The license, granted by the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg, kicks in July 2. As a result of obtaining the license, PayPal will move its European headquarters to Luxembourg from the United Kingdom. Until now, PayPal has operated in Europe as an electronic money issuer, which prevented it from selling its services directly to merchants in individual countries due to regulatory restrictions. Instead, it has had to conduct its European sales efforts in cross-border fashion from the United Kingdom. PayPals announcement comes about a month after rival Google launched the competing service Google Checkout for merchants in the United Kingdom and announced its intention to continue rolling it out to merchants in other countries. Previously, it had only been available to U.S. merchants. Launched in June 2006, Google Checkout is seen as a viable competitor for PayPal, which was founded in 1998 and acquired by eBay in 2002. PayPal, based in San Jose, Calif., doesnt have a banking license in the United States, where it instead operates as a licensed money transmitter on a state-by-state basis.
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