UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 21 30, 2002

	PAYPAL, INC.
	(Exact name of registrant as specified in its charter)

	000-49603
	(Commission File Number)

Delaware (State or other jurisdiction of incorporation or organization) 77-0510487 (I.R.S. Employer Identification No.)

Delaware

77-0510487

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer Identification No.)

	303 Bryant Street
	Mountain View, California 94041
	(Address of principal executive offices, with zip code)

(650) 864-8000 (Registrant'’s telephone number, including area code)

	Not Applicable
	(Former name or former address,
	if changed since last report)

Item 5. Other Events.

~~Special Meeting of Stockholders~~ Patent Litigation

InOn aSeptember ~~press~~6, ~~release~~2002, First ~~dated~~USA ~~August 21~~Bank, ~~2002,~~N.A. filed a lawsuit for patent infringement against PayPal, Inc. ~~announced~~in ~~that~~the aUnited ~~special~~States ~~meeting~~District Court for the District of Delaware, ~~its~~Case ~~stockholders~~File No. 02-CV-1462. First USA is ~~scheduled~~a tonational bebanking ~~held~~association onwith ~~Thursday,~~its principal place of ~~October 3~~business in Wilmington, ~~2002~~Delaware toand ~~vote~~a onsubsidiary ~~eBay Inc~~of Bank One Corporation.'s The ~~pending~~lawsuit ~~acquisition~~claims ofthat PayPal is infringing two U.S. ~~Stockholders~~patents ofowned ~~record~~by ofFirst ~~PayPal~~USA: U.S. atPatent ~~the~~Number ~~close~~6,227,447, ofentitled ~~business~~“Cardless Payment System,” and U.S. Patent Number 6,341,724, also entitled “Cardless Payment System.” The First USA patents were issued on ~~August 28~~May 8, 2001 and January 29, 2002, ~~the~~respectively, ~~record~~and ~~date~~relate to a system and method for assigning ~~the~~an ~~special~~alias, such as a phone number and a personal identification ~~meeting~~number, ~~are~~to ~~entitled~~a credit card so as to ~~receive~~eliminate ~~notice~~the need for the physical presence of ~~and~~a ~~vote~~card atduring a transaction. First USA’s suit seeks to enjoin PayPal from offering services that infringe the patents ~~special~~and ~~meeting~~to obtain damages to compensate First USA for the alleged infringement. First ~~The~~USA ~~press~~has ~~release~~not provided isany ~~attached~~information ~~hereto~~beyond asthe ~~Exhibit 99~~summary allegations in its lawsuit regarding how PayPal is infringing their patents.1 PayPal is reviewing these patents and ~~incorporated~~their ~~herein~~prosecution byhistory, and ~~reference.~~intends to contest the suit vigorously.

Class Action ~~Attorney~~Litigation—Ruling ~~General~~Against ofEnforceability ~~the State~~ of ~~New~~PayPal’s ~~York~~Arbitration ~~Inquiry~~ Clause

InAs apreviously ~~separate press release dated August 21~~disclosed, PayPal ~~2002,~~is ~~PayPal~~the ~~announced~~subject ~~that~~of ittwo ~~reached~~class anaction ~~agreement~~lawsuits ~~with~~in the ~~New~~U.S. ~~York~~District ~~State Attorney General in his previously~~Court ~~announced~~for ~~inquiry~~the ~~into~~Northern ~~payments~~District ~~made~~of ~~through~~California ~~PayPal's~~alleging ~~service~~violations ~~to online gambling merchants. In an Assurance~~ of ~~Discontinuance made to~~ the ~~New York Attorney General, PayPal has agreed to cease~~Electronic ~~processing~~Fund ~~payments~~Transfer ~~from~~Act ~~its~~(one ~~New~~of ~~York~~the ~~members~~suits toalso ~~online~~alleges ~~gambling~~other ~~merchants~~violations byof ~~September 1, 2002~~law). PayPal ishad ~~taking~~moved ~~this action in voluntary cooperation with~~ the ~~Attorney~~court ~~General~~for ~~and~~an ~~is not~~order ~~admitting~~compelling toindividual aarbitration ~~violation~~ of ~~law.~~the ~~The~~claims ~~Attorney~~asserted ~~General~~by ~~has~~the ~~agreed~~named plaintiffs, pursuant to ~~accept~~the PayPal's ~~assurance~~User ofAgreement, ~~discontinuance~~which inrequires ~~lieu~~that ofsuch disputes ~~commencing~~be aresolved ~~statutory~~by ~~proceeding.~~individual ~~PayPal~~arbitration ~~has~~of ~~also~~claims. In ~~agreed~~a todecision ~~pay~~dated ~~penalties~~August 30, ~~of $200~~2002,~~000~~ the toDistrict ~~the~~Court ~~State~~denied ofPayPal’s ~~New~~motion ~~York~~and toruled ~~cover~~that the ~~Attorney~~arbitration ~~General'~~clause in PayPal’s ~~costs~~User ofAgreement ~~investigation.~~is Asnot ~~previously announced, eBay Inc~~enforceable. ~~intends to discontinue~~ PayPal's ~~current~~will ~~business~~continue ~~operations related~~ to ~~payment~~defend ~~processing~~these ~~transactions~~lawsuits ~~for~~vigorously, ~~merchants~~and ~~involved~~believes that ~~in online gambling activities after~~ it ~~completes~~has ~~its~~meritorious ~~acquisition of PayPal~~defenses. PayPal ~~The~~could ~~press~~also ~~release~~appeal isthe ~~attached~~District ~~hereto~~Court's ~~as Exhibit 99~~ruling.~~2 and incorporated herein by reference.~~

~~Item 7. Financial Statements, Pro Forma Financial Information and Exhibits~~ SIGNATURES

Exhibit No.		Description
99.1		Press Release dated August 21, 2002
99.2		Press Release dated August 21, 2002

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		PAYPAL, INC.


		/s/ Roelof F. Botha

		By: Roelof F. Botha
Date: September 12, 2002		Its: Chief Financial Officer

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PAYPAL, INC.
	/s/ ROELOF F. BOTHA
Date: August 21, 2002	By: Roelof F. Botha Its: Chief Financial Officer

EXHIBIT INDEX

Exhibit No.		Description
99.1		Press Release dated August 21, 2002
99.2		Press Release dated August 21, 2002

QuickLinks

Filing Compare · PAYPAL INC