PayPal Spreads Its Wings
‘Less than three years after eBay acquired it for $1.5 billion, PayPal aims to bust out of its parent’s confines. Even giant eBay, after all, accounts for less than 10% of all e-commerce, so there’s a much bigger opportunity outside. So far, PayPal has signed up a variety of independent merchants to offer its service, from small fry such as Saylor’s Pizza in Hendersonville, Tenn., to big fish like retailer Overstock.com (OSTK ) and Apple Computer’s (AAPL ) iTunes Music Store. And it’s quickly moving overseas, opening local Web sites in eight countries in the past year. The goal, says PayPal President Jeff Jordan: “We want to be the standard for online payments.”
It’s a grand ambition. After all, PayPal made its name helping eBay sellers, often too tiny to qualify for a conventional credit-card merchant account, avoid the time and risk of waiting for paper checks. Buyers click on a PayPal link, and they’re whisked to their account at PayPal. The service draws money from any of several sources buyers have chosen — credit or debit card, checking account, or PayPal account, where they can keep funds from auction sales. Although PayPal is legally just a money transfer agent like Western Union Financial Services Inc. (FDC ), it’s more like virtual plastic to consumers and merchants.’
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