Potential buyers opened PayPal accounts which were linked to a credit card or a bank account alternatively, money could be deposited in the account, where it earned interest until it was needed for a purchase. The PayPal system was launched quickly online. dollar was PayPal's medium of exchange email, which virtually everyone shopping online used, along with banking networks, comprised its medium of transfer. PayPal, on the other hand, relied on existing, universally accepted institutions. Merchants were reluctant to accept a new, unproven currency consumers hesitated to give up their tried and true dollars for currency no one might ever accept.
However, despite costly giveaway promotions, these e-currency companies encountered massive walls of resistance from both consumers and merchants. Other companies-most notably and -were trying to establish themselves in the electronic payment field at the time, launching new electronic currencies they hoped would replace the dollar as the medium payment on the Internet. What electronic business lacked, according to Levchin and Thiel, was a simple, convenient payment system tailored specifically for the World Wide Web, a system that would enable a person to email money to someone else. Sales on eBay, the online auction site, to name one of the most successful examples, were being paid for by checks and money orders sent through the regular U.S. The tide turned when the two partners realized that no means of electronic payment had been developed to handle the buying and selling that was starting to boom on the Internet. PayPal met with just as little interest as Field Link had. The company was renamed Confinity, and in October 1999, with six employees and two computers, it launched PayPal, a service by which money could be sent electronically by handheld devices. Unfortunately, what seemed to be a good idea in theory evoked next to no response from consumers.
#PAYPAL LOGO HISTORY SOFTWARE#
Levchin and Thiel joined forces, obtained $3 million in backing from the Nokia Corporation, relocated to Silicon Valley, and opened Field Link, a firm which produced encryption software for handhelds. The two met in 1998 when Levchin approached Thiel in New York for financial backing for a company that would develop a system for transferring money using such wireless devices as cell phones and palm pilots.
The company which later became PayPal was founded by Max Levchin, an online security specialist, and Peter Thiel, a hedge fund manager. Its user base that year included 10.2 million personal accounts and 2.6 million business accounts in 39 countries. PayPal handled approximately $3.1 billion in payments in 2001, with an average daily volume of about 189,000 payments totaling $9.6 million. PayPal users make payments securely online using credit cards or bank transfers, as well as by maintaining funds in personal interest-bearing PayPal accounts. By obtaining a PayPal account, consumers and businesses may send and receive payments vie e-mail. PayPal Inc., a subsidiary of online auctioneer eBay, Inc., provides users with a means of exchanging funds via the Internet, a revolutionary step in the development of electronic commerce.
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