The above graph represents PayPal transaction revenue by year. In fiscal 2018, PayPal generated about $13,709 million ($13.7 billion) in revenue from the transactions completed on its Payments Platform. That’s a notable 19% YoY increase. It is important to note that PayPal’s Transaction revenues accounted for a whopping 89% of the company’s total revenue in 2018. The rest is generated from other value-added services.
It was fiscal 2017 when PayPal’s revenue from transactions crossed $10 billion mark for the first time. The Transaction revenues increased by 20% YoY to $11,501 million (~12 billion), globally.
The growth in PayPal’s transaction revenue in 2018 and 2017 was driven by the growth in TPV (PayPal total payment volume) and in the number of payment transactions. In both, 2018 and 2017, PayPal’s total payment volume (TPV) grew about 27% YoY. While the growth in the number of payment transactions was 27% and 23% in 2018 and 2017, respectively.
PayPal Transaction Revenues: Additional Information
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.
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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