PayPal one of the biggest startup during the initial Internet boom in the 1990s has been one of the companies that everyone has their eyes on. From being founded by the PayPal mafia (Founders who then became to start new companies who later were valued in million and 7 particularly in Billions like Elon Musks Tesla), to being sold to eBay and then again separated from eBay, PayPal is one of the most interested companies whose strategy our group found the most interesting.The Presentations talks about the Origin of PayPal, Competitors of PayPal globally and in India, its competitive advantage over other, Analytical tools like PESTLE etc, Major strategy change, eBay split off, Change in strategy and future strategies.

1. “Of the six people who started
PayPal, four had built bombs in
high school.”
Peter Thiel
(Co-Founder || PayPal Mafia)
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Strategic
Management
Group Number 11
Abhishek Malakar (PGP03003)
Masoom Modh (PGP03031)
Maulik Chaudhary (PGP03032)
Nihar Mehta (PGP03035)
Prince Sharma (PGP03045)
Vaishnavi Deshpande (PGP03060)

2. 131450000000$
That’s the amount of transaction alone in 2017
15% growth (Over 2016)
Total success!
Total
227000000 users
That’s a lot of active users
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3. Origin and evolution of PayPal
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1998 Peter Thiel and max Levchin launch Fieldlink later renamed Cofinity
1999 PayPal first appears as an online demo that allows people to email
payments in US dollars.
2000 Reaches 1m users after changing its payment systems to enable eBay
payments.
2001 X.Com changes its name to Paypal
2002 eBay buys PayPal for $1.5bn, just eight months after the online payment
provider’s initial public offering.
2004 PayPal becomes a payment option on the UK site of eBay, resulting in a
300 per cent jump in PayPal revenues to $1.4bn
2007 Granted an EU banking licence
2010 PayPal launches apps for the iPhone and Android-powered devices
2012 Mobile payments more than treble year-on-year, to $14bn
2014 eBay announces plans to make PayPal a separate business in 2015.

4. International Competitors
● Google wallet
● WePay
● 2Checkout
● Authorize.net
● Skrill
● Intuit
4
Indian Competitors
Payment gateways:
● CC Avenue
● CitrusPay
● PayUMoney
● InstaMojo
● DirecPay
Mobile Wallets:
● PayTM
● MobiKwik
● Oxigen Wallet
USPs of PayPal over its
competitors
● Leading in mobile
● No trouble in copying what
works
● Not wasting its time with
mobile wallets
● Not bothered about how you
use its service

5. Competitive advantage
• First mover advantage: Launched in 1998.
• Large Network: 169 million users, more than 10 million
merchants, and more than two-thirds of the 100 largest
online retailers.
• Adaptive design: user friendly.
• Global presence: As of 2017, PayPal operates in 202
markets and has 218 million active.
• Multiple currencies: PayPal allows the customer to send,
receive and hold funds in 25 currencies worldwide
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6. SWOT Analysis
S
TRENGTHS
W
EAKNESSES
OPPORTUNITIES
T
HREATS
• Highly safe and secured system of online
transaction supported.
• Secured & protected infrastructure.
• Serves more than 193 countries and
transacts in 26 currencies.
• Huge customer base of over 230 million
member accounts.
• PayPal follow anti-phishing policies for
user data protection
• Viral marketing – anyone receiving paypal
cash has to open an account
• Highly exposed to payment frauds and
risks.
• Faces allegations related to payment
transactions controversies.
• Strict local regulation and restrictions in
Japan, China, Brazil, Taiwan and India.
• Unpopular in emerging economies as
people are conservative about e-
transactions.
• To further expand in the market
of digital exchange.
• To further expand in cashless
commerce and economies.
• To further expand in e-business
through acquisitions.
• To add further convenience and
features
• To accept payments via mobile
text messages
• Stringent business regulations
and policies globally.
• Threats of data breach, frauds
and hacking
• Illegal charging for currency
conversion – Paypal and Israel
Credit Cards – Cal Ltd. paid NIS
16 million in June 2011 to
settle the claim
Negative
Internal
factors
External
factors
Positive
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7. Porter’s Competitive Model
Bargaining Power of
Buyers
• PayPal is the
most trusted leader
in market and
substitutes lacks in
performance too.
• Market has
competitors but
their services are
inferior
Potential New Entrant
Substitute Product
or Service
Intra-Industry Rivalry
• PayBox
• Industry is growing fast
• PayPal effectively meets
customers’ customization
demands
• Good experience causes
customers to pay willingly
• Limited information so
customers can’t negotiate easily
• Large number of customers
reduces the leverage of
bargaining and streamline
production process
• Strong base of
loyal customers
•Strong distribution
network
•Uses advance
technologies
Bargaining Power of
Suppliers
• Highly competitive
situations among suppliers
which force them to reduce
price which positively affects
PayPal to eventually reducing
its processing fee.
• Market leadership creates
low chances of switching
PayPal.
•Diverse payment modes and
channels
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8. TechnologySocialPolitical Economic EnvironmentLegal
•Political stability
and importance of
Credit Services
sector in the
country's economy.
•Bureaucracy and
interference in
Credit Services
industry by
government.
•Legal framework
for contract
enforcement
•Intellectual
property protection
•Trade regulations
& tariffs related to
Financial
•Pricing regulations
–Taxation - tax
rates and incentives
•Government
intervention in
the industry
•Exchange rates &
stability of host
country currency.
•Infrastructure
quality in Credit
Services industry
•Comparative
advantages of
host country
•Skill level of
workforce in
Credit Services
industry.
•Inflation rate
•Interest rates
•Demographics
and skill level of
the population
•Education level
•Culture
•Entrepreneurial
spirit and broader
nature of the
society.
•Attitudes
•Leisure interests
•Recent
technological
developments
by PayPal
Holdings, Inc.
competitors
•Technology's
impact on
product
offering
•Impact on cost
structure in
Credit Services
industry
•Impact on
value chain
structure in
Financial
sector
•Credit Services
industry
•Attitudes
toward and
support for
renewable
energy
•Anti-trust law in
Credit Services
industry and
overall in the
country.
•Copyright,
patents /
Intellectual
property law
•Consumer
protection and e-
commerce
•Data Protection
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9. Fruitful Strategies
× Merger of Confinity and X.com.
× Acquisiton by eBay
× Partnership with MasterCard in
2007
× Series of acquisitions to enhance
security and expand its consumer
base.
Strategies before 2009
Missed Opportunities
× Early days of powering
payments through
mobile-phones.
× No branching-out or
innovations
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10. Acquisitions
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Company
Acquired
Year Competitive Advantage
VeriSign
Payment
Solution
2005 Expanding its e-commerce business and
added security support
Fraud Sciences 2008 To enhance its fraud management systems
Bill Me Later 2008 Online payments company offering
transactional credits at 9000 online
merchants in the US

11. 11
Major Strategic Change
× Stronghold in Peer to Peer segment
× Increase in Number of Acquisitions
× Making new friends
× Customer choice
× Doing the smart thing

12. “It doesn't make sense that a
global payment system is a
subsidiary of an auction
website… It’s as if
Target owned Visa or
something.”
Elon Musk
(Co-Founder || PayPal Mafia)
12

13. PayPal & EBay Split
× Proposed in 2009 but idea dropped
× In 2014, PayPal Split up
× Increase competition in Mobile payment
× Shareholder pressure
× Overnight increase in value
× Different strategic priorities
× Stocks plunged by 8.1 per cent on that announcement
× After effect
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14. Place your screenshot here
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15. 15
PayPal’s Future Strategy
× PayPal's reach
× Small features increase engagement
× Build a brand
× Continue with Innovation
× Enter new markets with all services
× Grow organically
Financial Performance
× During 2017, Net revenue grew by 21%
× Increase in Goodwill amount by $280
Million
× Acquired 6 Firms including Xoom Corp.
× EPS 0.52 in Q4 of 2017, defying
expectations
× Valuation more than parent company, Ebay
× Spent $132 Millions in Restructuring
(2017)
PayPal’s Current Strategy
× Always at the Centre of the Next
Innovation
× Bridging Digital and Physical Commerce
× From Digital Wallet to Mobile Wallet to
No Wallet
× Re-Imagined Consumer Shopping
Experience
- Source: SEC Filing 2017

16. Thanks!
Any questions?
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