Money, Money, Riding PayPal Around the World!

The world is more interconnected than ever these days. You can go virtually to any place in the world with the means currently available. You can go by boat, land vehicle, or airplane.  Inventions and innovations have made these all possible.

Communication too has made the world ever smaller. We have the landline phone and the cell phone to provide communication on the go for the masses.  The internet has made the world a smaller place, we not only communicate by typing and voice, but we can even have video.

This trend has also happened in the world of finance. Before you could do telegraphic transfers that usually involved the same bank or correspondent a bank and you needing to physically go to the bank to execute the transaction. Then came the remittance services which enable you to transfer money from one location to another. Again you had to go to a physical location to execute the transaction.

One company has successfully used the internet to execute funds transfers. This company is PayPal. While your initial transaction may involve opening up an account with an accredited bank, the rest of the transaction can be done through the internet.  This has made the lives of millions of people much easier. With your email address you can do a host of financial transactions.

PayPal is an online payment company founded in 1998.

Not only has this made things easier, but it has also opened up new opportunities. With PayPal, even small sized companies or individuals can do cross country payment transactions, without the hassle of having to go to a bank or a remittance center.  Online auctions also benefit from the service PayPal brings, which eventually led to PayPal being purchased by Ebay for a cool $1.5 billion in 2002.  Its stated annual revenue was $3.4 billion in 2010 and represents close to 40% of Ebay’s annual revenue. This was not a bad purchase.

Like any institution that has grown large, PayPal has had its share of controversies.  There are quite a number of websites dedicated to inform people about what’s wrong with PayPal. It also got hacked when it closed the account of Wikileaks.

The vast majority of clients know the convenience and security this service provides. It does charge fees; it is a business after all.  It’s continued existence and profitability is a testament to its success. Why is it successful? As one who uses it, I know why it’s successful. It works!