InfoWorld profile of Max Levchin

[Rohit Khare]

Congrats, in the end...
> "If they didn't have Max, they might have succumbed, because PayPal =
was=20
> 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=A0Jack Mccarthy
August 30, 2002 1:01 pm PT

MAX LEVCHIN'S FASCINATION with encryption started when he was a teenager=20=

in Kiev, Ukraine, and continued as he immigrated to the United States=20
where he attended the University of Illinois at Urbana-Champaign. In=20
late 1998, not two years out of college, he drew on his passion to=20
co-found PayPal, the online payment system that has since attracted tens=20=

of millions of users and gained the reputation as the premier Internet=20=

transaction processor. Now online auction house eBay has acquired his=20
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=20=

Chicago in 1991, and since then he has pursued security as if on a=20
mission. He created a startup right out of college to build secure=20
passwords for Palm Pilots. He met Peter Thiel, and the two founded=20
PayPal to target online payment security. Thiel is now CEO of the=20
company.

"This company was founded on the notion of security value," Levchin=20
says. "Peter Thiel and I shared that vision from the very beginning."

Thiel concentrates on company business matters, whereas Levchin remains=20=

focused on security, which he says is the key to the company's good=20
fortune.

"I explain [PayPal] as a security company posing as a transaction=20
processor," Levchin says. "We spend a lot of time designing security so=20=

it doesn't step on the toes of convenience and not the other way around.=20=

The trade-off is fundamental."

Mountain View, Calif.-based PayPal allows businesses and consumers with=20=

e-mail addresses to send and receive payments via the Internet,=20
accepting credit card or bank account payments for purchases. The=20
service extends to 38 countries, with more than 17 million users and=20
more than 3 million business accounts.

Most of PayPal's users are participants in online auctions, which led=20
PayPal to be closely linked with eBay, the leading Web auction site.=20
Although they were once rivals, the relationship between the two=20
companies resulted July 8 in eBay's tentative $1.5 billion acquisition=20=

of PayPal. The agreement is subject to regulatory review.

Levchin says he will stay at PayPal as it merges with eBay. "There are=20=

areas of synergy and collaboration we can explore."

Although security is a dominant feature for PayPal, the company's=20
ability to carry out open communications among the millions of=20
participants fits the growing Web services model, Levchin says.

"This is a service that links people and allows them to send messages to=20=

one another," he says. Levchin is a panelist at InfoWorld's=20
Next-Generation Web Services II conference Sept. 20

PayPal, as an online payment system, is a natural target for fraud. And=20=

Levchin has almost singlehandedly saved the company from thieves bent on=20=

exploiting the system, says Avivah Litan, a vice president and analyst=20=

covering financial services at Stamford, Conn.-based Gartner.

"If they didn't have Max, they might have succumbed, because PayPal was=20=

susceptible to fraud and money laundering, and Max tightened them up,"=20=

Litan says.

To combat criminals, Levchin established "Igor," an antifraud program=20
that monitors transactions and warns of suspicious accounts. Levchin=20
says building security and antifraud systems is a job he relishes. "The=20=

work I do is important to PayPal and to consumers in general because the=20=

work makes Internet shopping safe. It's the view that ecommerce has=20
arrived."