It’s hard to believe that when PayPal was founded 20 years ago it was voted one of the worst ideas of the year. Created in 1998 by Elon Musk, the founder of Tesla Motors, and Peter Thiel, currently the head of one of the most profitable investment funds in the world, PayPal is now a $50-plus billion-dollar company and a true success story.
Through a mix of innovation in the internet retail sector, constructive purchases of competitors, and a solid business model, PayPal currently boasts an 83% market share in its industry. In 2017, the online retail sector generated over $400 billion in sales. PayPal was responsible for processing 18% of them. Ranked as the 193rd biggest public company by market value, PayPal is truly the world’s most successful FinTech and a pioneer of internet banking.
75% of US consumers who have a debit or credit card also have PayPal, and the demand to use the service appears to exceed the supply. PayPal continues to grow at a monstrous rate as it builds on its dominance, leaving any completion nearly non-existent. Here is a look at how PayPal dominates the internet banking world.
Usage & Customer Base
With 203 million active users from 202 countries, PayPal is the most used payment processor online. PayPal currently handles payments for 16 million merchant accounts and is active on 768,745 websites all over the internet.
What is even more phenomenal is the continued growth of the giant. In 2017 alone, PayPal added 6 million new customers to its base, a growth rate of 10.3% from 2016. The payments have grown as well with PayPal’s system seeing 22.5% more transactions over the same time frame.
PayPal is also truly a global entity, with 18,000 employees from 31 countries operating out of 56 offices worldwide.
In terms of usability, PayPal’s global network of customers can accept payments in over 100 currencies and can withdraw funds in over 50.
Dominance Over the Competition
The most telling sign of PayPal’s dominance is in its absolute decimation of its competitors. As mentioned, PayPal has an over 80% market share of its sector. Its next 5 closest competitors have a combined market share of less than 10%. That fact is also compounded by its impressive growth.
Every year PayPal experiences 10% growth compared to other payment services that only gain around 3%. When you put those two numbers together, it’s clear that PayPal is not only the most dominant force but is also bound to remain on top in the years to come.
Star-Studded Employee Alumni
Another part of the PayPal story that deserves a mention is the idea that “something must be in the cooler” over at PayPal. The people behind this FinTech seem to be a group of geniuses. Their dominance of the internet is not limited to internet banking but has carried over into other internet and industrial sectors as well.
People who were part of the PayPal team have also founded YouTube, LinkedIn, Yelp and Tesla Motors. One of its founders, Peter Thiel, is currently one of the biggest proponents of another revolutionary internet technology, Bitcoin. He has invested over $20 million into Bitcoin and is part of many think tanks working together to build on the blockchain technology.
With the sheer volume of billion-dollar startups founded by PayPal’s creators, it makes one wonder, what secret do these individuals have that make them such masters over various sectors of the internet?
It was the First of Its Kind, but It’s Not Alone
All these factors have played into the success of Paypal, much to the disbelief of many “influencers” in the the financial industry. But Paypal isn’t the only one. Bitcoin once received similar scepticism from the analysts and was considered “geek money” or a scam. Most people argued that no one would ever use it and it would have no place in the financial sector whatsoever.
Those same people, like the ones that once laughed PayPal out the door, are biting their lips in disbelief today. Perhaps that’s why it’s no surprise that two of Bitcoin’s biggest proponents are the very same Peter Thiel and Elon Musk, as mentioned earlier. The parallels between the two are enough for the wise to pay heed, Bitcoin is following in similar fashion its older cousin, PayPal, the biggest FinTech in the world right now.
PayPal is clearly the primary payment processor of the internet, and with the rising levels of internet sales and retail sectors, it’s fair to say it will be for the foreseeable future. PayPal dominates the internet banking realm and generates over $10 billion in revenue annually. With a great employee culture, solid management, and a product that was one of the first financial sector disruptors ever, PayPal is and always will be the world’s first successful mass market FinTech company.