Analyzing an Organization - Paypal

Analyzing an Organization

Paypal

PayPal is a company, based in San José, California, which operates a worldwide online payments system. Online money transfers, which can be effected via email, serve as electronic alternatives to traditional payment methods like checks and money orders. PayPal is one of the largest companies for internet payments in the world. It serves as an acquirer, that performs payment processing for online vendors, auction sites and other commercial users, for which it charges a fee. Its European headquarters is in Luxembourg and its international headquarters is located in Singapore. Paypal was established in 1998 and had its stock market launch in 2002. It became a wholly owned subsidiary of eBay later that year. 2014, PayPal moved $228 billion in 26 currencies across more than 193 nations, generating a total revenue of $7.9 billion. The same year, eBay announced plans to spin-off PayPal into an independent company by mid-2015 which was completed on July 18th 2015.

One of the reasons for the split was the competitive landscape for online payments. PayPal is used to the constantly rising number of newcomers who try to get a foothold in the market. It already has serious competitors, such as Square and Visa. However in September 2014 Apple announced plans for his own online payment system, Apple Pay, which enables people to let their wallets at home and pay for everything with their Iphone. Apple is in a strong position thanks to their loyal fans. Ebay and Paypal hope that seperate businesses will give Paypal the focus it needs to stay ahead of this new competitor. The most important reason is, however, that eBay and Paypal are completely different companies, operating in very different markets, each with their own strategic priorities. PayPal's revenues are increasing twice the sum of eBay's, however its environment is more competitive and rapidly changing. This split allows each company to focus on their strategy instead of...