Process Flow Of Paypal Business Operations Information Technology Essay

PayPal is the universe ‘s fastest and the most dependable manner to pay and acquire paid online. It is eBays on-line payment system. The service allows members to direct money without sharing fiscal information therefore guaranting optimal confidentiality. Besides present is the flexibleness provided to clients to pay utilizing their history balances, bank histories, recognition cards or promotional funding. Currently touting of a little more than 87 million active histories and holding captured 190 markets and 24 currencies around the universe, PayPal enables planetary ecommerce. Although PayPal is lawfully merely a money transportation agent, it ‘s more similar practical plastic to consumers and merchandisers.

Figure 1 – Welcome Screen on

Similar to an escrow service, PayPal acts as the jobber holder of money. Through its policies, patterns, and concern unity, PayPal has earned the trust of both parties. With multiple warrants in topographic point, purchasers and Sellerss entrust PayPal with their recognition card and bank information. PayPal keeps that private client information secret. Then, while “ blinded ” from the other party ‘s confidential information, aliens safely send money to each other through PayPal and electronic mail.

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PayPal: Business Model

PayPal, over a due class of 12 old ages, has become a taking processor of Customer-to-Customer or C2C payments over the cyberspace. In a C2C e-commerce theoretical account, a consumer sells something to another consumer. Traditionally, C2C consumer to consumer gross revenues occurred at flea markets or barter events when people sold 2nd manus goods to person else. But now, within the helm of the twenty-first century, C2C has expanded much beyond its estimated possible range, all attributed to a small something called World Wide Web. The latest strain of C2C consumer to consumer web sites is a testimony to that.

For illustration, say a digi-cam gimmicks my oculus on E-Bay. And within five proceedingss or so, after surfing a little more, I eventually decide to buy it. Now both I and the proprietor of the digi-cam are clients, and within the dealing, I am the purchaser and the proprietor is the marketer. So when I choose PayPal as my payment option, money is extracted from my HSBC history and reaches the proprietor within a stipulated sum of clip. A small money, of class, is kept by PayPal as an on-line dealing fee. This client to client dealing falls under the C2C E-Commerce Model.

Figure 2 – Procedure Flow of PayPal Business Operations

PayPal is made up of three taking on-line payment services: the PayPal Global Payment Service, where we can shop and pay on-line rapidly and firmly, the Payflow Gateway, where we can direct money to anyone with an electronic mail reference and Bill Me Later, which encompasses having on-line payments for the points sold. The company ‘s unfastened payment platform, PayPal X, allows developers to construct advanced payment applications on multiple platforms and devices. There are three types of histories that we can do on PayPal depending on our penchants such as:

PayPal Personal History:

This is the basic PayPal history that lets one wage for his eBay purchases with easiness. He can utilize it to direct and have money. He can direct financess to anyone with an electronic mail reference in 55 states and parts. A Personal history even allow us accept payments should we sell something via eBay. The lone gimmick is that we can merely accept payments from other PayPal histories, and we can non accept recognition or debit card payments.

There is no fee for either the Personal history or the minutess we make through it. There is, nevertheless, a bound on how much can you have per month.

PayPal Premier Account:

This type of a PayPal history has all the functionality of the Personal history, plus we can accept recognition and debit cards, and bank history payments. Premier history besides offers such characteristics as “ shopping cart ” and payment coverage tools. This history type is good for a serious amateur marketer who wants to travel points online on a regular footing.

Premier histories are free to make, free to keep money, and free to direct money. Withdrawals of financess are where PayPal will take service charges.

PayPal Business Account:

This is the concern category of a PayPal history, best suited to persons running a big scale online concern or online shop. Business history allows us to run under our concern name, and utilize Reporting and eBay Tools with no limitations on dealing size. It is the best pick if we expect complex Accounts Payable. There is wide functionality for the concern proprietors that help them to pull off really big sums of gross revenues with easiness. Like Premier, there are optional services with optional fees, but the base Premier history is free for making, keeping, and directing money.

Figure 3 – Growth of PayPal over different quarters get downing from 2007

This concern theoretical account seems to be working exceptionally good for them, sing the grosss, good will and trust they are bring forthing all over the universe. All this is attributed to the rigorous security system that it boasts of, owing to which, the on-line fraud rate has come down to less than.5 per centum, therefore extinguishing 60 per centum of the hazard of taking recognition cards online. It is important to restrict illegal minutess as for the long-run endurance of Internet commercialism.

PayPal: Gross Model

PayPal charges a nominal fee to the receiver of the financess. So, if Ten transportations $ 100 to Y ‘s history, so the sum Y will have will be somewhat lesser than $ 100 as PayPal will subtract a little fee from the sum received by the receiver. There is no fee for the individual who is utilizing PayPal to pay for goods or services. In the instance of affluent people, who have enormous excess in their histories, the involvement charges that the card holders have to pay are extortionate. The precise fee construction is every bit explained below:

Type of Transaction


1. For having transportations under $ 3000 USD

2.9 % + $ 0.30 USD

2. For having transportations $ 3000.01 to $ 10,000

2.5 % + $ 0.30 USD

3. For having transportations $ 10,000.01 to $ 100,000

2.2 % + $ 0.30 USD

4. Receiving transportations over $ 100,000

1.9 % + $ 0.30 USD

As observed from the tabular array above, smaller minutess are charged more to a great extent than the large minutess. So smart Sellerss increase their monetary values to countervail these charges on their side of PayPal. For pulling a possible market, PayPal comes up with schemes like wholly striking off and claiming 0 Setup Fees, Monthly Fees or Gateway Fees. It asserts one of the lowest loss rates in the online retail industries.

Figure 4 – Gross Growth of PayPal over the old ages

Figure 5 – Snapshot of the PayPal screen when a dealing is taking topographic point

PayPal: Advantages & A ; Applications

PayPal takes pride in showing a overplus of advantageous state of affairss and illustrations such as:

eBay buying:

If a individual wants to take part in eBay, it is imperative that he sets up a PayPal history for himself. Over 90 % of eBay Sellerss choose PayPal as their sure method of pick for taking payments. EBay does ain PayPal, so one can be confident that its ownership is motivated to maintain it a stable and dependable service.

Personal Minutess:

PayPal is besides ideal for traveling money between aliens, without utilizing recognition card or personal information. For illustration, if one wants to set up a group price reduction purchase of paintball cogwheel for his paintball nine, he can organize with his friends by electronic mail, and have them send him their payments through PayPal.

PayPal: Alliances and Rivals

Bing one of the most successful on-line payment systems, PayPal is strike harding cubituss with Visa, MasterCard, and the Bankss that issue their cards. Recently, it passed American Express, the taking bank card issuer. It has tied up with Internet elephantine Facebook, which has tapped PayPal to power payment options for advertisement and practical goods on parts of the site. Users and sellers can take PayPal as an option for buying ads and Facebook Credits, a system being tested in a little figure of games and applications for purchasing practical goods on the site.

Figure 6 – Facebook and PayPal confederation

PayPal is capturing the planetary market at a really high gait. It has signed up a assortment of independent merchandisers to offer its service, from little Fries such as Saylor ‘s Pizza in Hendersonville, Tenn. , to large fish like retail merchant and Apple Computer ‘s iTunes Music Store. And it ‘s rapidly traveling overseas, opening local Web sites in eight states in the past twelvemonth.

PayPal has several rivals which offer some of its services such as Google Checkout, Wirecard, Moneybookers,, which remain in concern, despite the slow or nonexistent growing. A twosome of old ages back, eBay had made it compulsory for all its users to pay via PayPal. This status was subsequently removed and it was made flexible to all other payment options as good. Currently, the rumor suggest that American giant Apple, are besides traveling into the on-line payments concern. If and when that does go on, the universe will be waiting to see what happens when these two super-successful companies clash with each other.

PayPal: Selling Scheme

The company ‘s first of all time CMO, Barry Herstein describes in an on-line article that his full squad has focussed all their attempts on keeping PayPal ‘s repute and spread outing its planetary presence, all the piece maintaining his focal point forthrightly on the house ‘s two sets of clients, which are consumers and merchandisers. Bing one of the most interesting trade names, its growing has been organic, mostly attributed to viva-voce promotion. As the growing and market portion grew exponentially, they realised the demand for a CRM squad and its capablenesss that are indispensable for an e-direct selling concern. Part of their selling scheme besides involves developing the planetary selling endowment base, and to portion and comparison and acquire all those fecund planetary acquisition.

Figure 7 – A Map picturing the growing of PayPal all over the universe

The company views E-Bay as their biggest client, as a merchandiser. Particular focal point is given to guarantee that their individual biggest beginning of acquisition of clients, eBay, is booming. Though they are separate divisions, the passage has been smooth with both the states and the behavior has been good within the tolerable bound when it comes to traverse functional cooperation.

PayPal: Customer Value Proposition

PayPal has done everything possible to guarantee a smooth client value proposition. The dealing processs have been simplified and extreme security steps are taken to guarantee confidentiality of the clients and their private inside informations. Buyers can besides salvage clip when shopping with multiple eBay Sellerss, PayPal allows purchasers to aggregate several purchases under a individual payment check-out procedure.

A more elusive alteration for purchasers is the 1 to eBay ‘s long-running community feedback system, which gives purchasers more flexibleness to supply elaborate evaluations of Sellerss instead than a simple positive/neutral/negative evaluation.

Figure 8 – Customer Satisfaction with PayPal

A construct of Power Sellers has emerged in which the Sellerss with the highest evaluations are given excess privileges. These are decided on the footing of the evaluations that are given to them by different purchasers on the footing of their experience whilst covering with them. The Power Sellers besides receive precedence client service, higher rankings in hunts, excess insurance against bad purchasers, and an icon attached to their profiles. This farther pushes all the people involved in the trade rhythm to present their optimum and ensures that the best workers are rewarded every bit good.

PayPal: Management Team

Figure 9 -Depiction of Management Team in a Chart

PayPal: Business in India

As of this minute, PayPal has withdrawn the Electronic Payment Facility in India, effectual July 29, 2010. This instance of barricading and change by reversaling payments has caused widespread uncomfortableness amongst its 175000 clients, including little Indian free-lances, IT programmers, web interior decorators and authors, who use personal instead than concern histories to have payments from clients all over the state. This partial closure is under the careful examination of the authorities, since the really ground for the impermanent suspension of the services, is legislative authorization and the dissension over skill of a licence to run a remittal service in India. This has opened Gatess to welcome sufficient uncomfortableness by the RBI.

Figure 10 – PayPal India

PayPal: New Innovations on the Block

PayPal Mobile is one of PayPal ‘s newest merchandises. It allows us to direct payments by text message or by utilizing PayPal ‘s nomadic browser. Payments can be made either by texting the dollar sum and receiver ‘s phone figure to PayPal or by utilizing PayPal ‘s nomadic browser. There are no extra fees for utilizing PayPal Mobile outside of the normal money receiving fees that apply to Business and Premium histories. Besides, the nomadic bearer ‘s text message charges will use.

Figure 11 – PayPal Mobile

Conclusion & A ; Research

After a elaborate survey on PayPal, I have discovered a batch of fresh niceties about this proliferated web site and the full system that runs behind it. There is no uncertainty that it is the universe ‘s most admired on-line payment system and surely so. With an e-commerce portal, comes the added duty of being excess cautious about the user confidentiality from the decision maker side and supreme intuition of forging and deceitful activities. But PayPal has made certain that its clients are given the best possible experience of money dealing. The GUI is highly user friendly and easy to utilize and understand. Since PayPal has about all the major giants along with the smaller important under its umbrella, it becomes a alone experience to purchase and sell goods.

On elaborate research, I found a few lesser known facts about PayPal. Some of them are:

Though the dealing clip takes a twosome of yearss, PayPal keeps our money in its history till the clip the transportation of the goods purchased is non over.

There have been disconnected instances of history freeze of clients for which PayPal has been sued excessively.

Many of the clients have complained about sub-standard client service. Customers claim that phone Numberss are really difficult to happen and frequently seem to be purposefully concealed and besides emails sent to client service about ever receive machine-controlled responses.

It has been frequently brought to public notice that anyone purchasing a merchandise utilizing a unusual looking email reference may have a full refund and maintain the point they purchased every bit good, which invites superior disagreements.

Despite all of this, PayPal is turning at a enormous rate and the direction squad should be extremely commended for that. In the true sense, it has made the universe a local market.