PayPal.com's Business Model|IT and Systems|Case Study|Case Studies

PayPal.com's Business Model

            
 
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Case Details:

Case Code : ITSY040
Case Length : 18 Pages
Period : 1999 - 2004
Pub Date : 2004
Teaching Note :Not Available
Organization : PayPal.com
Industry : Online Finance
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Excerpts

Background Note

PayPal was founded by Peter Thiel (Thiel), a Stanford Law School graduate who was running his own hedge fund at that time, and Max Levchin (Levchin), a computer science graduate from the University of Illinois, who had developed software which enabled users to send money to other users through mobile electronic devices...

The Rising Popularity

In a matter of a few months, PayPal's popularity had risen significantly as it provided a fairly simple method for settling payments and allowed purchase of goods over the Internet. Becoming a PayPal member was much easier than signing up for an e-mail service...

IT and Systems Case Studies | Case Study in Management, Operations, Strategies, IT and Systems, Case Studies

The Business Model

PayPal had a simple business model. Any person could become a PayPal member by filling in a small application form and registering with PayPal at its website (www.paypal.com) by giving some personal details...

Types of Accounts
A user could open three types of accounts at PayPal's website (www.paypal.com) - personal account, premier account, or business account. Personal accounts were meant for individual users to send and receive cash and purchase items online...

The Transaction Process
The registration process for any type of PayPal account was simple. The user had to fill an online registration form, giving details like name, mail address, and telephone number...

Transfer of Funds
The transfer of funds from the sender to the receiver could happen in three ways and depended upon the mode of payment chosen...

PayPal's User Charges
PayPal did not charge a fee for customer-to-customer account transfers, which a significant portion of its account holders opted for...

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