PayPal Holdings Inc.
Case Analysis
- Introduction
1.1 Brief History
During the 1990s the world experienced a digital revolution as computers and the Internet became modern staples. This transformation led to radically new ideas such as the digitation of money, which enticed two pioneers in the industry to form their own companies. Elon Musk (founder of Tesla and SpaceX) began his career as co-founder of X.com, which was one of the first online banks, and Peter Thiel (venture capitalist and board member of Facebook) began his career by forming Confinity, which was a cryptographic payments company. The merger of these two companies led to the creation of PayPal in 1998. Months after going public for the first time, eBay acquired PayPal for $1.5 billion to be the primary payment method of transactions on its online marketplace. Under eBay’s umbrella, PayPal operated as a separate company with the right to make its own decisions. With this freedom, PayPal continued to develop its services, partnerships, and make important acquisitions. As eBay and PayPal continued to grow, they agreed to split because it would be more opportune for both companies to pursue partnerships separately rather than combined as a corporate family. After the split, PayPal continued business as it had in the past—independently.
1.2 Mission and Purpose
PayPal’s mission is to “build the web’s most convenient, secure, cost-effective payments solution, with the purpose of democratizing financial services, “so that managing and moving money is a right for all citizens, not just the affluent” and empowering “people to exercise this right and improve financial health”.1 To accomplish this mission and purpose, PayPal has a top management team in place to help lead the way.
1.3 Leadership Team
Dan Schulman, the CEO, has extensive experience in the mobile and online payment services area, working previously as Group President for American Express. Bill Ready, the COO, is responsible for product, technology and engineering. PayPal acquired his startup, Braintree, for $800 million. John Rainey, the CFO, oversees the company’s financial health and growth. He was previously the CFO at United Airlines. Louise Pentland, the Chief Business Affairs and Legal Officer, ensures regulatory compliance and is responsible for leadership development and other HR initiatives. Evidently, PayPal has a competent management team in place.
1.4 What PayPal Does Best
In its early stages, PayPal was a rudimentary yet novel money service, which allowed users to send money through mobile phones using email. Now, PayPal excels in providing online money and payment solutions to consumers and merchants through its platforms including PayPal, PayPal Credit, Braintree, Venmo, Xoom, and Paydiant. The company’s use of mobility and technology allows everyone with a digital device to transact worldwide, anytime.