Actually, I was the pioneer of that type of transaction. I got my friend to set up a company in 1996 called virtualwire.com. They took your credit card, and then they would send it to any one of their registered merchants. They would send an email to the mercahant to confirm that the money was good. they got shut down before they saw 10 transactions, they didn't have the clout or the financial muscle that Paypal did.
In the spring of 2001, I spoke at a gaming conference in Miami. I met some of the Paypal people there including one of their senior executives. He told me we want to get into the gaming business and we are willing to fight with you and we are not afraid. I said great, could use the support.
So they got into it, and if I recall it was the gaming sector that took them from the red to the black. Then they went public. Then they got bought by Ebay. Within days of the Ebay deal, someone did an expose that they made a lot of money from the online gaming business. Then came the threatening letters from Spitzer. Then within weeks Paypal left the online gaming sector.
Thanks for all of your support Paypal, glad you were not afraid and willing to stand up to the governmemt.
