The above graph represents PayPal transaction revenue by year. As the graph shows, a whopping 90.6% of PayPal’s total revenue in 2019 came from the transactions completed on its Payments Platform. The company’s transaction revenues hit a record-high of $16,099 million, with 17% YoY growth. The growth was primarily driven by the growth in TPV and the number of payment transactions.
PayPal Revenue from Transactions: History
|Source||PayPal Annual Reports|
|Note||PayPal fiscal year starts from January 1st|
PayPal describes its transaction revenues as the net transaction fees charged to its merchants and consumers on a transaction basis which primarily based on the volume of activity, or TPV, completed on Payments Platform.
In 2012, the annual revenue of PayPal from transactions surpassed $5 billion or $5,028 million for the first time. It took 5 years for the company to set another revenue record. In fiscal 2017 PayPal’s revenue from transactions crossed $10 billion mark for the first time. The total transaction revenues increased an appreciable 20% YoY to $11,501 million (~12 billion), globally.
Founded in December 1998 as Confinity Inc., by Max Levchin, Peter Thiel, Luke Nosek, and Ken Howery, PayPal Holding Inc. (NASDAQ: PYPL) was funded by John Malloy from BlurRun ventures.
However, it was March 2000, when Confinity merged with X.com, an online banking company founded by Elon Musk in November 1999. The visionary Musk was quick to visualise the future potential of the money transfer business Confinity was developing. In contrast to that, Bill Harris, the then-president and CEO of X.com, didn’t find much merit in Musk’s thoughts. Soon, Harris decided to part ways was Musk was determined to stay focused on Confinity money transfer service. He was so committed that he terminated the company’s all other Internet banking operations in order to remain focused on the money transfer business.
All these shifts created an impact on Elon Musk’s position in the company he was replaced by Peter Thiel as CEO of X.com. In the following year, the X.com was renamed as PayPal.
The astounding growth of PayPal convinced executives to launch the IPO of PayPal in 2002. After the celebrated acquisition by eBay Inc. (NASDAQ: EBAY) in July 2020 which valued PayPal $1.5 billion – 7% above the IPO price – it was clear that PayPal is en route to become a global leader in money transfer business.
After thirteen years of being under the umbrella of eBay, PayPal once again became an independent publicly traded company.
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