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By Sonya Rabbitte, 5 February 2002 17:41

NEWS E-payment company Paypal is to IPO on Nasdaq this Thursday in a move that could raise the company up to $81m. The company plans to issue 5.4 million shares of between $12 and $14, which should fetch a minimum of $63m and a maximum of $81m. Despite recent turbulent market conditions the company has grown steadily in the past year, posting a three-fold increase in revenue for the quarter ending 31 December. Revenue jumped from $10.2m in the previous quarter to $30.1m. Despite the failure of other internet payment methods such as Beenz and Flooz, Paypal was confident enough to file an IPO offering with the SEC just weeks after 11 September. In the filing the company said it will use the capital raised to fund expansion into new markets, including Europe. The company started in 2000 with 12,000 users and by the quarter ending 30 September 2001 it had 10 million. During the same period revenue grew from $14.46m to $104.83m, although loss has grown at a corresponding rate, hitting $107.8m in the 2001 fiscal year. In a bid to curb loss and boost revenue, it introduced credit card transaction fees for all customers last November, after previously charging only on high value transactions. Paypal customers now pay 2.9 per cent on all credit card transactions. In contrast, international epayment company Worldpay charges a 4.5 per cent fee on low value transactions. But Worldpay COO David Sear claims customers benefit from his company's ability to process transactions in 110 different currencies. US companies, such as Paypal which processes transactions only in US dollars, will need to adopt an international focus, if they hope to succeed in Europe, Sear said. "The US market is more mature, growth is slowing down, so for Paypal to expand they will have to move out of that market. But conditions outside of the US are more complex from the point of view of language and currency. Paypal will find a lot of complexity there. "But they wouldn't be IPOing if they didn't think they could grow quickly." Salomon Smith Barney will underwrite the IPO.