Few things revolutionised the world of online banking quite like the launch of PayPal. The online payment system was launched with its current name in March of 2000, going through an Initial Public Offering two years later. Initially linked with eBay, which it became a wholly owned subsidiary of, the payment system has grown exponentially since then and is accepted as a payment method by all major online companies. This includes most of the biggest bookmakers, but not all of them will allow you to deposit funds from and accept withdrawals to the eWallet.
As with virtually all banking systems, PayPal charges fees for the processing of payments. This means that companies effectively need to pay in order to allow customers to use it as a banking method, which makes it really hard for some of the smaller betting sites that you might use to justify using. The fees are often much higher than the likes of banks and lesser-known eWallets charge, so some betting sites merely choose not to offer PayPal as a deposit method. This is obviously a shame for those that use it all the time, but it’s a necessary must for the sites themselves.
What Is PayPal?
It is easy to forget that not everyone that uses the internet for transactions such as buying clothes or placing bets is au fait with how it works and the systems that are offered by it. As a result, some people will only have a passing sense of what PayPal is and how it works, whilst even the most competent at using it as a payment method might be unaware of the company’s history. Established as Confinity by Max Levchin, Peter Thiel and Luke Nosek in December of 1998, the company originally developed security for handheld devices.
When the company had no real success with that business model, a decision was taken to change direction and became a digital payment system. The first version of an electronic payments system that would later become PayPal was launched in 1999, then in March of 2000 the company merged with x.com, an online financial services company. That had been launched by Elon Musk, Harris Fricker, Christopher Payne and Ed Ho, at least some of the names even the most tech-wary will surely recognise thanks to their exploits in the years since then.
In fact, without PayPal we would not have Elon Musk as the richest person in the world, Tesla or a private capitalist space company who will be able to send only the richest of the rich into space.
X.com terminated other money transfer businesses in October of 2000, instead opting to concentrate on PayPal, naming the entire company that in 2001. In 2002 the company went public, generating more than $61 million during its Initial Public Offering. Not long after that, eBay bought the company for $1.5 billion in stock, with PayPal soon becoming the default payment method on the platform. Added security was offered thanks to the acquisition of VeriSign in 2005, then in 2007 a partnership with MasterCard was announced, leading to the launch of the PayPal Secure Card service.
By 2010, more than 100 million active users had PayPal accounts, based across 190 markets. The company continued to take over other businesses and to grow as much as possible, then in September of 2014 it was announced that PayPal would be splitting from eBay and becoming a separate publicly traded company. This was completed in July of the following year, with PayPal having been a separate entity ever since. In short, there are very few sites on the internet that either won’t accept PayPal or have never done so, showing just what a financial powerhouse the company really is.
How PayPal Works
In short, PayPal gives people the chance to make financial transactions online, granting users the ability to transfer funds between individuals and businesses electronically. It isn’t even necessary to have a PayPal account in order to use the company’s services, which is a large part of the reason for its growth. It is most common for people to load a debit card or bank details to their PayPal account, which allows them to move money from their account to wherever it is that they’re making a payment. Since October 2020, PayPal customers have also been allowed to use crypto currencies to make payments.
It is not necessary to load money into your PayPal account. Instead, when you login and give permission for a merchant to take money from your PayPal, the company contacts your bank and arranges for the money to be transferred. This allows a layer of anonymity to be put in place between your bank and the company you’re sending money to, which is why it can be a popular method of payment for those that are signed up to use online betting account like bookmakers and casinos. The company does charge for its services, but not in all instances.
PayPal, and eWallets in general, have become popular for online gambling also because they offer the fastest withdrawal method. You can pay for other goods and services through PayPal and other wallets and with withdrawals available sometimes in minutes (and if not hours or a maximum of a day or two) it means customers can use their funds a lot quicker compared with conventional bank withdrawals.
Why Not All Bookies Offer PayPal
If you’re using PayPal to make a payment to another person, you do not tend to get charged a fee for doing so. Indeed, you don’t usually get charged a fee to make a payment to a company, but what you may not realise is that that company will be charged a fee for allowing payments to be made via PayPal. In other words, the customer doesn’t notice but the company that they’re dealing with most certainly does, given that they tend to have to cover the cost of the transaction by paying PayPal’s fees as part of their business model.
This might not seem all that significant, but even a small fee can soon add up when you consider the number of people that might be using PayPal to get money into their betting accounts at any given moment. For this reason, a lot of the smaller companies choose to simply not accept payment via PayPal, rather than accept it as a payment method and then pay the fees. On top of that, verification can also be a problem when a customer is using PayPal, which is important as part of the United Kingdom Gambling Commission’s Know Your Customer rules and regulations.
What you may also notice is that even when you do find sites that accept PayPal deposits and withdrawals that the minimums tend to be higher compared to debit cards. In fact, at times it can also be higher than other eWallets like Skrill and Neteller thanks to the fact PayPal charge higher fees.
You may also notice the deposit and withdrawal maximums are lower compared to conventional banks and this is again down to the lower money laundering protections that eWallets offer.
Finally you may find you are excluded from welcome bonuses when using PayPal to make an initial deposit. This is down to bonus abuse in the past where people have set up duplicate accounts using eWallets. Therefore, bookies and casinos often will not provide introductory offers to customers who deposit this way.