PayPal is a leading e-commerce business, which specializes in money transfers and online payments. PayPal allows businesses and consumers to send and receive money online at a low cost, as well as being fully integrated as a payment option for web shops. PayPal has over 230 million registered users worldwide, making them one of the biggest e-commerce businesses in the world.
Being fully integrated as a payment method, PayPal is one of the most popular payment options on the online auction site eBay, who is also the owner of PayPal. PayPal has over 650 web shops directly integrated as a payment method, but many more businesses offers PayPal as a payment option. In total more than 150,000 businesses have registered in PayPal's merchant program.
History of PayPal
PayPal was originally founded in 2000 by the company Confinity, but was sold to X.com only 2 months after its release. In 2001 PayPal was integrated as a payment method on eBay and PayPal grew rapidly, having more than 1,000,000 users using PayPal on eBay.
In 2002 PayPal became the first dot-com company to be offered on the stock exchange after the September 11th attack in USA. With the company being listed on the stock exchange, eBay saw their chance to purchase their most popular payment method and bought PayPal for $1.5 billion.
With the purchase of PayPal, more than 50% of all eBay auctions had PayPal as their chosen payment method, despite eBay offering more than 10 other payment options.
By 2008 PayPal had over $60 billion in total transactions and continued to grow every year. With the enormous amount of money being paid, PayPal needed to ensure that they were not being used as money laundering tool and decided to buy the Israeli company Fraud Sciences for $169 million. With the acquisition of Fraud Sciences, PayPal could easier detect and track money laundering and ensure more safety for its customers.
By 2012 PayPal handles payments for a total of $145 billion and have yearly revenues of $5.6 billion, making them the leading e-commerce business in the world.
PayPal and Online Gambling
In the early years of online gambling, PayPal was a widely accepted payment method for gambling sites both for deposits and withdrawals. In recent years, fewer sites accept PayPal as a payment method, as Americans cannot use their service to fund gambling accounts and European players have better gambling related e-wallets available. PayPal has never been made for online gambling, but rather for online shopping which also is a major factor in the decision from sites to stop accepting the method.
The reason American players cannot use PayPal to fund their gambling account, despite being allowed to use PayPal, is because of the Unlawful Internet Gambling Enforcement Act (UIGEA) bill passed by the American Congress in 2006. The bill made it illegal for gambling sites as well as payment processors to accept American player deposits for gambling.
Some bigger online casino sites such as 888 still accept PayPal as a payment method, catering to the recreational players that use PayPal as their preferred online shopping wallet.
US Friendly Casinos and PayPal
PayPal is not a widely accepted payment method for US friendly casino sites, due to the UIGEA bill that made it illegal for sites to accept American players. PayPal decided to follow the bill and stopped allowing gambling sites to accept money from Americans. Some US friendly casinos still accept PayPal as an option if you contact them directly, where you will be asked to send the money to a private PayPal account. This option is not optimal as you have to trust the site 100% in order to be sure you will actually receive the money in your account.
In the future PayPal might become a widely accepted payment method again, with the recent legislations in New Jersey and Las Vegas. With more and more states legislating gambling, making it legal in the US, PayPal may be able to become a legal payment method and become the favorite choice for American players to fund their accounts.
If PayPal becomes a legal payment method for Americans, there is no doubt they will be the most used e-wallet for Americans as most Americans are familiar with how PayPal works.