Congrats, in the end...
> "If they didn't have Max, they might have succumbed, because PayPal was
> susceptible to fraud and money laundering, and Max tightened them up,"
http://www.infoworld.com/articles/ct/xml/02/09/02/020902ctspotlight.xml
Secure and at ease
By Jack Mccarthy
August 30, 2002 1:01 pm PT
MAX LEVCHIN'S FASCINATION with encryption started when he was a teenager
in Kiev, Ukraine, and continued as he immigrated to the United States
where he attended the University of Illinois at Urbana-Champaign. In
late 1998, not two years out of college, he drew on his passion to
co-found PayPal, the online payment system that has since attracted tens
of millions of users and gained the reputation as the premier Internet
transaction processor. Now online auction house eBay has acquired his
company for a king's ransom.
Not bad for a 27-year-old kid from Ukraine.
A programmer since he was 10 years old, Levchin and his family moved to
Chicago in 1991, and since then he has pursued security as if on a
mission. He created a startup right out of college to build secure
passwords for Palm Pilots. He met Peter Thiel, and the two founded
PayPal to target online payment security. Thiel is now CEO of the
company.
"This company was founded on the notion of security value," Levchin
says. "Peter Thiel and I shared that vision from the very beginning."
Thiel concentrates on company business matters, whereas Levchin remains
focused on security, which he says is the key to the company's good
fortune.
"I explain [PayPal] as a security company posing as a transaction
processor," Levchin says. "We spend a lot of time designing security so
it doesn't step on the toes of convenience and not the other way around.
The trade-off is fundamental."
Mountain View, Calif.-based PayPal allows businesses and consumers with
e-mail addresses to send and receive payments via the Internet,
accepting credit card or bank account payments for purchases. The
service extends to 38 countries, with more than 17 million users and
more than 3 million business accounts.
Most of PayPal's users are participants in online auctions, which led
PayPal to be closely linked with eBay, the leading Web auction site.
Although they were once rivals, the relationship between the two
companies resulted July 8 in eBay's tentative $1.5 billion acquisition
of PayPal. The agreement is subject to regulatory review.
Levchin says he will stay at PayPal as it merges with eBay. "There are
areas of synergy and collaboration we can explore."
Although security is a dominant feature for PayPal, the company's
ability to carry out open communications among the millions of
participants fits the growing Web services model, Levchin says.
"This is a service that links people and allows them to send messages to
one another," he says. Levchin is a panelist at InfoWorld's
Next-Generation Web Services II conference Sept. 20
PayPal, as an online payment system, is a natural target for fraud. And
Levchin has almost singlehandedly saved the company from thieves bent on
exploiting the system, says Avivah Litan, a vice president and analyst
covering financial services at Stamford, Conn.-based Gartner.
"If they didn't have Max, they might have succumbed, because PayPal was
susceptible to fraud and money laundering, and Max tightened them up,"
Litan says.
To combat criminals, Levchin established "Igor," an antifraud program
that monitors transactions and warns of suspicious accounts. Levchin
says building security and antifraud systems is a job he relishes. "The
work I do is important to PayPal and to consumers in general because the
work makes Internet shopping safe. It's the view that ecommerce has
arrived."