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PayPal Holdings, Inc.

legal form Incorporated
ISIN US70450Y1038
founding 1998
Seat San Jose , California , United States
United StatesUnited States 
Number of employees 23,200 (2019)
sales 17.772 billion USD (2019)
Branch Financial services
As of December 31, 2019

PayPal [ peɪˌpæl (] listen ? / I ) ( Engl. , Literally payment friend , similar to pen pal, pen-pal ) is a listed operator of online payment service , which in satisfaction of middle and small amounts, for example, the purchase and sale in the online -Trade can be used. According to its own information, PayPal has more than 277 million active users in over 200 markets with the option of payments in over 100 currencies (as of March 2020). The company is based in San José and the European subsidiary is PayPal (Europe) S.à rl & Cie, SCA , based in Luxembourg . Audio file / audio sample

PayPal was a subsidiary of the US company eBay from 2002 until it was spun off on July 17, 2015 ; since then the shares have been traded on the NASDAQ . The company is part of the S&P 500 and replaced the former parent company eBay in the S&P 100 .


The PayPal account is a virtual account: the identity of the account is defined by the PayPal member 's email address, so there is no account number . The account can be used to make payments to and receive payments from third parties. PayPal acts as a service provider for the transfer. PayPal does not take on the function of a trustee , that is, it only takes over the payment processing, regardless of the service provision by the seller.

An elementary advantage of PayPal - as well as of other micropayment systems - is that payments made via PayPal are immediately credited to the payee , thus eliminating the usual bank transfer time , for example . Purchases made in an online shop can therefore be paid for very quickly. This shortens the delivery time if the seller sends the goods promptly after receipt of payment.

If PayPal is used to pay for an online shop, PayPal collects transaction data that goes beyond the scope of a normal transfer. If the online shop transmits this data to PayPal, this includes a. the delivery address and the individual items in the shopping cart.

PayPal members need to register with their personal information; a bank account or credit card is not essential. If the PayPal member adds a bank account, PayPal carries out a test transfer to the specified account to verify it. After that, PayPal members can send money to any email address in the supported countries. If the owner of the e-mail address does not have a PayPal account, PayPal will notify him by e-mail that a payment has been received at this e-mail address. In order to have access to the amount sent, the payee must be registered with PayPal or register as a new member.

Furthermore, PayPal can be used via a web-enabled mobile phone . The support of web-enabled pagers and other handheld devices depends on the authenticity of the assignment to PayPal members. A technology called “PayPal Here” also simplifies payment processes for smartphone users: Similar to the cash register in the supermarket, the credit card is pulled over a small attachment that is connected to the headphone output of the device. Checks can also be photographed using the camera built into the smartphone. The US company Square is already using a similar process.

The information of the participants is protected with TLS with every transfer . The financial data of the PayPal member, such as the credit card or account number , remain hidden from the payee, which is intended to prevent misuse of this data by the payee.

To send money to another participant with PayPal, there are several deposit options :

  • You can send money directly from a PayPal balance. In Europe, for example, the PayPal account can be topped up with a credit via normal bank transfer using a specific deposit code. The account-specific code provided by PayPal must be entered in the " Purpose " field of the transfer. It usually takes about three days to top up via bank transfer, but sometimes it takes significantly longer.
  • A credit card can also be used for payment. The money does not have to be paid into the PayPal account first, but is withdrawn from the credit card account and credited to the recipient.

There are further payment options for German PayPal accounts:

  • It is possible to make direct debit payments from your own account. In this case, the amount will be immediately credited to the payee's PayPal account and PayPal will debit the amount from the payer's bank account within the next few days.
  • Furthermore, some payments are only possible via direct debit with a security check . If the amount is successfully debited by PayPal from the payer's bank account, the value date will take place after receipt of payment on the PayPal account of the payee.
  • Payments via bank transfer bypassing the top-up process are also possible. A transaction-specific code is specified here. If the transaction-specific code is entered in the "Purpose" field of the transfer, the value will be entered after the transfer has been received on the payee's PayPal account.
  • It is also possible to transfer money to your PayPal account using giropay . Via a special top-up portal or via the “Pay in with giropay” option directly in the PayPal account, credit can be topped up directly using the online giropay transfer. The advantage over a normal bank transfer is that the credit is available on the PayPal account immediately after the successful giropay transfer and - as is usual with giropay - the transfer is completely pre-filled. Topping up with giropay is free for PayPal customers.

Withdraw credit from German PayPal account (transfer to reference account):

  • A credit balance on a German PayPal account can be transferred to the German reference account stored in the PayPal account. According to PayPal, the direct debit amount will be credited to the bank account within two to four working days. According to PayPal, the credit may take up to seven working days. Only after seven working days does customer service deal with credits that have not arrived. For faster debiting of the credit, PayPal introduced a real-time transfer with costs in October 2019 .

The receivables management has PayPal the Hamburg office in Germany ksp. Lawyers transfer.

PayPal is one of the first major members of the FIDO alliance , which developed the industry standard Universal Second Factor (U2F) for generally applicable two-factor authentication .

Since November 2018, PayPal has been offering online merchants in Germany a "business loan" of up to EUR 24,999. In the USA, credit for online retailers was introduced in 2013 under the name "Working Capital". In 2014 it was introduced in Great Britain and Australia.

PayPal offers buyer protection. Unless the seller does this, PayPal will reimburse the purchase price including shipping costs for incorrect, defective, incomplete, damaged or counterfeit goods, for example. However, some items are excluded, including real estate and vehicles.

After the outbreak of the COVID-19 pandemic , PayPal started contactless payment via QR code in May 2020 .

Stationary trade

PayPal can also be used for payment in stationary retail via other apps . The Netto app has been offering this payment option since December 2018. Since March 2018 you can pay with PayPal at Shell. Furthermore, PayPal can also be linked to Google Pay .

Company history

PayPal headquarters in San José

PayPal goes back to the merger of Confinity and in March 2000. Confinity was founded in December 1998 by Max Levchin , Peter Thiel and Luke Nosek in Palo Alto , California . It was originally a payment methods and cryptography company for the Palm Pilot . Both Confinity and started their websites in late 1999. was founded by Elon Musk in March 1999, initially as an internet financial services company. Both companies had their offices on University Avenue in Palo Alto. Confinity's website was originally focused on reconciling beamed payments from Palm Pilots with payment via email as a feature.'s website initially included financial services with payment via email.

At Confinity, many of the first employees were former employees of the student newspaper "The Stanford Review", which was also founded by Peter Thiel. Most of the early developers came from the University of Illinois at Urbana-Champaign , where they were hired by Max Levchin. Elon Musk has recruited a wide variety of technical and business personnel for, including many closely linked to the company's success such as Amy Klement, Sal Giambanco, Roelof Botha, Sanjay Bhargava and Jeremy Stoppelman.

eBay observed the growth of a number of online payment companies and promised structural advantages for its customers as an online auction provider. In May 1999, before PayPal even existed, eBay bought Billpoint, renamed it “eBay Payments” and made it its official payment system, but curtailed Billpoint's functionalities by only allowing it for payment transactions for eBay auctions. However, PayPal was mentioned in auctions much more often than Billpoint. In February 2000, there were approximately 200,000 auctions a day promoting PayPal's service.

One explanation for the emergence and success of PayPal are the peculiarities of payment transactions in the USA. In the past, checks were mostly used there because of the ban on cross-state transfers in cashless payments , which are not suitable for the settlement of obligations from online transactions . In contrast, in Germany, for example, an invoice has been settled mostly by bank transfer for a long time . In international payment transactions, fees were and are charged that PayPal could undercut. It was only through the regulation of European payment transactions - international bank account numbers (IBAN) and SWIFT - that EU transfers became largely free of charge.

Acquired by eBay in 2002

In October 2002, eBay acquired PayPal for $ 1.5 billion. PayPal was previously the most popular payment method of more than half of eBay users, and the service rivaled eBay's subsidiary Billpoint. EBay then phased out its Billpoint service in favor of PayPal. Other main competitors were also discontinued or sold: Citibank's c2it service closed at the end of 2003 and Yahoo's PayDirect service closed at the end of 2004; Western Union announced the closure of its BidPay service in December 2005, but then sold it to CyberSource Corporation in 2006.

PayPal in Germany

A German-language PayPal website has been available since February 2004. PayPal was integrated into eBay in June 2004. After the initial phase of passive advertising, eBay introduced incentives (free payments and receipt of payments) in 2005, then all commercial sellers had to accept PayPal as a base payment method on eBay. As a result, the number of PayPal users in Germany has grown by leaps and bounds; In August 2013 PayPal had over 16 million customer accounts in Germany. PayPal users in Germany can pay by direct debit , credit card , online transfer (using giropay ) and credit on the PayPal account.

Since July 13, 2017, customers have been able to pay for their fuel directly at the petrol pump with their smartphone for the first time at participating Shell petrol stations in Hamburg and Berlin. The Germany-wide introduction of SmartPay in the Shell petrol station network is planned for the fourth quarter of 2017. In July 2019, PayPal launched Xoom, a service for international transfers, in Europe. Paypal launched Xoom across Europe in a total of 32 markets.

Luxembourg based in 2007 and European license

On July 2, 2007, PayPal received a banking license from the Luxembourg financial supervisory authority CSSF , which is valid for the whole of the EU in accordance with EU directives. All accounts were transferred to PayPal Luxembourg from PayPal (Europe) Ltd., which had previously been registered in Great Britain as an e-money institution . This also resulted in a revision of the terms of use. The change of the account from PayPal (Europe) Ltd. to PayPal Luxembourg took place automatically. The exact name of the new company is "PayPal (Europe) S.à rl & Cie, SCA".

In 2013, PayPal bought the payment service provider Braintree with its daughter Venmo , which was ahead of PayPal in the area of ​​transactions over social networks and between end-users of mobile devices.

Self-employment in 2015

Logo of PayPal Inc., replaced in 2014, designed by Chad Hurley

In September 2014 it was announced that eBay and PayPal were planning to separate their businesses into separate, independent listed companies. The separation took place on July 17, 2015.

End of partnership with eBay

At the beginning of February 2018, eBay announced that the cooperation with PayPal will only continue in its existing form until 2020. It should still be possible to process payments on eBay with PayPal until July 2023. Template: future / in 2 yearsThe internet auction house wants to establish Adyen as the new primary payment service provider by 2021 . After the announcement by eBay, the PayPal share suffered a price loss of 10%. In June 2019 it was announced that PayPal had acquired a stake in the Internet currency Libra . According to press releases at the beginning of October, PayPal will not participate in Libra after all.

Exclusion from online casinos

In early 2019, PayPal began banning online casinos from its offerings. 888 Holdings was among the first to remove PayPal from their payment options.

Takeovers and Cooperations

In May 2018, iZettle announced the acquisition by PayPal. In December 2018, the UK regulator, the Competition and Markets Authority, announced an investigation into the $ 2.2 billion deal. In April 2019, the UK regulator issued preliminary approval for the acquisition. In November 2019, PayPal announced that it would take over the American voucher code provider Honey for $ 4 billion. The acquisition was completed on January 6, 2020. In January 2020, PayPal also announced a cooperation with the Chinese payment service provider China UnionPay .

Key figures

Business and employee development (respective fiscal year)
GJ Sales
in US $ million
Balance sheet profit
in million US $
2012 5,662 778
2013 6,727 955
2014 8,025 419 15,800
2015 9,248 1,228 16,800
2016 10,842 1,401 18,100
2017 13.094 1,795 18,700
2018 15,451 2,057 21,800
2019 17,772 2,459 23,200


Payment is free of charge for the buyer, a substantial commission is only charged for the conversion into foreign currency; the account management itself is free of charge. The account itself is also free of charge for the seller, but there are costs for every money received via PayPal. These are made up of a basic amount per transaction and a percentage. There are two fee models, of which the second model for “micropayments” is rather unknown. The fees for receiving amounts in euros in Germany are 0.35 euros + 1.9 percent of sales (as of July 3, 2013), in Austria they are 0.35 euros + 3.4 percent of sales (as of: July 3, 2013) and in Switzerland at CHF 0.55 + 3.4 percent of sales (as of October 4, 2017). For amounts of 25,000 euros or more, the percentage in Germany drops to 1.5 percent, in Austria and Switzerland from 100,000 euros or 160,000 CHF in several graduations to up to 1.9%, for micropayments (up to € 3.50) 0 , € 10 + 10% of sales. The micropayment model is set for the PayPal account on request from support.

The costs are identical for all payment methods. Credit card payments can also be received by all account holders at no additional cost. The same conditions apply to private and business accounts, so there is no differentiation in terms of commissions between customer groups. The business account only has a larger range of functions for the more convenient management of payments. In addition, there is a conversion fee of 2.5 percent on the current exchange rate if a conversion takes place in another currency. Business account holders with a turnover of 5001 euros or more in the previous month can apply for tiered preferential conditions.

According to the terms and conditions, which came into force on November 18, 2013, transactions between personal accounts are free. This applies under the premise that there is credit on the PayPal account or that the collection is made by direct debit. If the standard PayPal account is linked to a credit card, a commission of 1.9 percent applies. (As of September 13, 2013)

Due to the revised Payment Services Directive , which came into effect on January 13, 2018, PayPal changed the terms and conditions on January 9, 2018. PayPal has banned merchants from passing PayPal fees on to their customers. This does not apply to companies that have contractually agreed a different practice with PayPal. On December 13, 2018, however, the Munich Regional Court I decided in the Flixbus case that the Payment Services Directive also applies to PayPal and that Flixbus should no longer pass any fees on to customers.


Data comparison with suspect lists from the US Department of Homeland Security

Reports appear again and again in forums and magazines that PayPal blocks the accounts of its users if there is even the slightest suspicion that the customer is engaged in terrorist activities, or if there is alleged suspicion of fraudulent activities. This also affects many innocent people who are then excluded from access to their credit. According to the 12/2006 issue of the computer magazine PC Professionell , PayPal's customer data is compared with lists of terrorist or drug trafficking suspects maintained by the US Homeland Security Agency. The similarity of the name with one entry is enough to be targeted by the US investigators. Under certain circumstances, the account will be blocked and the user will no longer get his money for a long time. Instead, they will be emailed to provide official proof of their identity and submit personal documents , including copies of ID cards and credit card or electricity bills, to an unspecified location in Omaha , Nebraska .

Blocking of accounts of related persons

Cases have also become known in which PayPal blocks both the account of the person concerned and that of a relative in the event of a conflict. According to German banking law, this linking of accounts is not permitted due to the relationship of the owners. Since the European PayPal subsidiary is subject to Luxembourg law, it emphasized that it was not a bank, but an Internet payment service for which different regulations apply.

Freeze the account for 180 days

PayPal can freeze the user account and the credit on it for 180 days and invokes violations of the 80-page general terms and conditions . Users report that PayPal blocked the account for no reason for a total volume of € 2500 or more and did not release the account even after all personal data had been transferred. Consumer associations have filed a lawsuit against PayPal. After the legal proceedings, PayPal committed itself to the Federal Consumer Association (vzbv) to omit numerous formulations in its terms of use.

Attempt to enforce the US embargo against Cuba in Europe

In July 2011, complaints arose from various European online retailers who deal in Cuban products, especially rum and cigars. Your accounts have been completely blocked and the account has been frozen. The company justified the decisions with a US trade embargo against Cuba from 1962. After an ultimatum to remove the goods from the range, the block took place. The implementation of this embargo is illegal under EU law.

Terms and Conditions and GDPR

The German Federation of Consumer Organizations (vzbv) asked PayPal to submit a cease and desist declaration due to its general terms and conditions, since the size of 80 A4 pages meant that the terms and conditions were formally incomprehensible. Then and because of the DSGVO -Vorgaben updated Paypal Terms & Conditions and Privacy Policy.
Here, Paypal grants itself the right to save the fingerprint and location data as well as information on all installed apps. The aim is to recognize account accesses that do not match the location and to play in advertising that is appropriate to the location and interests. Carola Elbrecht ( Vzbv ) sees this as violating the GDPR. Saving and processing biometric data basically requires the express consent of the user.
PayPal emphasizes that users can change their mobile device settings to limit this storage.

Web links

Commons : PayPal  - collection of pictures, videos and audio files

Individual evidence

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