eBay 2013 Annual Report Download - page 9

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, and they can send payments to each other nearly everywhere in the world and in a wide range of currencies.
We had 143 million active registered accounts as of December 31, 2013. 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 our PayPal payments networks,
including Bill Me Later, within the last 12 months and which are currently able to transact. 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 Payments platforms offer the following features:
We enable payments in the online and physical worlds.
PayPal started as a payment solution for online transactions between consumers and merchants through a traditional online experience
(i.e., an Internet-connected computer). As a result of being simple and secure for consumers, we believe that PayPal can help merchants to
increase conversion of online traffic to sales. 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 online with PayPal does not require a
merchant to invest in new or specialized hardware. PayPal's technology platform supports growth with a variety of value-added services. This is
designed to help businesses of all sizes manage their cash flow, invoice clients and pay bills, and to reduce the need for merchants to receive and
store sensitive customer financial information, enabling Payment Card Industry, or PCI, compliant transactions. PayPal does not charge
merchants any setup fees and offers a standard service with no recurring monthly fees.
With the growth of Internet-enabled mobile devices, PayPal is a popular form of payment for mobile commerce. In December 2013, we
completed our acquisition of Braintree to help strengthen our position in mobile payments and extend our coverage to a new class of retailers
who offer their services primarily via mobile apps. In 2013, PayPal's net TPV for transactions using mobile devices exceeded $27 billion, of
which approximately 50% was from eBay Marketplaces. To expand PayPal’s availability as a payment option in physical stores, PayPal has
entered into a partnership with Discover in the U.S., as well as similar relationships with merchant acquirers and ePOS (electronic point of sale)
providers in the United States and Europe. PayPal also offers PayPal Here, a mobile payment processing solution for small businesses in the
United States, Canada, the United Kingdom, Australia, Hong Kong and Japan.
Our global reach and scale provides value for consumers and merchants.
With 143 million active registered accounts as of December 31, 2013, PayPal provides merchants with a large base of potential customers.
As a result of being available in approximately 193 markets and in 26 currencies as of December 31, 2013, PayPal also provides merchants with
global reach and reduces some of the complexity and friction involved in overseas and cross-border trade. For the year ended December 31,
2013, approximately 48% of PayPal’s net TPV was international, and approximately 25% was cross-border. Our U.S. merchants are also able to
offer consumer credit to U.S. consumers at the point of sale through our Bill Me Later service.
We offer consumers choice by providing a variety of funding mechanisms.
Consumers can fund their PayPal accounts 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 consumer has previously received payments through PayPal or chosen to pre-
fund their PayPal
account. We refer to the allocation of funding sources used by PayPal consumers as our “funding mix.”
We also provide credit products through our Bill Me Later service. Currently, when a consumer funds a purchase using Bill Me Later, a
chartered financial institution extends credit to the consumer, funds the extension of credit at the point of sale and advances funds to the
merchant. Bill Me Later is neither a chartered financial institution nor is it licensed to make loans in any state. Accordingly, Bill Me Later must
rely on a bank or other licensed lender to issue credit products and extend credit to customers. Although the chartered financial institution
continues to own each of the customer accounts, we subsequently purchase and retain most of the consumer receivables related to the consumer
loans made by the chartered financial institution and are also responsible for servicing functions related to the customer account.
Bill Me Later accounts are most commonly opened on U.S. merchant websites, including ebay.com, offering Bill Me Later as a payment
method, but can also be opened by U.S. consumers through a qualified PayPal account or at the Bill Me Later website. U.S. consumers may be
offered an opportunity to defer payments under some promotional arrangements offered on select merchant sites. Interest on such purchases can
be deferred for up to 18 months.
7