History of PayPal
PayPal made its debut in 2000 when Confinity and X.com merged companies. It rapidly rose to fame and became
the payment method of choice by more than 50% of eBay users and more than 20% of Internet users. PayPal dominated the online gambling payment market until 2002 when it ceased to conduct gambling transactions due to fear of prosecution by the United States Government.
Until that time, it was reported that over 500 gambling sites had signed up to use PayPal as a payment method in the first quarter of 2002 alone, and it was expected that PayPal would derive more than $16 Million from Internet gaming by the close of 2002. It was also reported that PayPal received 6 percent of its revenues from online gambling, according to its filing with the Securities and Exchange Commission in the previous years.
The New York State Attorney at the time was in hot pursuit of banning online gambling and seized the opportunity to penalize online processors. PayPal unfortunately was a major target. They alleged that PayPal violated laws regarding the processing of online gambling payments and forced PayPal to agree to discontinue the use of its service by New York State residents, if they pertained to online gambling. They also agreed to pay $200,000 to cover costs of the investigation and penalties. When PayPal was acquired by eBay in October of 2002, eBay decided to stop offering the payment service for Internet gambling transactions due to what they termed was an "uncertain regulatory environment surrounding online gaming" and they were asked to hand over nine months of the gambling-related earnings in the settlement for gambling-related transactions that took place during the period of October 2001 to July 2002.
It is now 2009 and PayPal is still doing what it was created to do - allow customers to send and receive monies via the Internet. It now conducts transactions in 19 currencies and operates in 190 markets; managing over 73 million active accounts. But, more importantly, PayPal is now available to online gamblers at more than 75 different online gambling institutions.
This efficient electronic payment solution eliminates the need for cheques and money orders to be used as a payment source. Instead users can pay for goods and services or pay anyone online who has an email address and all you need as a user is an email address. It's that simple! There is a bit of delay with verifying your address, credit card, and bank account, but this extra security measure reduces the risk of fraudulent activities and reassures you the user and the PayPal Casinos that the fraud department is really doing their homework. Another benefit of using PayPal in an online casino
and even Poker Rooms and Sportsbetting operations, is that the overhead costs are lower. This is due to the fact that cheque mailing and transaction fees have been reduced and allows online gambling operations to develop higher quality services and provide better Customer Support with their innovative payout tracking capabilities.
There are no fees to use PayPal for online gambling and you are not charged for receiving money into your account or for transferring it into you bank account. PayPal also offers a convenient debit card option, but your account must be a Premium account to use this option.
There are many sites out there that preach against the use of PayPal to conduct any transactions whatsoever citing a high risk of fraud, poor Customer Service, and several instances of non-payment. We say Rome was not built in a day. Sure, PayPal had its ups and downs but what good product didn't. It has taken time to perfect this online payment giant but it works and works well. If it didn't well-known sites such as Ladbrokes, 888.com, Betfair, Paddy Power, BWin, William Hill
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