Who Owns PayPal?

PayPal was first founded in 1998; it was called Confinity (among its founders was Peter Thiel); later, it merged with X.com, its major competitor, founded by Elon Musk (which would become known for other companies like Tesla and SpaceX). From this merger, PayPal was born. In 2002, PayPal was bought by eBay for $1.5 billion. eBay spun off PayPal in 2015, which would be listed as an independent entity. Today PayPal owns brands like Braintree, Venmo, Xoom, and iZettle.

PayPal major shareholders

Today PayPal has become an empire in the fintech space.

Top institutional investors comprise mutual funds, like The Vanguard Group, owning 8.01% of PayPal. And BlackRock, owning 6.5$ of PayPal.
PayPal’s top individual shareholders in 2022 comprise people like Daniel Schulman, John Rainey, Mark Britto, Lousie Pentald, and Jonathan Auerbach.

The spin-off from eBay

The official spin-off of PayPal from eBay, as announced on eBay’s website (Source: eBay News).

As announced at the time:

In the distribution, eBay Inc. stockholders will receive one share of PayPal common stock for each share of eBay Inc. common stock held as of the close of business on July 8, 2015, the record date for the distribution.  Subject to the satisfaction of the conditions to the distribution, the distribution of PayPal common stock is expected to occur on July 17, 2015.  PayPal will not issue fractional shares of its common stock in the distribution.  Immediately following the distribution, PayPal will be an independent, publicly traded company and will be listed on the NASDAQ Stock Market under the ticker “PYPL.”  eBay will continue to trade on the NASDAQ Stock Market under the ticker “EBAY.”  

eBay’s core business is a platform business model that makes money from transaction fees through its marketplaces. In short, eBay primarily makes money by charging fees on successfully closed transactions. For instance, in 2021, on an $87 billion worth of gross merchandise value sold on eBay, the company generated $9.77 billion in transaction revenues at an 11.19% take rate (fee).

Interestingly, over time, PayPal was born as a side feature within eBay, and after it, was purchased by eBay, PayPal became more valuable than eBay.

In September 2022, PayPal had a market cap of over $100 billion, whereas eBay had a market cap of over $20 billion.

PayPal makes money primarily by processing customer transactions on the Payments Platform and from other value-added services. Thus, the revenue streams are divided into transaction revenues based on the volume of activity or total payments volume—and value-added services, such as interest and fees earned on loans and interest receivable. In 2022, PayPal generated over $27.5 billion in revenues and over $2.4 billion in net profits.

This is PayPal’s board of directors in 2022:


Below is the compensation mix as per PayPal’s financials:


History of PayPal

The story of PayPal is so interesting for a few reasons that we can summarize below.

The story of PayPal has so many events that seem improbable.

Two startups (Confinity and X.com) were two startups operating in the internet payment industry. Yet, while they were neighbors, they also recognized how different was each other’s vision.

Confinity had started to build a valuable company by looking at a narrow application (enabling payments through the PalmPilot).

X.com wanted to be a financial institution.

Those two companies not only had a fundamentally different visions.

They also had different philosophies regarding the underlying technological infrastructure they had developed (X.com leveraged the Microsoft stack, whereas Confinity leveraged Linux, an open-source software).

Eventually, those two companies ended up merging to become one, PayPal.

While both companies had some grandiose visions, the market also turned out in a direction none had foreseen.

Enabling email payments which were supposed to be a “side feature,” became the killer commercial application for both companies.

They also figured that their tools had become extremely relevant on eBay. This triggered an irreversible journey. Where both startups understood the path to growth, leveraged on virality to get there, and eventually decided to merge to tackle the market.

During this process, a new business playbook has been developed.

Today we give for granted, but it didn’t exist at the time.

This playbook comprised concepts like:

And entire business disciplines are based on growth marketing, network effects, and more.

That is why PayPal’s history is so instrumental to the commercial Internet.

The founding members of PayPal would go on to build many other valuable companies and found the next wave of the Internet, what we now call Web 2.0 or Web2.

Key Highlights

  • Foundation and Merger: Founded in 1998 as Confinity, later merged with X.com to become PayPal.
  • Acquisition by eBay: Acquired by eBay in 2002 for $1.5 billion, integrated into eBay’s marketplace.
  • Spin-off from eBay: eBay spun off PayPal in 2015, making it an independent entity.
  • Top Institutional Investors: Top institutional investors like The Vanguard Group and BlackRock own significant portions of PayPal’s stocks.
  • Key Individual Shareholders: Key individual shareholders include Daniel Schulman, John Rainey, and Mark Britto.
  • Revenue Sources: Revenue generated through customer transactions on the Payments Platform and value-added services.
  • Financial Performance: In 2022, PayPal recorded over $27.5 billion in revenues and $2.4 billion in net profits.
  • Merger and Growth: Merger of Confinity, focused on PalmPilot payments, and X.com, aspiring to be a financial institution.
  • Killer Application: Email payments became the killer application, driving PayPal’s growth.
  • Pioneering Strategies: PayPal’s history introduced key strategies like freemium, agile development, blitzscaling, and viral growth.
  • Growth Concepts: Pioneered concepts for growth marketing and network effects.
  • Founders’ Success: PayPal’s founders, including Peter Thiel, Elon Musk, Reid Hoffman, and Max Levchin, went on to build other successful ventures.
  • Startupland: Contributed to the growth of companies like Yelp, LinkedIn, Slide, Kiva, and SpaceX.

Related to PayPal

PayPal Business Model

PayPal makes money primarily by processing customer transactions on the Payments Platform and from other value-added services. Thus, the revenue streams are divided into transaction revenues based on the volume of activity or total payments volume—and value-added services, such as interest and fees earned on loans and interest receivable. In 2022, PayPal generated over $27.5 billion in revenues and over $2.4 billion in net profits.

PayPal Flywheel

PayPal is a two-sided marketplace which collects a transaction fee for each payment that happens via the platform. PayPal’s flywheel is based on creating a stronger and stronger network, where the company provides a suite of services to merchants, and consumers are given affordable digital payment solutions. In 2022, PayPal processed over $1.35 trillion in global payments.

PayPal Payment Volume

PayPal processed $1.36 trillion in payment volume in 2022, compared to $1.25 trillion in 2021—a growth of 9% year over year. In 2020, PayPal passed a trillion-dollar in payment volume, with $936 billion processed via the platform.

PayPal Revenue

In 2022, PayPal generated over $27.5 billion in revenue compared to over $2.4 billion in profits. Compared to over $25 billion in revenue and over $4.1 billion in revenue in 2021.

PayPal Revenue Breakdown

In 2022, of over $27.5 billion in revenue, over $25.2 billion came from transaction revenues. Thus, transaction revenue represented 91.6% of total revenue, while revenues from other value-added services (primarily comprising revenue earned through partnerships, interest and fees from merchants and consumer credit products, interest earned on certain assets underlying customer balances, referral fees, subscription fees, and gateway services) were over $2.3 billion, representing about 8.4% of PayPal’s total revenue.

How Much Does PayPal Charge

How Much Does PayPal Charge
On average, in 2022, PayPal charged a transaction fee of 1.85%, compared to 1.87% in 2021, and 2.14% in 2020.

PayPal Active Accounts


PayPal Transactions Per Active Users

PayPal Transactions Per User

PayPal Mafia

The PayPal Mafia describes a group of former PayPal employees and founders who have since become involved with other tech companies. While most know SpaceX founder Elon Musk’s association with PayPal, the company also has links with YouTube, LinkedIn, and Yelp, among many others. In addition to founding these generation-defining companies, the members of the PayPal Mafia are some of the richest men in Silicon Valley. 

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List of FinTech Business Models


Acorns is a fintech platform providing services related to Robo-investing and micro-investing. The company makes money primarily through three subscription tiers: Lite – ($1/month), which gives users access to Acorns Invest, Personal ($3/month) that includes Invest plus the Later (retirement) and Spend (personal checking account) suite of products, Family ($5/month) with features from both the Lite and Personal plans with the addition of Early.


Started as a pay-later solution integrated to merchants’ checkouts, Affirm makes money from merchants’ fees as consumers pick up the pay-later solution. Affirm also makes money through interests earned from the consumer loans, when those are repurchased from the originating bank. In 2020 Affirm made 50% of its revenues from merchants’ fees, about 37% from interests, and the remaining from virtual cards and servicing fees.


Alipay is a Chinese mobile and online payment platform created in 2004 by entrepreneur Jack Ma as the payment arm of Taobao, a major Chinese eCommerce site. Alipay, therefore, is the B2C component of Alibaba Group. Alipay makes money via escrows transaction fees, a range of value-added ancillary services, and through its Credit Pay Instalment fees.


Betterment is an American financial advisory company founded in 2008 by MBA graduate Jon Stein and lawyer Eli Broverman. Betterment makes money via investment plans, financial advice packages, betterment for advisors, betterment for businesscash reserve, and checking accounts.


Venmo is a peer-to-peer payments app enabling users to share and make payments with friends for a variety of services. The service is free, but a 3% fee applies to credit cards. Venmo also launched a debit card in partnership with Mastercard. Venmo got acquired in 2012 by Braintree, and Braintree got acquired in 2013 by PayPal.


Chime is an American neobank (internet-only bank) company, providing fee-free financial services through its mobile banking app, thus providing personal finance services free of charge while making the majority of its money via interchange fees (paid by merchants when consumers use their debit cards) and ATM fees.


Coinbase is among the most popular platforms for trading and storing crypto-assets, whose mission is “to create an open financial system for the world” by enabling customers to trade cryptocurrencies. Its platform serves both as a search and discovery engine for crypto assets. The company makes money primarily through fees earned for the transactions processed through the platform, custodial services offered, interest, and subscriptions.


Compass is a licensed American real-estate broker incorporating online real estate technology as a marketing medium. The company makes money via sales commissions (collected whenever a sale is facilitated or tenants are found for a rental property) and bridge loans (a service allowing the seller to purchase a home before the revenue from the sale of their previous home is available).


Dosh is a Fintech platform that enables automatic cash backs for consumers. Its business model connects major card providers with online and offline local businesses to develop automatic cash back programs. The company makes money by earning an affiliate commission on each eligible sale from consumers.


E-Trade is a trading platform, allowing investors to trade common and preferred stocks, exchange-traded funds (ETFs), options, bonds, mutual funds, and futures contracts, acquired by Morgan Stanley in 2020 for $13 billion. E-Trade makes money through interest income, order flow, margin interests, options, future and bonds trading, and through other fees and service charges.


Klarna is a financial technology company allowing consumers to shop with a temporary Visa card. Thus it then performs a soft credit check and pays the merchant. Klarna makes money by charging merchants. Klarna also earns a percentage of interchange fees as a commission and for interests earned on customers’ accounts.


Lemonade is an insurance tech company using behavioral economics and artificial intelligence to process claims efficiently. The company leverages technology to streamline onboarding customers while also applying a financial model to reduce conflicts of interest with customers (perhaps by donating the variable premiums to charity). The company makes money by selling its core insurance products, and via its tech platform, it tries to enhance its sales.


Monzo is an English neobank offering a mobile app and a prepaid debit card for consumers and businesses. It was one of the first app-based banks to enter the UK market, founded by Gary Dolman, Jason Bates, Jonas Huckestein, Paul Rippon, and Tom Blomfield in 2015. All were employees of Starling Bank, a similar neobank challenging the dominance of established financial institutions in England. The company enjoys many revenue streams: business and consumer subscriptions, interchange and overdraft fees, personal loans, and more.


NerdWallet is an online platform providing tools and tips on all matters related to personal finance. The company gained traction as a simple web application comparing credit cards. NerdWallet makes money via affiliate commissions determined according to the affiliate agreements.


Quadpay was an American fintech company founded by Adam Ezra and Brad Lindenberg in 2017. Ezra and Lindenberg witnessed the rising popularity of buy-now-pay-later service Afterpay in Australia and similar service Klarna in Europe. Quadpay collects a range of fees from both the merchant and the consumer via merchandise fees, convenience fees, late payment, and interchange fees.


Revolut an English fintech company offering banking and investment services to consumers. Founded in 2015 by Nikolay Storonsky and Vlad Yatsenko, the company initially produced a low-rate travel card. Storonsky in particular was an avid traveler who became tired of spending hundreds of pounds on currency exchange and foreign transaction fees. The Revolut app and core banking account are free to use. Instead, money is made through a combination of subscription fees, transaction fees, perks, and ancillary services.


Robinhood is an app that helps to invest in stocks, ETFs, options, and cryptocurrencies, all commission-free. Robinhood earns money by offering: Robinhood Gold, a margin trading service, which starts at $6 a month, earn interests from customer cash and stocks, and rebates from market makers and trading venues.


SoFi is an online lending platform that provides affordable education loans to students, and it expanded into financial services, including loans, credit cards, investment services, and insurance. It makes money primarily via payment processing fees and loan securitization.


Squarespace is a North American hosting and website building company. Founded in 2004 by college student Anthony Casalena as a blog hosting service, it grew to become among the most successful website building companies. The company mostly makes money via its subscription plans. It also makes money via customizations on top of its subscription plans. And in part also as transaction fees for the website where it processes the sales.


Stash is a FinTech platform offering a suite of financial tools for young investors, coupled with personalized investment advice and life insurance. The company primarily makes money via subscriptions, cashback, payment for order flows, and interest for cash sitting on members’ accounts.


Venmo is a peer-to-peer payments app enabling users to share and make payments with friends for a variety of services. The service is free, but a 3% fee applies to credit cards. Venmo also launched a debit card in partnership with Mastercard. Venmo got acquired in 2012 by Braintree, and Braintree got acquired in 2013 by PayPal.


Wealthfront is an automated Fintech investment platform providing investment, retirement, and cash management products to retail investors, mostly making money on the annual 0.25% advisory fee the company charges for assets under management. It also makes money via a line of credits and interests on the cash accounts.


Zelle is a peer-to-peer payment network that indirectly benefits the banks’ consortium that backs it. Zelle also enables users to pay businesses for goods and services, free for users. Merchants pay a 1% fee to Visa or Mastercard, who share it with the bank that issued the card.

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