Paypal Outline Simple - Lizi Chen PDF

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Leila Deluty Paypal Outline ● General information and history about the company and its history ○ Founded in 1998 by two major business technology entrepreneurs, Peter Thiel and Max Levchin. ○ Originally named “Confinity” not Paypal. ○ This company believed in easy, paperless payment for customers and companies through the internet. ○ The main idea of this company was for users to sign up, provide their name and personal information, and then be able to make quick payments through email for a very low cost. ○ The company became very popular and successful extremely quickly, and they eventually renamed it Paypal when the founders decided to focus mainly on making payments over the internet. ○ Ebay and Paypal split into two different companies in July of 2015, but still agreed to keep a close relationship until mid-2020. ● Business category, markets, and products (what is the company in the business of doing, what do they sell, what do they do well and how do they make money) ○ Paypal deals with online easy payments from business to consumers. ○ Originally they were focused on payments through email, but then realized that the internet, businesses, and their consumers needed a platform the support their “ewallets” ○ Paypal made paying online easy and quick, by customers supplying their name, credit card, and email address, and having them be able to pay with a click of a button. ○ They make money two different ways ■ They charge fees to the payment recipient, merchants with business or premier accounts are charged a fee for each of their transactions. ■ The second way is that the company earns interest for any money that is left sitting in a user’s account. ● Size (revenue, rankings), # of employees, major locations, headquarters, major divisions ○ In 2019 its revenue was 17.77 billion dollars and ranked 204th on the 2019 Fortune 500 of the largest United States corporations by revenue. - PayPal Wikipedia ○ PayPal currently has 286 million active users ○ Paypal has around 22,000 employees ○ PayPal's corporate headquarters are located in the North San Jose Innovation District of San Jose, California

○ operations center is located in Omaha, Nebraska ○ Paypal had expanded tremendously and has has 47 office locations across 27 countries ○ Subsidiaries are Venmo, Xoom Corporation, Honey, Braintree, iZettle ● Mission statement and company objectives/goals (what is it and how are they achieving it) ○ Mission- “Build the web’s most convenient, secure, cost-effective payment solution, build the web’s most convenient, secure, cost-effective payment solution” ○ Vision- “Democratize financial services” ○ Tagline-“There’s a New Money in Town; Paypal is New Money”. ○ “PayPal's mission and vision is that every person has the right to participate fully in the global economy, and that we have an obligation to empower people to exercise this right and improve financial health” ○ “As a leader in Financial Technology, we believe in providing simple, affordable, secure and reliable financial services and digital payments that enable the hopes, dreams and ambitions of millions of people around the world.” ○ “We believe that now is the time to reimagine money, to democratize financial services, so that managing and moving money is a right for all citizens, not just the affluent.” ■ https://www.paypalobjects.com/digitalassets/c/website/marketing/global/s hared/global/media-resources/documents/paypal-mission-visionvalues.pdf ○ Paypal wants to make the field of online payments fair and available for all, not just the wealthy and the upper class. Rather, they want to redefine the online consumer business relationship, with their easy and affordable payment method. They are reliable, dependable, and easily accessible to all ● Competitor analysis (who are their competitors and what kind of competition is it and what threat do their competitors pose) ○ Some competitors are Stripe, Square, Shopify Payments, Amazon Pay, and Braintree ○ They are all online payment forms that each offer different similar functions as paypal. Some have their own companies and offer different things than paypal ■ Stripe is a quickly developing startup that even verges on equaling that of PayPal. ● PayPal funds are stored in your PayPal account and not paid out directly to your bank account. However, after the first Stripe transaction, revenue will transfer directly to your bank account after a purchase is made. ■ Square - Square Point is an app where employees record their start and end times of work and set up direct deposit. In addition to its use for payroll it can also provide loans to small businesses, where the business has the option to pay back the loan using a percentage of daily sales made through the app itself.

● The primary contrast between the two is that the PayPal card peruser acknowledges chip, contactless AND attractive stripe cards, while the referenced Square Reader just acknowledges chip and contactless installments . ■ Shopify has lower preparing charges Shopify Payments acknowledges Visa, Discover, Mastercard and American Express. Installment subtleties are adjusted with each Shopify request, making it simple to take see information across the board place. ● The organizations have altogether different plans of action. PayPal brings in its cash from the expenses it gathers each time purchasers and shippers utilize its administrations for monetary exchanges. In the interim, Shopify sells cloud-based administrations that permit organizations to sell their own items and administrations on the web. ● 1-year stock analysis: stock prices and trend ○ 2020 stock analysis ■ On Jan 1 2020 a share in the stock market cost $110 and when the pandemic struck it plummeted to 85 dollars in March. Since the economy has been rebuilding itself, the stock price has now reached $185 reaching a much better amount than during the pandemic ■ PayPal stock reached a high during the summer months of the pandemic.

● Financial information (Sales, profit, trend of financial performance etc.) Compare the last 3 year’s financial information and report the financial performance changes (if any) For financial year 2019, Paypal revealed income of US$2.459 billion, with a yearly income of $17.772 billion, an expansion of 15% over the past monetary cycle. PayPal's offers exchanged at over $108 per offer, and its market capitalization was estimated at over $127.58 billion in December 2019. ○ PayPal Holdings annual/quarterly net income history and growth rate from 2013 to 2020. ■ net income for the quarter ending June 30, 2020 was $1.530B, a 85.91% increase year-over-year. ■ PayPal Holdings net income for the twelve months ending June 30, 2020 was $2.583B, a 2.91% increase year-over-year. ■ net income for 2019 was $2.459B, a 19.54% increase from 2018. ■ net income for 2018 was $2.057B, a 14.6% increase from 2017. ■ net income for 2017 was $1.795B, a 28.12% increase from 2016. ■ The all-time high PayPal Holdings stock closing price was 210.82 on September 02, 2020. ■ The PayPal Holdings 52-week high stock price is 212.45, which is 14.3% above the current share price. ■ The PayPal Holdings 52-week low stock price is 82.07, which is 55.9% below the current share price. ■ The average PayPal Holdings stock price for the last 52 weeks is 130.94.

● Current Business strategy (growth, downsizing, stability etc.) ○ Four Aspects to PayPal’s Current Growth Strategy: https://blog.euromonitor.com/the-four-aspects-of-paypals-current-growthstrategy/ - copy of strategies

■ “Always at the Centre of the Next Innovation- PayPal is always at the centre of the next payments innovation. The pioneer of the e-commerce space is now attempting to make inroads in other aspects, including both mobile and in-store payments. PayPal competes in virtually every corner of payments, from its popular online platform to plug-in devices that enable first-time card payments to the relatively new beacon technology that has the potential to revolutionise the entire consumer shopping experience. There are certainly not many companies in payments today that have the breadth and depth of PayPal’s current offerings. The payments space today is changing fast and for all the emerging payments options on the market today, PayPal has a product to compete. ■ Bridging Digital and Physical Commerce- PayPal aspires to be at the centre of virtually every payment transaction, whether it unfolds online when the consumer is sitting in front of a computer screen, via a mobile device when the consumer is on the go or in a physical retail store. It wants the end-consumer to opt for PayPal no matter the scenario. To do so, PayPal aims to build an agnostic platform that will allow retailers or software developers to leverage PayPal’s network programmes and hardware to create applicable products to capture these on-the-go payments. PayPal envisions consumers using a PayPal-enabled wallet for all payment transactions, regardless of if they occur through its popular online platform, via a mobile device or in a merchant’s bricks-and-mortar store. ■ From Digital Wallet to Mobile Wallet to No Wallet - For PayPal, it is not just about the shift from the leather wallet to the digital wallet on a mobile phone. In many cases, it is about no wallet at all. For PayPal, mobile payments or payments on the move are often not about the ability of the mobile phone to conduct a payment, but about the ability for consumers to make payments without having to rely on cash or plastic cards while mobile themselves. PayPal’s head of global communications went so far as in autumn 2012 to ask the media not to refer to PayPal as a “mobile payments or mobile wallet company, but just PayPal.” PayPal wants simply to be known as a commerce company. For PayPal, mobile payments or payments on the move is often not about the ability of the mobile phone to conduct a payment, but about the ability for consumers to make payments without having to rely on cash or plastic card payments while mobile themselves. ■ Re-Imagined Consumer Shopping Experience - Part of PayPal’s biggest bet is on creating an in-store experience in which frictionless payments become the cornerstone. PayPal hopes this experience will be a major

selling point for consumers who are still on the fence about executing payments through these new channels. Together, its revamped mobile wallet and the introduction of PayPal Beacon in autumn 2013 gave users insight into PayPal’s future vision. PayPal hopes that in time both merchants and consumers will recognise the value of its product line because of its ability to create a differentiated and frictionless payment experience across all channels, all devices and all methods of payments.”

● Management practices (How is the company structured. Policies? Hierarchy? etc.) ○ 2000-2002. Before Paypal was bought by Ebay, it had a simple and organized structure. ■ Peter Thiel was CEO ■ COO was David O Sacks and he was in charge of operations, product, and design. ■ CTO was Max Levchin and he was in charge of engineering ■ CFO Roelof Botha oversaw finance ■ EVP Reid Hoffman oversaw strategy and partnerships. ○ Marketing was originally part of the product group, but overtime it became its own group that was under the supervision of Sacks. ○ Customer service was based in Omaha, Nebraska and the other parts of the company were based at the headquarters in Silicon Valley. ○ The nature of the company was anti-meeting, based on individuality and priority. There were few groups of management and bureaucracy. People would propose their ideas and then consult their direct superiors and work within their units to execute their plans. ○ List of Current Roles in the Company ■ Daniel Schulman (President & CEO) ■ Steve Allocca (VP & General Manager, Global Gredit) ■ Eran Arbel (Head of Consumer Products) ■ Nicholas Beardsley (Global Strategic Partner Development) ■ Marc Elbirt (Principal Strategist and Product Lead) ■ Trent Adams (Director of Information Security) ● Marketing Practices (What kind of strategy do they employ? Cost/Quality/Niche?) ○ https://www.marketing91.com/6-advantages-segmentation/ ○ How much do they spend on it ○ Segmentation helps in grouping the market in smaller groups having same or similar taste/ preferences/ choices. Paypal uses psychographic and demographic segmentation strategy to target different customer segments. ○ Differentiating targeting strategy has been used by Paypal to address the changing needs of the customers. ○ It uses product class positioning strategy in order to create appropriate brand visibility in the different markets globally.

○ while PayPal continues to expand its user base via partnerships and focuses on monetizing Venmo's transaction volume, it's also rapidly becoming a notable venture capital investor in multiple e-commerce and fintech disciplines ● Current Issues and recent events affecting the company, either positively or negatively ○ During COVID 19 PayPal revenue shot up 22%. Even though this pandemic jeopardizes the country’s economy, this company remained as successful as it has ever been. ○ Paypal even accommodates its users during the pandemic by allowing lateness and flexibility in payments for small businesses. ○ Dan Schulman said on CNBC, ““We’re basically trying to give small businesses the flexibility to deal with the issues they have right now” during the pandemic. He added: “We’re one of the largest providers of working capital for small businesses, and we’re going to continue to provide that when we can.” ■ We see that even during a difficult time, the company cared not about their rising profits and revenue, rather on the people who make it as successful as it is. ■ Schulman stated that customers would be allowed to ask for deferrals on the payments needed for their business loans and cash advances. ○ Paypal users have been using online shopping and paypal everyday, as the amount of online shopping has skyrocketed due to the pandemic. ○ Even though other online forms of payment, like tickets for events and traveling have reached an all time low, that has not had an effect on paypal and how often it is used. ○ June has been one of the most important months for the growth of Paypal since it split from Ebay in July of 2015. ○ Between April and June, PayPal recorded $221.7 billion worth of user transactions on its platforms, up 29% year over year from $172.4 billion. The company also had its strongest user growth on record, adding 21.3 million new net active accounts in the quarter. - https://www.cnbc.com/2020/08/13/thepandemic-has-made-paypal-more-relevant-than-ever-before-ceo-says.html

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