eBay deserts PayPal, announces Adyen as new payments partner

In what can be touted to be one of the major breakthroughs witnessed across the digital payment sector, eBay Inc., the globally renowned eCommerce corporation headquartered in California, has announced that it intends to take over the customer payment business from PayPal. Post the expiry of eBay’s contract with PayPal in mid-2020, the firm plans to hire the services of Adyen, the Dutch fintech company, to facilitate online payment processing for its customers.

For the uninitiated, PayPal has been associated with eBay since the last fifteen years, post its acquisition by the eCommerce giant in July 2002. Company sources state that PayPal’s online payment dealings through eBay contribute nearly 13% toward its total processed payments. With eBay’s announcement to part ways with its long-term partner, PayPal’s stocks dipped by over 8%, while the share price of eBay displayed a rise by 15%. Some of the key officials of eBay have stated that the firm will add nearly USD 500 million to its operating profits after the expiration of its contract with PayPal.

PayPal, which was spun off from eBay in 2015, had apparently generated additional 8.7 million user accounts in the fourth quarter of 2017. In fact, analysts estimate the creation of nearly 227 million active user accounts by the end of the previous year. The firm had also processed payments worth USD 131 billion during the last quarter of 2017 with nearly 33.6 online payment transactions for every active user account.

Prior to the announcement of the contract termination between the two firms, the net income of PayPal during the fourth quarter of 2017 was reported as USD 620 million. eBay’s revenue during the last quarter of 2017 was apparently reported to be USD 9.6 billion, up by 7% as compared to its revenue during the same quarter of 2016.