eBay 2005 Annual Report Download - page 11

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PayPal's account-based system is available to users in 55 markets, including the United States. As of
December 31, 2005, PayPal had approximately 96 million total accounts, comprising approximately 19 million
business accounts and 77 million personal accounts.
PayPal Value Proposition
Providing more efficient and effective payment methods is essential to creating a faster, easier and safer
online commerce experience. Traditional payment methods such as checks, money orders and credit cards
processed through merchant accounts, all present various obstacles to the online commerce experience,
including lengthy processing time, inconvenience and high costs. Our PayPal online payments solution allows
our community of eBay users, as well as users of other online businesses, to pay for their transactions securely,
easily and quickly.
PayPal enables buyers to store their sensitive financial information online, and to pay merchants without
sharing this information with them, or entering their information onto a website each time they make a
purchase. To make payments, senders need to disclose only their email addresses to recipients. Similarly, to
receive payments, recipients need to disclose only their email addresses to senders. Many buyers and sellers
wary of disclosing financial information online find this high level of personal privacy attractive.
PayPal offers online merchants an all-in-one payment processing solution that is cheaper than most
merchant accounts, offers industry-leading fraud prevention, and enables merchants to access approximately
96 million customers in 55 markets.
A merchant can open a PayPal account and begin accepting credit card payments within a few minutes.
Merchants are approved instantly for a PayPal account, and do not need to provide a personal guaranty,
acquire any specialized hardware, prepare an application, contact a payment gateway or encrypt customer
data. Furthermore, PayPal charges lower transaction fees than most merchant accounts, and charges no setup
fees and no recurring monthly fees.
The account-based nature of PayPal's network helps us to detect and prevent fraud when funds enter the
PayPal network, as funds move within the network, and when they leave. Sellers can also reduce the risk of
transaction losses due to unauthorized credit card use and fraudulent chargebacks entirely, if they comply with
PayPal's Seller Protection Policy.
PayPal Strategy
We seek to extend our leading position and become the online payment network of choice around the
world. To establish PayPal as the global payment standard in online payments, we will focus on, among other
things, increased adoption of PayPal on the eBay Marketplaces and expansion of PayPal's merchant services,
which are services for merchants who sell through their own websites.
Increase PayPal's adoption on eBay Marketplaces
eBay.com: In 2005, the U.S. Marketplaces segment of eBay generated more than $21.9 billion in gross
merchandise volume, which is a measure of the total value of all successfully closed listings between users on
our marketplaces. We intend to strengthen PayPal's penetration into the payments area on the eBay
Marketplaces in the United States by continuing to integrate with eBay listings and new formats, focusing on
buyer protection programs and seeking to add product features important to the eBay community.
International sites: As of December 31, 2005, PayPal was available in a local language and currency in
13 international markets. PayPal plans to continue its expansion into new markets, while improving its product
and adding new features to increase adoption by the eBay international community.
As of December 31, 2005, PayPal allowed its customers with credit cards to send payments from an
additional 54 markets outside of the U.S., and to receive payments in 42 of those markets. In 27 of these
markets, customers can withdraw funds to local bank accounts.
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