PowerPoint Presentation

[Audio] College of Management University of Tehran PayPal Holdings Inc. Business Model Analysis By Ali Fatin Business Model Development Course (Dr. Aidin Salamzadeh) Winter 2025.

[Audio] outlines College of Management University of Tehran PayPal Timeline Founders Early Business Model Canvas Overview Current Business Model Canvas Overview Current Business Model review Business model evolution.

[Audio] Timeline. 1998 - Company launch Confinity, founded by Max Levchin, Peter Thiel, et at, is the precursor to PayPal. Levchin originated the company idea, and Thiel take on the CEO role..

[Audio] Founders Max Levchin BS in computer science University of Illinois Co-founder of Confinity software Co. contributions to PayPal's anti-fraud efforts Elon Musk BS in economics and physics University of Pennsylvania Co-founder of X.com, a direct bank. Merge with Confinity to become PayPal Members of the PayPal Mafia on Fortune magazine Members have since founded and/or developed additional technology companies such as Tesla, LinkedIn, SpaceX, YouTube. Most of the members attended Stanford University or University of Illinois at some point in their studies..

[Audio] Early BM Canvas Overview Customer Segments Key Partners Key Activities Value Proposition Customer Relationship Platform development and maintenance Self-service eBay Customer support for disputes and platform issues convenient and instantaneous money transfers between eBay users Individual Consumers Fraud analysis and algorithm development Software developers Merchants and Enterprises Key Resources Channels Small Sellers secure transaction between domestic buyer and seller Merchants and Enterprises PayPal tech Platform PayPal Website Specialized human resources mobile payment subsidiaries Revenue Streams Cost Structure transaction fees (for processing payments) Platform development and maintenance eBay sellers Transaction expenses Sales and Marketing small businesses.

[Audio] Current BM Canvas Overview Banks Software developers Payment Processors PayPal tech Platform Brand Self-service Customer support for disputes and platform issues Paypal Website and Mobile App mobile payment subsidiaries Merchants and Enterprises Merchants and Enterprises Individual Consumers Non-profits and Charities Buy safely from merchants around the world Accept worldwide payments Transaction expenses Sales and Marketing Platform development and maintenance Fees (transaction, currency conversion, withdrawal, etc) Subscription (business account, payflow) Interest, working capital, loans, affiliates Cost Structure Key Partners Key Activities Platform development and maintenance Fraud analysis and algorithm development Value Proposition Revenue Streams Customer Segments Customer Relationship.

[Audio] Value Proposition (Current) Convenience: Easy Transactions: send and receive money quickly and easily Multiple Payment Options: payment methods, including credit cards, debit cards, and bank transfers Security: Fraud Protection: protect user information and transactions Buyer and Seller Protection: protect users against unauthorized transactions and non-delivery of goods Global Reach: International Transactions: Facilitates cross-border payments and transact in multiple currencies Wide Acceptance: Accepted by millions of merchants worldwide Integration: E-commerce Solutions: Integrates seamlessly with various e-commerce platforms API Access: Offers developers tools to integrate PayPal into their applications and websites..

[Audio] Key Activities (Current) Payment Processing Transaction Handling: Managing and processing payments Fraud Detection: detect and prevent fraudulent transactions. Technology Development Platform Maintenance: Continuously improving the payment platform for security and efficiency Mobile App Development: for better user experience and accessibility Innovation and Expansion Product Development: new services like PayPal Credit, Venmo, and Braintree to expand offerings. Geographic Expansion: Entering new markets to increase user base and transaction volume..

[Audio] Key Resources (Current) Technology Infrastructure Payment Processing Systems: Robust platforms that handle millions of transactions securely and efficiently Mobile and Web Applications: User-friendly interfaces Brand Reputation Trust and Recognition: A well-established brand known for security and reliability in online payments Customer Loyalty: A strong base of repeat users Human Resources Skilled Workforce: Teams of engineers, data analysts, customer support, and compliance experts Leadership and Management: Experienced executives guiding strategic decisions and innovation Data and Analytics User Data: Insights from transaction behaviors of millions of users Market Intelligence: Information about trends in the payment industry to inform product development..

[Audio] Key Partners (Current) Financial Institutions Banks Credit Card Companies Technology Partners Payment Processors: Collaborations with other payment processing companies Software Developers: Integration with e-commerce platforms (e.g., Shopify, WooCommerce Fintech Companies Innovative Startups: To explore new payment technologies and expand service offerings Blockchain and Cryptocurrency Platforms: To integrate cryptocurrency transactions and services.

[Audio] Customer Segments (Current) Individual Consumers Online Shoppers Frequent Travelers: For international transactions and currency conversions Mobile Users Merchants and Enterprises: From bulk transactions and cross-border payments to reliable payment processing for small businesses, online retailers, freelancers and etc. Non-profits and Charities: Non-profits that use PayPal to collect donations and manage fundraising campaigns..

[Audio] Customer Relationships (Current) Basically self-service: without interaction with the company’s team. Buyer and Sellers Protection Programs: to ensure satisfaction and confidence on both sides. Community Building User Forums: Users can share experiences, ask questions, and provide insights. Social Media Engagement: Actively engaging with users on social media Incentives and Rewards: Offering promotions, discounts, and cashback rewards to encourage customer loyalty..

[Audio] Channels (Current) 1. Online Platform Website Mobile App 2. E-commerce Integrations Payment Gateways: Integration with e-commerce platforms (e.g., Shopify, WooCommerce) Shopping Cart Integration: Compatibility with various shopping cart software mobile payment subsidiaries: Venmo and Xoom.

[Audio] Revenue Streams(Current) Transaction Fees Merchant Fees: for processing payments which includes a percentage of the transaction plus a fixed fee. Cross-Border Fees: Additional fees for international transactions PayPal Credit: Interest income from users who utilize PayPal’s credit services for financing purchases Working Capital Loans: Loans offered to small businesses, generating interest and fees from repayments. Subscription Fees of Business Accounts: Monthly fees charged for premium business accounts Foreign Exchange Fees: Fees charged for converting currencies during international transactions Funds Held in Accounts: Interest earned on funds held in user accounts Advertising Revenue: Offering advertising space for merchants on PayPal’s platform Transaction Fees for Crypto Trading: Fees charged to users for buying, selling, or holding cryptocurrencies Data Analytics and Insights: Providing data analytics services to businesses for a fee, helping them understand transaction trends and customer behavior..

[Audio] Cost Structure (Current) Payment Processing Fees: Costs associated with processing payments, including fees paid to banks and card networks. Fraud Prevention and Security: Investments in technologies and systems to detect and prevent fraudulent transactions, ensuring user security. Technology Infrastructure: Costs associated with maintaining and upgrading servers, data centers, and IT systems that support PayPal’s platform. Marketing and Advertising Promotional Campaigns: Expenses for marketing initiatives to attract new users and retain existing ones Brand Development: Investments in building and maintaining the PayPal brand through various channels Product Development: Costs related to developing new features, services, and enhancements to improve user experience and meet market demands. Salaries and Benefits: Compensation for employees, including salaries, bonuses, and benefits packages..

[Audio] Business model evolution Phase 1: Expanding on eBay Focused on expanding PayPal's service among eBay users in the US Appealed to auction sellers who couldn't accept credit cards and buyers who could fund PayPal accounts without sharing credit card details New revenue stream New customer segments New value proposition Phase 2: Catering to Businesses Shifted focus to cater more to business accounts, rather than relying on interest earned on deposited funds Began relying on earnings from service charges, including offering seller protection to PayPal account holders Required merchants to retain shipping proof or provide signed receipts for high-value items to qualify for seller protection New partners New customer segments New Channel Phase 3: Expanding Off-eBay Developed strategies to grow active users across multiple platforms, not just eBay Expanded to non-eBay merchants through initiatives like lowering transaction fees, increasing referral bonuses, and partnering with payment gateways Launched PayPal Mobile to enable payments via text messaging, further diversifying its offerings.

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