Foreword
Today, when an eBay buyer clicks the PayPal logo to pay for their purchase with PayPal, they don't think twice. PayPal is so deeply ensconced in the day-to-day transactions on eBay that it has become second nature. Perhaps this is because they are now owned by eBay, or perhaps it's because PayPal was the first and the best in envisioning an online payment service.
When Pierre Omidyar formed eBay, it was based on the fact that there would be a level playing field for all: that the big guys would have no advantage over the little guy. But the “big” guys had a big advantage the little guy couldn't counter; they could accept credit cards from their customers. The little guy (most likely a home-based or part-time seller) didn't have the gross sales to qualify for a business merchant account to accept credit cards in payment for their goods, and most likely didn't have a profit margin large enough to allow for the percentage that would be charged.
The founders of PayPal were planning on “beaming money to the world” through the use of Palm Pilots (and all future PDAs). Their first transaction was a highly touted media event when $3 million seed money (from the venture investors at Nokia) was beamed to the Palm Pilot of PayPal founder Peter Thiel in 1999. Here was born the nugget of the idea that electronic commerce would take over the world.
It was only accidentally that PayPal discovered online auctions — eBay to be exact — and to solicit new customers using a very lucrative ...
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