By Dan Ilett, 14 February 2006 13:35
NEWS
Internet shoppers have signed up for more than 100 million PayPal accounts, the company announced today.
PayPal, which in 2005 processed more than $27bn in payment volume and exceeded $1bn in profits, started its service in 1999. During that first year, customers created 12,000 accounts and the company saw $235,000 in total payment volume.
Jeff Jordan, president of PayPal, said: "We've spent the last seven years building a very easy way to pay online. Our customers use PayPal because they can shop online without sharing their financial information with sellers."
Last year analyst Gartner warned banks to sell PayPal payments to retail customers, instead of trying to compete with the online company - and said PayPal will outstrip traditional payment methods and online transactions.
Avivah Litan, the research director at Gartner who wrote the PayPal report, said retailers should embrace PayPal services rather than use "outdated" payment methods.
She said: "PayPal can beat credit card pricing because it blends credit card, bank account transfer and stored PayPal account value funding on the payer side, lowering PayPal's overall cost of funding any payment."
The Gartner report followed a new pricing strategy from PayPal that made it cheaper for people to trade goods under $3.
Comments
There is 1 comment. Join the discussion
1. Chael
Paypal would be more consumer friendly if it paid interest on the vast amounts in its current accounts.
Additionally, the fees paid to receive money are exhorbitant. I'm not surprised by their profit level. What I am astonished by is the fact that PayPal has an effective monopoly as the market is not sufficiently large to support more than one player; or why the anti-trust people have not stepped in.