7 of PayPal's Biggest Rivalries

June 3, 2016 2:01 AM

People stand around a bar displaying PayPal's logo at an event hosted by PayPal in New York, U.S., on Tuesday, November 09, 2010. Photographer: Michael Nagle/Bloomberg

Michael Nagle/Bloomberg

As PayPal has grown over the years, it has made enemies. Some of these rivalries were short-lived, while others persist to this day.

Charles Scharf, chief executive officer of Visa Inc., speaks during the Institute of International Finance G-20 Conference in Shanghai, China, on Friday, Feb. 26, 2016. The conference runs through Feb. 26. Photographer: Qilai Shen/Bloomberg *** Local Caption *** Charles Scharf

Qilai Shen/Bloomberg

Visa

PayPal has a longstanding practice of cutting costs by urging consumers to fund their accounts via ACH transfers instead of card payments and Visa is not happy about this. "What they do as a business is not good for us or for our clients," Visa CEO Charlie Scharf (pictured) said in a recent speech. "People talk about 'frenemies,' and there is no such thing in my mind. You are either one or the other."

A customer looks at an Apple Inc. iPhone 6s Plus at an Apple store in Palo Alto, California, U.S., on Friday, Sept. 25, 2015. From Sydney to New York, some of the Apple faithful waited in lines for more than two weeks to be among the first to receive the new iPhone 6s and 6s Plus. Photographer: David Paul Morris/Bloomberg

David Paul Morris/Bloomberg

Apple

When Apple Pay launched, PayPal was conspicuously absent from the long list of supporters. While PayPal told investors it was "hopeful" the two companies could come to terms, it was also engaged in a major marketing campaign slamming Apple's reputation in the wake of the infamous iCloud nude photo breach.

PayPal and eBay Inc. flags fly in front of the company's headquarters in San Jose, California, U.S., on Tuesday, Sept. 30, 2014. EBay Inc. is spinning off its PayPal division, heeding demands by activist shareholder Carl Icahn and giving the business independence it can use to contend with rising competition from Apple Inc. and Google Inc. Photographer: David Paul Morris/Bloomberg

David Paul Morris/Bloomberg

eBay and Billpoint

Before eBay purchased PayPal in 2002, the online marketplace developed a competing system with Wells Fargo called Billpoint. Though Billpoint was formed just half a year after PayPal launched, it couldn't catch PayPal's momentum, in part because Billpoint limited itself to eBay transactions and PayPal did not.

Close-up Of Male Judge In Front Of Mallet Holding Documents

Photographer: Andrey Popov

The Law

In its earliest years, PayPal ran afoul of New York prosecutors who did not want it handling payments for online gambling sites. PayPal agreed to a $200,000 settlement in 2002, shortly before finalizing its purchase by eBay, which officially cut the unit's ties to online gambling sites.

Zef Nikolla

Braintree, Bill Me Later

Over the years, PayPal has developed a habit of buying the companies it couldn't destroy through competition. These include Braintree, which reinvigorated PayPal's ailing relationships with developers; and Bill Me Later, maker of an instant credit offering that won the business of numerous online merchants.

Computer hacker silhouette of hooded man with internet login screen concept for security, phishing and hacking network account username and password

Igor

Igor was the username of an especially hard-working con artist who bedeviled PayPal in its early years. According to PayPal co-founder Max Levchin, PayPal would not have survived if it did not find a way to outsmart Igor. The end result, unveiled in 2000, was some of the financial industry's earliest technology for monitoring online transactions. PayPal named this system "Igor" in honor of its old nemesis.

The Kickstarter crowdfunding logo is displayed on the screen of an Apple Inc. iPhone 6 in this arranged photograph taken in London, U.K., on Friday, May, 15, 2015. Facebook Inc. reached a deal with New York Times Co. and eight other media outlets to post stories directly to the social network's mobile news feeds, as publishers strive for new ways to expand their reach. Photographer: Chris Ratcliffe/Bloomberg

Chris Ratcliffe/Bloomberg

Crowdfunding

The concept of crowdfunding wherein companies use sites like Kickstarter and Indiegogo to request funds for a product they have yet to release didn't sit well with PayPal's fraud-screening and compliance rules. Thus, the crowdfunding community saw PayPal's policies as an impediment to the new business model.