Levchin et al, April 28, 2000.
PayPal Holdings, Inc. is an American company operating a worldwide online payments system that supports online money transfers. PayPal is one of the world's largest Internet payment companies.
PayPal was established in December 1998 as Confinity, a company that developed security software for handheld devices. It was founded by Max Levchin, Peter Thiel, Luke Nosek and Ken Howery. PayPal was developed and launched as a money transfer service at Confinity in 1999, funded by John Malloy from BlueRun Ventures. In March 2000, Confinity merged with X.com, an online banking company founded by Elon Musk.
This patent titled 'System and Method for Electronically Exchanging Value Among Distributed Users' was filed on the 28th of April, 2000. The first named inventor is Max Levchin and the author describes this invention as a "a system and method for facilitating a value exchange transaction".
In Founders at Work, Levchin talked about how the original idea was to send money between Palm Pilot's using state of the art crypto technology. Thiel and Levchin soon realised though that the enterprise adoption of these devices wasn't happening quickly enough. So they decided to move into email payments which was a much easier medium to exchange value given the wider adoption of email at the time.
The payment provider really took off when they introduced a $10 sign up bonus for all new users. This viral hook first took off with niche eBay buyers and sellers and soon started to cannibalise other incumbent payment services that were much slower to process funds.
With this traction, Levchin and the team took Paypal public in 2002 under the ticker PYPL. Shortly after PayPal's IPO, the company was acquired by eBay in July 2002 for $1.5 billion.
As of 2016, PayPal operates in 202 markets and has 188 million active, registered accounts processing billions of dollars every month. Not bad for a derivative idea that was spun out from the founder's original vision to change the face of electronic payments, clearly captured in the schema diagram of this limited edition patent print.
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