Paypal - a brief history from Chris

Superb piece of research from Chris, detailing Paypals history since inception in Dec 98, with statistics, and more importantly, why they were successful.

"In fact, although many of us think PayPal displaces banks, it actually enhances banking services as demonstrated by the bank services behind PayPal. For example, PayPal runs through Wells Fargo and JPMorgan’s infrastructures and generates payment transactions through Visa and MasterCard.

As a result, the US backers of PayPal from the banking industry are making a mint through the massive volumes of payments that PayPal generates, as are the bank cards and deposit accounts used to provide PayPal payments.

In other words, PayPal is just a layer on top of the bank network, not the bank network itself. This means it is a complement to banking, not a replacement." 

 However, the amount of business Banks have lost is also astounding, so I wonder if the above advantage was only looking at one side of the equation.  I have always contended that the issue with paypal is not transactions ... it is loss of deposit balances.