pon spinning off from parent company
eBay Inc., PayPal Inc. signaled it wants to
become dominant in the mobile payments
U space. "Mobile technology is transforming
payments, making it easier, safer and more affordable
for people to move and manage their money than ever
before," said PayPal President and Chief Executive
Officer Dan Schulman in a July 2015, statement. "As an
independent company, we see tremendous opportunity
for PayPal to expand our role as a champion for con-
sumers and partner to merchants, and to help shape the
industry as money becomes digital at an increasingly
rapid pace."
PayPal, which re-listed on the NASDAQ exchange
on July 20, was founded in 1999 to facilitate online
payments. The company was listed on NASDAQ until
October 2002, when it was acquired by the online
auction giant eBay, for $1.5 billion. eBay has since
helped to fund much of PayPal's expansion. PayPal
became involved directly in merchant services in 2004
with the launch of the iTunes Store; eight years later, in
May 2012, it began supporting in-store payments with
PayPal Here. In 2006, PayPal introduced its support for
mobile payments using SMS technology. Soon after, it
received a banking license from Luxembourg.
Strategic acquisitions
More recently, eBay purchased four companies with
mobile payment capabilities to bolster PayPal in
preparation for its spinoff. These are: Venmo, a licensed
money transmitter; Braintree, an online merchant
acquiring firm that previously owned Venmo; digital
remittance company Xoom Corp.; and Paydiant Inc., a
cloud-based mobile wallet platform.
Immediately following its return to NASDAQ trading,
PayPal heralded a deal with TransferTo, which
specializes in mobile prepaid top-ups. The arrangement
allows Canadians to pay for mobile airtime using their
PayPal accounts. In a post on the online investment
research platform Seeking Alpha, LN Investors stated
PayPal was ready to expand in the mobile payments
space. Describing the recent acquisitions, LN wrote,
"With this kind of firepower, I'd say the competition
had better watch out for an unleashed PayPal."
Visa Inc. CEO Charlie Scharf said in a call with analysts
that he isn't concerned about PayPal posing a competitive
threat. "[W]e actually don't spend a lot of time thinking
about what PayPal is doing," he said. Scharf also said
PayPal relies on Visa processing rails for a large number
of the payments it handles.
12
PayPal gets wings,
makes mobile play
pon spinning off from parent company
eBay Inc., PayPal Inc. signaled it wants to
become dominant in the mobile payments
U space. "Mobile technology is transforming
payments, making it easier, safer and more affordable
for people to move and manage their money than ever
before," said PayPal President and Chief Executive
Officer Dan Schulman in a July 2015, statement. "As an
independent company, we see tremendous opportunity
for PayPal to expand our role as a champion for con-
sumers and partner to merchants, and to help shape the
industry as money becomes digital at an increasingly
rapid pace."
PayPal, which re-listed on the NASDAQ exchange
on July 20, was founded in 1999 to facilitate online
payments. The company was listed on NASDAQ until
October 2002, when it was acquired by the online
auction giant eBay, for $1.5 billion. eBay has since
helped to fund much of PayPal's expansion. PayPal
became involved directly in merchant services in 2004
with the launch of the iTunes Store; eight years later, in
May 2012, it began supporting in-store payments with
PayPal Here. In 2006, PayPal introduced its support for
mobile payments using SMS technology. Soon after, it
received a banking license from Luxembourg.
Strategic acquisitions
More recently, eBay purchased four companies with
mobile payment capabilities to bolster PayPal in
preparation for its spinoff. These are: Venmo, a licensed
money transmitter; Braintree, an online merchant
acquiring firm that previously owned Venmo; digital
remittance company Xoom Corp.; and Paydiant Inc., a
cloud-based mobile wallet platform.
Immediately following its return to NASDAQ trading,
PayPal heralded a deal with TransferTo, which
specializes in mobile prepaid top-ups. The arrangement
allows Canadians to pay for mobile airtime using their
PayPal accounts. In a post on the online investment
research platform Seeking Alpha, LN Investors stated
PayPal was ready to expand in the mobile payments
space. Describing the recent acquisitions, LN wrote,
"With this kind of firepower, I'd say the competition
had better watch out for an unleashed PayPal."
Visa Inc. CEO Charlie Scharf said in a call with analysts
that he isn't concerned about PayPal posing a competitive
threat. "[W]e actually don't spend a lot of time thinking
about what PayPal is doing," he said. Scharf also said
PayPal relies on Visa processing rails for a large number
of the payments it handles.
12
