Last night was the first meeting of the FSClub for 2009.
I wanted to make it a party, and rather than making it a party for the sake of a party, we made it a party for something else.
The question is, what could we make it a party for?
Possibly. Motown celebrated fifty years of existence this week, so that could be a good excuse for a party.
But it's nothing to do with financial services.
The euro celebrated ten years of existence on January 1st, so that would be agreeable.
But the euro in London? No-one would turn up.
So instead we had a party for PayPal.
As you can see, it was quite a crowded affair:
We even had a cake:
After all, you can't have a birthday party without a cake can you?
Mind you Carl-Olav Scheible, PayPal's Managing Director who gave a speech about their past and future, didnt' look too happy when I got him to stand on a chair and sing "Happy Birthday PayPal":
In January, the Euro celebrated ten years of life. What you may have missed is that there was another ten year celebration taking place at the same time. A ten year anniversary of a currency that has been just as successful as the euro, if not more so. This is the internet currency of PayPal.
The Financial Services Club decided to throw a birthday party for PayPal to celebrate their tenth birthday and it is interesting to note their highlights after ten years. In eBay’s results for the third-quarter of 2008, PayPal managed:
$14.81 billion worth of payments, which represents 28% year-on-year growth; for
65.3 million active users, up 19%; processing
214.5 million transactions, up 25%.
It is also noteworthy that, having slipped to 71% of purchases being through eBay at the end of 2004, PayPal’s Q3 2008 results showed purchases made outside eBay are now greater than through eBay. In other words, PayPal is not eBay’s payment system anymore. It is the internet’s payment system. That is why PayPal provides 28.2% of eBay revenue today, up from 24.8% in the year before.
All this, and only ten years old!
Yes, PayPal was conceived in December 1998 at a time when there were many other contenders for the online payments crown, including eBay’s very own payment service, Billpoint.
PayPal succeeded back then for three major reasons. The first was timing, as there was no way to support person-to-person buying and selling on the internet back in 1998. The second is the viral nature of PayPal or, as it is sometimes referred to, the network effect. There’s nothing like an email saying, “you’ve got money” to get people to sign up. The final success is that they made online payments cheap by minimising the cost of transactions and authentication. This is why they now, ten years later, operate in 190 markets using 17 currencies with over 100,000 websites accepting PayPal in Europe alone.
So happy birthday PayPal. Let's see what the next ten years are like.