eBay 2012 Annual Report Download - page 9

solutions. PayPal connects with more than 15,000 financial institutions around the world, and consumers can typically use their payment method
of choice, no matter where the seller is located. Users of our PayPal payments solutions can engage in cross-border shopping, which can help
merchants to increase sales volume by allowing them to sell to a global base of consumers.
We had more than 122 million and 106 million active registered accounts as of December 31, 2012 and 2011, respectively. The term
active registered accounts means, as of a given date, all registered accounts that successfully sent or received at least one payment or payment
reversal through the PayPal system within the prior 12 months or Bill Me Later accounts that are able to transact at that date and that have
received a statement within the prior 12 months. Users may have more than one account with PayPal or Bill Me Later and therefore the number
of active registered accounts may be greater than the number of underlying users.
Our PayPal payment processing solution is available both online and on mobile devices.
PayPal started as a payment solution for online transactions between consumers and merchants through a traditional online experience.
With the growth of Internet-enabled mobile devices, PayPal is becoming a popular form of payment for mobile commerce. In 2012, PayPal's net
total payment volume, or net TPV, for transactions using mobile devices reached nearly $14 billion, up from approximately $4 billion in 2011.
PayPal's mobile products are designed to deliver an end-to-end mobile shopping experience in a safe and secure environment. PayPal's mobile
checkout solutions offer a convenient and easy way for merchants to accept payments from mobile devices, and for consumers to pay, through a
mobile-optimized user experience. Consumers with a PayPal account have the flexibility to pay without entering a credit card number or a
billing and shipping address online or through their mobile devices. We define net TPV as total dollar volume of payments, net of payment
reversals, successfully completed through our Payments networks, Bill Me Later and Zong during the applicable period, excluding PayPal's
payment gateway business.
Our PayPal payment solution offers merchants an all-in-one payment processing solution.
An online merchant can typically open a standard PayPal account and begin accepting payments through PayPal within a few minutes.
Most online or mobile merchants are approved instantly. Processing with PayPal does not require new specialized hardware. It can also reduce
the need for merchants to receive and store sensitive customer financial information. PayPal does not charge merchants any setup fees and offers
a standard service with no recurring monthly fees.
We offer consumers choice by providing a variety of funding mechanisms.
Consumers can fund their PayPal accounts and payments using PayPal in a variety of ways, including by credit card, debit card, electronic
funds transfers from their bank account and through a PayPal balance if the buyer has previously received payments through PayPal or chosen to
pre-fund a balance. We also provide a credit offering through our Bill Me Later service, which allows qualifying U.S. consumers to obtain a
revolving line of credit at the point of sale from WebBank, a third-party chartered financial institution. Bill Me Later is not a chartered financial
institution nor is it licensed to make loans in any state. Accordingly, Bill Me Later must rely on a bank or licensed lender to issue the Bill Me
Later credit products and extend credit to customers. U.S. consumers may also be offered an opportunity to defer payments for purchases made
using Bill Me Later. Under some promotional arrangements offered on select merchant sites, interest on such purchases can be deferred for as
long as 18 months.
When a consumer makes a purchase using a Bill Me Later credit product issued by a chartered financial institution, the chartered financial
institution extends credit to the consumer, funds the extension of credit at the point of sale and remits funds to the merchant. We subsequently
purchase the receivables related to the consumer loans made by the chartered financial institution and, as a result of that purchase, bear the risk
of loss in the event of loan defaults. Although the chartered financial institution continues to own each customer account, we own the related
receivable and are responsible for all servicing functions related to the account. For information regarding risks related to our Bill Me Later
business, see the information in “Item 1A: Risk Factors” under the captions "Bill Me Later's operations depend on lending services provided by
an unaffiliated lender" and "Bill Me Later's operations expose us to additional risks."
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