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Paypal Holdings, Inc.
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About Paypal Holdings, Inc.

PayPal transacts millions of payments at digital speed. The company enables individuals and merchants to electronically transfer money via numerous methods, with payments originating from a customer's bank account, credit card, or PayPal account. PayPal is a giant in the online payments industry with around 280 million active accounts and nearly 25 million merchant accounts across more than 200 markets. It earns fees from payment transactions, foreign exchange, and withdrawals from foreign bank accounts, as well as from interest on customer balances and PayPal-branded credit and debit cards. The firm processes approximately 12.4 billion payment transactions a year. The US accounts for more than half of PayPal's total revenue.


PayPal depends on transaction fees, which account for about 90% of the company's business, for revenue. Secondary activities through value-added services generate the other 10%.

PayPal oversees a global technology platform that links its customers – both merchants and consumers – so they may digitally exchange payment for goods and services. Customers use computers, smartphones, bank accounts, credit cards, and other methods to originate and accept payment through the PayPal platform. In addition to its namesake PayPal service, the company's products include Xoom (secure online money transfer), Venmo (digital wallet service), Braintree (digital payment service integration), and iZettle (payment tool for small businesses).

The company provides value-added services with PayPal Credit and gateway services. PayPal Credit functions like a typical credit card though PayPal advances the credit. The gateway services unit includes Payflow and Braintree Gateway services and enables a merchant's website to link to its processing network and merchant account and enables merchants to accept online payments with credit and debit cards.

Geographic Reach

PayPal is based in San Jose, California and operates globally. About 55% of the company's revenue comes from the US, about 10% from the UK, and the remainder from the rest of the world.

The company's Xoom service allows overseas payments and deposits to and from bank accounts, mobile phones, and other accounts. PayPal customers can send payments in more than 200 markets across the globe and in more than 100 currencies, withdraw funds to their bank accounts in 56 currencies, and hold balances in their PayPal accounts in 25 currencies.

Sales and Marketing

PayPal aims its digital payment services to both ends of the transaction: consumers and merchants.

Advertising expenses totaled $399 million, $484 million, and $438 million for the years ended 2019, 2018, and 2017, and respectively.


Financial Performance

PayPal has realized strong financial performance over the past several years as consumer enthusiasm for buying things online shows no sign of waning and smartphones fuel growth in mobile payment. Between 2015 and 2019 the company almost doubled its revenue and its net income.

Net revenues increased $2.3 billion, or 15%, in 2019 as compared to 2018, driven primarily by growth in TPV of 23%. Net revenues from our acquisitions completed in 2018 contributed approximately one percentage point to the growth rate in 2019. These increases were partially offset by a decrease in interest and fee income due to the sale of our U.S. consumer credit receivables portfolio to Synchrony Bank in July 2018, which resulted in a negative impact of approximately four percentage points to the net revenues growth rate in 2019.

Net income increased by $402 million, or 20%, in 2019 as compared to 2018, due to an increase in operating income of $525 million and an increase in other income (expense), net of $97 million, driven primarily by net unrealized gains on strategic investments, partially offset by an increase in income tax expense of $220 million.

Cash and cash equivalents at the end of 2019 reached $15.7 billion. Cash from operations provided $4.6 billion, while investing activities used $5.7 billion. Financing activities generated another $3.7 billion.


PayPal's ability to grow revenue is affected by, among other things, consumer spending patterns, merchant and consumer adoption of digital payment methods, the expansion of multiple commerce channels, the growth of mobile devices and merchant and consumer applications on those devices, the growth of consumers globally with internet and mobile access, the pace of transition from cash and checks to digital forms of payment, the company's share of the digital payments market, and its ability to innovate and introduce new products and services that merchants and consumers value. PayPal's strategy to drive growth in business includes the following:

Growing core business: through expanding our global capabilities, customer base and scale, increasing customers' use of products and services by better addressing their everyday needs related to accessing, managing, and moving money, and expanding the adoption of the company's solutions by merchants and consumers;

Expanding value proposition for merchants and consumers: by being technology and platform agnostic, partnering with merchants to grow and expand their business online and in-store; and providing consumers with simple, secure, and flexible ways to manage and move money across different markets, merchants, and platforms;

Forming strategic partnerships: by building new strategic partnerships to provide better experiences for customers, offering greater choice and flexibility, acquiring new customers, and reinforcing PayPal's role in the ecosystem; and

Seeking new areas of growth: organically and through acquisitions and strategic investments in existing and new international markets around the world and focusing on innovation both in the digital and physical world.

Mergers and Acquisitions

Growth through acquisitions is an important element of Paypal's corporate strategy.

In 2020 the completed its acquisition with Honey Science Corp., which helps consumers find shopping discounts online, for $4 billion. Honey also helps retailers develop personalized offers for shoppers. Paypal intends to embed Honey into its apps to develop deeper engagement with its customers. The company also hopes to help merchants target new customer segments. After the acquisition closes, Honey is to retain its brand and headquarters in Los Angeles.

Company Background

Tech entrepreneurs Max Levchin, Elon Musk, Peter Thiel, Luke Nosek, and Ken Howery together founded PayPal in 1998 in Palto Alto, California with the idea of enabling consumers to make payments using email.

PayPal went public for the first time in February 2002. eBay acquired the payments network for $1.5 billion in October 2002. Under pressure from activist investor Carl Icahn, eBay spun-off PayPal in 2014. The company went public a second time in 2015.

Paypal Holdings, Inc.

2211 N 1st St
San Jose, CA 95131-2021
Phone: 1 (408) 967-1000

Firm Stats

Employer Type: Publicly Owned
Stock Symbol: PYPL
Stock Exchange: , NASDAQ
EVP and CFO: John D. Rainey
EVP and COO: William Ready
President and CEO: Daniel H. Schulman
Employees (This Location): 95
Employees (All Locations): 23,200

Major Office Locations

San Jose, CA

Other Locations

Cupertino, CA
Palo Alto, CA
San Francisco, CA
Chicago, IL
Lexington, KY
La Vista, NE
New York, NY
Austin, TX
Minato-Ku, Japan