Hello everyone, Welcome! Thank you for participating in this Presentation. This is case Study of PayPal. Without further a due, I would like to present the team members who have contributed to this presentation.
This Case Study is being presented to you by: Group 3 which compose 3 members:
Here is a overview of the items that this presentation will cover. A brief history and some background of PayPal will be presented to give the audience a better understanding of the Company. We will begin with an examination of the Case Study of PayPal from the Marakas & O’Brien text. This will cover the issue, the solution and evaluation of the measures taken. Next we will examine additional issues found that threaten the company. These problems will also be evaluated and commented on regarding the effectiveness of the solutions. The presentation will conclude with a summary of the overall health of PayPal and outlook going forward. References of works cited are included for further information.
The service allows members to send money without sharing financial information, with the flexibility to pay using their account balances, bank accounts, credit cards or promotional financing. With more than 94 million active accounts in 190 markets and 24 currencies around the world, PayPal enables global ecommerce. PayPal is an eBay company and is made up of three leading online payment services: the PayPal global payment service, the Payflow Gateway and Bill Me Later. The company's open payment platform, PayPal X, allows developers to build innovative payment applications on multiple platforms and devices. Scott Thompson is president of PayPal with overall responsibility for establishing PayPal as the leading global online payment service. Scott previously served as PayPal's senior vice president and chief technology officer, where he oversaw information technology, product development and architecture for PayPal.
1998 Peter Thiel gives lecture on market globalization afterward Max Levchin introduces himself. Several weeks later the two develop the idea of a digital wallet using a PDA. Later that year they form the company Confinity whose purpose is to enable money transfers using a Palm device or PDA 2002 Ebay acquires PayPal combining the world’s largest online marketplace with the web’s leading payment system 2005 PayPal Acquires VeriSign’s Payment Gateway and combines it with PayPal’s merchant services platform 2006 PayPal expands internationally to 103 markets and accepts 10 currencies 2009 Bill me later allows approved customers to select option to pay over time 2010 PayPal now allows account holders to buy goods through Facebook and send money using their mobile devices
The PayPal case study in the textbook outlines polylingual obstacle as one of the most challenging issues PayPal has ever faced against its globalization ambition. PayPal realized a few years ago that failing to solve this problem would have crippled its expansion into new countries and hindered its ability to grow. Given the threat to its future, PayPal decided to come up with not only an effective solution, but a permanent one
By re-architecting its software code to accommodate the language localization issues, and create what is called today “Polylingual simultaneous shipping” or “SimShip” by the development community. (O’Brien & Marakas, 2009) According to
PayPal successful implementation of SimShip today is a proof that PayPal has finally overcome the polylingual issue. Gone are the days where PayPal had to worry about its globalization expansion, for now it possesses 15 languages, 17 currencies and 190 markets worldwide, as mentioned by Matthew Mengerink, Vice President of core technologies at PayPal. By going global all language at a time, PayPal has demonstrated that polylingual challenge is no longer its most relevant issue PayPal President Scott Thomson stated that the company should double in size over the next three years. PayPal is expected to process between $100-$120 billion in annual payments around 2011. PayPal has about 70 million active users. PayPal is available in about 17 languages and accepts about 19 different currencies. PayPal takes a cut from each transaction and ended up making $2.4 billion in 2008. If all goes according to plan, PayPal’s expects their own revenue to increase to $4-$5 billion around 2011
Others issues needed to be dealt with on a daily basis, especially related to security. As an online payment and money transfer service, security is a constant issue for PayPal and will ever be around as technology evolves over time.
Fishing emails are the most common issues facing PayPal’s customers. They are emails that lead PayPal’s users to fake or “spoof” sites in order to steal their information for fraudulent activities. Spoof sites are fake sites that stand like the real PayPal site, usually with the same look and feel of which purpose is to lure users into collecting their information.
To solve this problem, PayPal recommend its users to remember the following important points whenever they receive an alleged PayPal’s email: Never click on a link in an email that requests personal information. PayPal will never ask its customers the following information in an e-mail: Credit and debit card numbers Bank account numbers Driver’s license number E-mail addresses, full name and password. (PayPal, 2011)
In November 2010, viaForensics a computer/mobile forensics firm, uncovered a security vulnerability for the app iPhone that would have exposed PayPal customers to either identity theft of financial risks, but PayPal rushed out to fix the problem by creating and releasing an update of its iPhone app. (ihaas, 2010)
In April 2010, PayPal announced he had patched numerous security holes that an Avnet Technologies security researcher had discovered in PayPal’s backend system related to its business and premier accounts. These vulnerabilities have exposed massive amount of customers’ data. (Prince, 2010)
PayPal has demonstrated a commitment to solving issues quickly and with effective solutions. They understand the nature of their business demands, and complete customer confidence. When issues arise they take control of the situation rather than letting things deteriorate.
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ITEC 610 Group 3
Guy Williams Kouam
Textbook Case Study Problem Facing PayPal
Reaction to the Issue
Outcome of the Proposed Solution
Additional Issues at PayPal
Evaluation of Solutions
Type::Subsidiary of eBay Inc.
FOUNDED::Palo Alto, California, U.S.
Headquarters::San Jose, California, U.S.
Founder(s)::Ken Howery,Max Levchin,Elon Musk
Luke Nosek,Peter Thiel
Revenue:: US$4.4 billion (2011)
Company’s process of deal
PayPal is an acquirer, performing payment processing
for online vendors, auction sites, and other
commercial users, for which it charges a fee. It may
also charge a fee for receiving money, proportional to
the amount received. The fees depend on the
currency used, the payment option used, the country
of the sender, the country of the recipient, the
amount sent and the recipient's account type
Service that allows members to send/receive money
2211 North First Street
San Jose, California 95131
President Scott Thompson
94 million active accounts in 190 markets and 24
PayPal’s 2010 annual revenue was $3.4 billion, up 23
percent year over year (PayPal, 2011)
As of March 2011, PayPal made changes to the User Agreement for Indian
users to comply with Reserve Bank of India regulations. Notable changes
to the agreement were:
Export related payments for goods and services may not exceed $500.
Any balance or future payments must not be used to buy goods or services
but transferred to a bank account within 1 day from the receipt of
Credit/Debit cards must be used to pay through Paypal.
The per transaction limit just been changed to USD 3000, since 14 October
PayPal wants to make India an incubation center for the company's
employee engagement policies. In 2012, PayPal hired 120 people for its
offices in Chennai and Bangalore. PayPal plans to recruit 1000 candidates
for its Bangalore Development center.
1998 Founded by Peter Thiel and Max Levchin
2002 Acquired by eBay
2005 PayPal Acquires VeriSign's Payment Gateway
2006 PayPal Expands Internationally
Language/Currency Compatibility Issue
2009 Offer Bill Me Later Option
2010 Now on Facebook, iPhone, and Android
Case Study Issue Facing PayPal
Textbook Case Study Outlines Polylingual Issue
Foreign Language and Currency
Hindered International Expansion
Threatened Company Future
Needed Effective and Permanent Solution
(Marakas & O’Brien, 2009)
PayPal’s Reaction to the Issue
Re-architecting Software Code with Internal Solution
Accommodate the Language Localization Issues
Recognize Country/Location Automatically
Polylingual Simultaneous Shipping “SimShip”
Successful Implementation of SimShip
Overcame/Solved the Polylingual Issue
No longer a relevant problem at PayPal!
Currently Accepts 15 Languages, 17 Currencies, 190
Expected to Process $100-$120 Billion in 2011.
Projected Profit of $4-$5 Billion in 2011
The Solution was a Huge Success
Issues Beyond Case Study
Security of Transactions
Phishing Emails and Spoof Sites
Security Vulnerability of Mobile App
Backend System Security Holes
Phishing and Spoof Sites
Most Common Issue Facing Customers
Emails Targeting Users
Lead PayPal Users to Fake or Spoof Sites
Looks Like Legitimate Website
Steal Information, Identity, Money
Never Click Link that Request Personal Info
PayPal Will Never Ask for the Following Via Email
Credit Card Numbers
Bank Account Information
Driver’s License Number
Email Addresses, Full Name or Passwords
Mobile Device Vulnerability
ViaForensics Uncovered Security Issue with iPhone
Potential Identity Theft
Quickly Reacted to Issue
Created and Released Update to Correct App
Backend System Security
Numerous Security Holes
Discovered by Avnet Technologies Researcher
Business and Premier Accounts
Exposed Massive Amounts of Customer Data
PayPal Patched Security Holes
Evaluation of Solutions
Case Study Issue of Foreign Language/Currency
SimShip Solution Very Successful
Company Expanded Internationally
Business Revenue Growth
Other Security Vulnerabilities
PayPal Very Proactive
High Degree of Customer Confidence
Summary of PayPal
Currently the most popular online payment system.
PayPal has Addressed Issues Effectively
Company is Leader in Industry
Customers Trust the Service
Company Committed to Quality/Integrity
Chowdry, A. (March, 2009). PayPal expects revenue to increase substantially.
Retrieved from http://pulse2.com/2009/03/11/paypal-expects-revenue-to-
Ihaas .(2010). ViaForensics: viaForensics uncovers PayPal application
vulnerability. Retrieved from http://viaforensics.com/press-
Marakas G. & Obrien J. (2009). Management information systems. pp. 473-
PayPal. (2011). Welcome to the press center. Retrieved from
Prince, B. (2010). PayPal Patches Critical Security Vulnerabilities. Retrieved
March 2011 from http://www.eweek.com/c/a/Security/PayPal-Patches-