PayPal was originally named Confinity before adopting the PayPal name.
Confinity was founded in December 1998 by Max Levchin, Peter Thiel, and Luke Nosek. The company initially worked on security software for handheld devices, then focused on a service for transferring money using Palm Pilot devices. It later developed an email-based payments product, which became the business associated with PayPal.
Confinity merged with X.com, an online banking company founded by Elon Musk, in 2000. The combined company eventually adopted the PayPal name. PayPal’s growth was helped by its use on eBay, where online buyers and sellers needed a convenient way to send and receive payments.
The corporate history can be confusing because the PayPal brand, Confinity, X.com, and the later public company belong to different stages of the story. The answer refers specifically to the company’s original corporate name before the PayPal identity became dominant.