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PayPal Holdings Inc. (PYPL) is a dominant player in digital payments through its web and mobile app payment platforms. It’s maintained its strong position against a rising number of fintech startups and technology giants such as Apple Inc. (AAPL) and Alphabet Inc. (GOOG).
The company provides digital payment services to 434 million account holders worldwide as of 2024 (latest information), enabling them to send and receive money, hold balances, withdraw funds, and perform other functions.
PayPal was first developed as a money-transfer service by startup Confinity Inc. in 1999. In 2000, Confinity merged with Elon Musk’s online banking site X.com, which later changed its name to PayPal before going public in 2002.
PayPal soon after was acquired by eBay Inc. (EBAY) for a reported $1.5 billion and remained part of the company for the next 13 years until it was spun off in 2015. In 2024, PayPal’s revenue was $31.8 billion on a total payment volume of $1.68 trillion. It has a market cap of $69.24 billion, as of March 19, 2024.
PayPal has made many key acquisitions to fuel its growth. In most cases, these deals have expanded PayPal’s customer base or its service offerings.
Together, these acquisitions have helped PayPal to sharply boost its payment volume, a key metric used by investors to measure the company’s health and progress. Below, we’ll look at five significant PayPal acquisitions. A special note that PayPal does not provide revenue and profit figures by subsidiary.
Key Takeaways
- PayPal is a dominant player in the digital payment services space with 434 million users worldwide, competing with the likes of Apple and Google.
- Since its founding, PayPal has made strategic acquisitions, such as iZettle, Xoom, and Honey, to grow its customer base and expand its services.
- PayPal continues to witness growth in revenue and users, indicating that its acquisitions have assisted in cementing the company as an important global payment service.
Honey Science Corp.
- Type of business: Online coupons and discounting
- Acquisition price: Approximately $4 billion
- Date it was purchased: Nov. 20, 2019
Honey is an online coupon and discounting company that provides a browser extension app that automatically applies coupons on e-commerce sites. Founded in 2012, Honey had more than 17 million members and provided more than $1 billion in savings to members since its launch when it was acquired in 2019.
At the time, the company had just expanded to offer a mobile shopping assistant, price-tracking tools, and other services. PayPal’s roughly $4 billion purchase of Honey was its largest acquisition ever. The acquisition fulfills a double goal: to streamline the online shopping and payment experience for PayPal customers and drive consumer engagement and sales for merchants.
iZettle
- Type of business: Payment processing
- Acquisition price: Approximately $2.2 billion
- Date it was purchased: Sept. 20, 2018
Sweden-based iZettle was founded in 2010 as a mobile credit card payment service. It also boasted the first-ever mini chip card reader. Over time, the company has grown to offer small businesses a gamut of services such as software support and financing solutions across Europe and Latin America.
iZettle is a major competitor of PayPal’s rival Square (owned by Block Inc.). PayPal acquired iZettle mainly to expand its in-store presence with small businesses to compete with Square, and to grow its presence in the European and Latin American markets.
Note
PayPal has entered the artificial intelligence space with new AI innovations focused on both merchants and consumers.
Braintree
- Type of business: Mobile payments
- Acquisition price: Approximately $800 million
- Date it was purchased: Sept. 26, 2013
PayPal parent eBay acquired Chicago-based Braintree for $800 million in cash in 2013, helping PayPal to become a global one-stop shop for merchant account services and payment processing.
Founded in 2007, Braintree has developed a payments gateway that powers and automates online payments for merchants and online businesses. The acquisition also included peer-to-peer mobile payments app Venmo, which Braintree had bought a year earlier. Braintree remained part of PayPal after its spinoff from eBay.
Xoom Corp.
- Type of business: Payment processing
- Acquisition price: Approximately $890 million
- Date it was purchased: Nov. 12, 2015
Founded in 2001, Xoom is an international payment processing company that allows users to send money, pay bills, reload phones, and accomplish other tasks for friends and family in other countries.
At the time of the deal, Xoom had more than 1.3 million active U.S. customers who used its platform to send international remittances totaling $7 billion annually. PayPal’s acquisition of Xoom helps it to expand into new markets worldwide, including building its remittances business.
Hyperwallet Systems Inc.
- Type of business: Global payouts
- Acquisition price: Approximately $400 million
- Date it was purchased: Nov. 15, 2018
Hyperwallet was founded in 2000 as a global payout company that provides small organizations with a seamless way to distribute funds to payees.
Hyperwallet’s unique platform allows companies to send and receive payments in any currency to nearly every country in the world. PayPal’s purchase of Hyperwallet represents a key move in the company’s growing efforts to streamline and enhance its e-commerce platform offerings.
PayPal Diversity & Inclusiveness Transparency
As part of our effort to improve the awareness of the importance of diversity in companies, we have highlighted the transparency of PayPal’s commitment to diversity, inclusiveness, and social responsibility. The below chart illustrates how PayPal reports the diversity of its management and workforce. This shows if PayPal discloses data about the diversity of its board of directors, C-Suite, general management, and employees overall, across a variety of markers. We have indicated that transparency with a ✔.
| PayPal Diversity & Inclusiveness Reporting | |||||
|---|---|---|---|---|---|
| Race | Gender | Ability | Veteran Status | Sexual Orientation | |
| Board of Directors | ✔ | ✔ | |||
| C-Suite | ✔ | ✔ | |||
| General Management | ✔ | ✔ | |||
| Employees | ✔ | ✔ | ✔ (U.S. Only) | ✔ (U.S. Only) | ✔ (U.S. Only) |
Who Are PayPal’s Biggest Competitors?
PayPal operates in the digital payments space and its biggest competitors include Stripe, Google Pay, Apple Pay, and Square. Apple Pay and Google Pay compete with PayPal in mobile payments for smartphones. Stripe and Square compete in the business payment space, such as in point-of-sale systems.
Does Elon Musk Still Own PayPal?
No, Elon Musk does not own PayPal. Musk was a co-founder in what was the predecessor to PayPal, X.com, which later became PayPal. He sold his shares when PayPal was bought by eBay in 2002 and has not been involved in the company since.
How Many Acquisitions Has PayPal Made?
PayPal has made a total of 27 acquisitions with the average acquisition amount being $1.1 billion. Its two most active acquisition years were 2018 and 2021 when it made five acquisitions in each of these years.
The Bottom Line
PayPal is a leader in digital payment services and has reached this position by expanding its services and making strategic acquisitions. The company has steadily grown its reach and capabilities from its early days as a startup, partly due to the key acquisitions.
Acquisitions like Honey, iZettle, and Braintree have helped PayPal improve the shopping experience, strengthen its presence in global markets, and improve payment processing.
