If you are an online shopper, you have probably encountered PayPal many times. Online shopping has never been easier with the implementation and acceptance of PayPal payments. If you purchase products and services on the internet (also known as online shopping or online transactions), PayPal can allow you to make online purchases securely and quickly.

PayPal which went public in 2001, allows consumers and online shoppers to make and accept payments over the Internet without having to use a credit card. When the service first came out, many people were skeptical about the security and basis behind the PayPal payment system. Thus, many online shopping ecommerce stores never implemented PayPal. However, after going public, PayPal came to the forefront for internet online shopping.

In July of 2002, eBay, the largest online shopping system acquired the online payments company PayPal. The deal was aimed at phasing out eBay’s own payment system called Billpoint. In essence, eBay purchased PayPal because there would be less competition in online shopping transactional systems as well as because PayPal was proven to be a much better payment system.

The majority of PayPal’s business actually came from eBay auctions to begin with. Therefore, the transition from being a sole entity to being bought out by eBay was quite smooth. With the acquisition of PayPal, eBay now gains control of the most popular electronic payment service for online shopping. The majority of online shoppers nowadays prefer PayPal payment systems.

Prior to the acquisition of PayPal, the bulk of eBay transactions were conducted via check or money order. Having PayPal for online shopping meant that eBay could increase the number of electronic payments online, thereby making it easier for online shoppers to make purchases.
Some of the many benefits of PayPal include the following:

PayPal is Free
Yes, PayPal is a free service for all consumers and online shoppers. Online shopping has never been easier as PayPal is accepted in almost all eBay listings and many other ecommerce online shopping stores on the Internet. eBay is the world leader in online transactional software, and it’s free.

PayPal Buyer Protection
The introduction of PayPal as a secure and safe system for online shoppers was further consolidated with the PayPal Buyer Protection Plan was implemented into the system. This Buyer Protection plan essentially protects the consumer while purchasing goods through online shopping. Over 90% of items listed on eBay accept PayPal as a payment method and are thereby covered by the PayPal Buyer Protection Plan. Online shopping is safer than ever for consumers.

In addition, if you use PayPal to pay for items purchased through eBay, the PayPal Buyer Protection plan provides free coverage up to $1,000 USD. Online shopping has almost been a priority for eBay, and now with PayPal, the consumer’s security is their top priority.

PayPal and Privacy Issues
When making payments online through internet online shopping, the recipient or merchant will never learn the financial information of the consumer. No credit card information is required from the online shopper until they are ready to pay. Again, this provides extra security for online shopping websites. Again credit card information is not required to sign-up for PayPal.

However, the advent of PayPal has not been without questions and concerns. As online shopping has increased exponentially over the past decade, PayPal hopes to play a bigger role in all online shopping sites and payment systems.

After eBay acquired PayPal, the system continues to offer its service as an independent brand. As well PayPal dropped their online gaming business which brought them approximately 15% of their total revenue prior to the acquisition. Lucky for online shopping and PayPal, the US Congress passed a bill that would make online gaming illegal in the United States. Other problems revolve around whether PayPal constitutes illegal banking or money-transmitting services. Several states have seen class-action lawsuits against PayPal for illegally freezing their accounts.

As part of the deal, PayPal is still able to supply its services to other online shopping sites. However, most online shopping that provides PayPal payment services, are online auctions, which is the area where eBay has a strict advantage.

Other problems include PayPal email scams. During the past few years, there have been many email scams relating to PayPal accounts and personal information. PayPal and eBay have been unable to control email spam related to their companies. In efforts to curb the increasing spam problems and allow smoother online shopping, Congress has been working hard to fine and jail those responsible for these illegal actions.

The future for PayPal is bright. eBay has always been the leader in online auctions and online shopping. With integration of PayPal website payments wizard for Microsoft FrontPage, Macromedia Dreamweaver and other website development software, PayPal will continue to be integrated in thousands of online shopping websites. Creating online stores has never been as easy with PayPal.
Currently more than 3 million online businesses use PayPal as a payment method. Considering the exponential increase in the number of online shopping sites around the world, PayPal will definitely be integrated into millions more within the next decade.