PayPal – An Early History of How it All Began
PayPal originated in the United States as a solution to a new problem caused by the burgeoning popularity of the growing phenomenon of the age – the internet. In the 1990s, this new creation was just beginning to open up the potential of open communication and trade between individuals and businesses anywhere on the planet. An online market place had already been created in order to facilitate this new possibility. The success of eBay was almost immediate, but it was being held back from even further prosperity by one major practical problem – the issue of payment.
The issue here was twofold: one of swiftness and the other of trust. Back in the dying days of the 20th Century, online transactions could be paid for by credit or debit card. This was fine for purchases from businesses, but for transactions between individuals, it was totally impractical. Individual sellers did not want to go to the trouble and expense of opening a trader’s account with the big financial operators like Visa and MasterCard, even if it were possible. And in any case, no-one would sensibly give their personal banking details to some unknown person, possibly on the other side of the world.
This led on to the second problem – that of trust. The only practical ways of making a payment between individuals was by sending cash (not a good idea) or a cheque. But this involved the buyer trusting that the vendor would actually send the goods. Plus the vendor would need to assume that the buyer’s cheque would not bounce. The alternative was to wait for the funds to clear before despatch. However, this would take at least a week at the time, which would really slow down the transaction when speed was one of the supposed advantages of the new online market. If only there was a way to guarantee transfer of funds quickly and securely without the need for this lengthy delay…
PayPal was the first service to really take off as a solution to this problem. Only at the very beginning, PayPal was really just an idea which needed to be turned into reality…
The service was first imagined by a company established in 1998, called Confinity. Early in the year 2000, the company was merged with X.com, a rival technology firm founded by Elon Musk, who immediately saw the potential in the fledgling service. Elon has gone on to become one of today’s richest men, but at the time was relatively young and unknown.
Early in 2001, X.com was renamed PayPal after its new service. It was already taking off as the ideal solution to eBay’s payment problem, being used in a very large proportion of its transactions. Around a quarter of sales were completed using PayPal at that time, with close to three quarters of all eBay’s private listings offering it as an option. Indeed, so successful was the new service that in 2002, Musk was able to take PayPal public, raising over $60 million in the process. Each share was valued at $13.
Yet even this significant sum appeared just chicken feed later the same year, when eBay itself decided to bring the new service it relied on in-house. It paid around $1.5 billion, which is not a bad return for Elon from just a few months’ investment.
And the rest, as they say, is history. PayPal is no longer under the ownership of its former eBay masters, but has gone on to become the most popular form of electronic online payment today. Meanwhile, its original sponsor, Elon Musk is now one of the most famous business tycoons on the planet. He is the billionaire owner of a variety of innovative technology companies. These include Tesla, the electric car manufacturing firm, and SpaceX, the space technology company already responsible for sending satellites into orbit and astronauts to the International Space Station.
PayPal – How does it work?
PayPal is a way to transfer funds electronically, swiftly and securely. It is an ideal way to make a deposit at an online casino because it acts as a guarantee that the buyer receives the goods or service paid for, and that the vendor receives due payment for the merchandise or service provided.
From the customer point of view, you can register for the service by visiting the PayPal website at paypal.com. Once at the site, click or tap on ‘Sign Up’, then select ‘Personal Account’ and click or tap ‘Next’. All you have to do then is provide your e-mail address and choose a password. You are then required to fill out a short form containing personal details like your home address and phone number.
And that’s it – your account is created. Of course, you do have to actually provide proof of funds before you can actually make a payment using PayPal, and you can do this by linking a bank debit or credit card to your new PayPal account.
Note that you don’t have to load your account with any money in advance to use PayPal. Instead, PayPal charges your chosen linked account whenever you use it to make a payment online. When you select PayPal at the online checkout, you will be directed to PayPal over an encrypted connection, where you input your password to authorise the transaction. It is at this point that PayPal will draw on funds from your credit or debit account. Your personal bank details are never disclosed to the vendor, so it is a very secure way of making payments.
It’s also a very inexpensive way to pay. There are no charges for using PayPal to make a deposit, nor is there a charge for uploading funds when you make a payment. Instead, PayPal charges a small commission to the vendor when they accept your payment. There is also no fee for United Kingdom based account holders for withdrawing funds from PayPal to a personal bank or card account.
The only time a fee is charged when making a PayPal payment is when the transaction involves a currency conversion. This fee can vary. At the time of writing, charges range between 2.5% and 4% depending on the actual currencies involved.
PayPal remains the world’s favourite form of electronic payment. It is available for use in more than two hundred countries across the world, and payments can be made in any of around twenty five currencies. Look out for the PayPal logo at the checkout at any Progress Play casino.