PALO ALTO, Calif. — PayPal, the person-to-person Internet payment subsidiary of X.com, announced that it has more than five million registered users and has processed more than $1 billion of payments since it was founded in December 1998.

The company said it adds 20,000 users per day.

“Reaching more than five million users demonstrates that the network effect is clearly at work and people want to use the online payment service their friends are using,” said Peter Thiel, chairman and co-founder of PayPal.

The service is free to consumers. Bank One’s competing emoneymail service charges $1 per payment, and Citibank’s C2citi charges $2.

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