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February 2, 2018

eBay, PayPal breakup: A win for the consumer

By bringing transaction capabilities in house, eBay intends to streamline and enhance the user experience it offers.

By Tom Ball

In a bid to bring online payments in-house to streamline user experience, eBay is looking to end its historic partnership with PayPal with the standing deal set to expire in mid-2020.

Moving quickly, eBay has already lined up a payment provider to fill PayPal’s shoes, Adyen. The Dutch start-up is a provider of backend payment services, capabilities that will allow eBay to take payments into its own hands to a greater extent.

The news has been a body blow for PayPal that took a toll on the company’s share price; while in contrast, eBay experienced a frenzied reaction that sent its share price soaring.

eBay, PayPal breakup: A win for the consumer

Scott Lester, CEO, Flixmedia, said: “eBay dropping PayPal as its primary payments provider is a win for consumers and another step in the evolution of the shopping experience.”

Consumers today are increasingly demanding streamlined services that fluidly allow transactions to be made, contrasting the external process required to make eBay purchases.

“With most of us now familiar with online shopping, focus has shifted from simply delivering a great customer journey, to how to deliver the best customer journey. Personalisation and product discovery have been souped-up as a result, but less attention has been paid to the far less sexy arena of payments,” Lester said.

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PayPal has entered into a string of partnerships in recent times to offer its services, last year the company signed deals with the likes of Android, and strengthened ties with JPMorgan Chase and Citi.

“Offering a greater choice of payments options for consumers, an integrated checkout which doesn’t disrupt and divert the shopping experience, and low – or no – processing fees are now major points of differentiation. Details are flaky at present, but thanks to eBay’s move we can likely expect the marketplace to lay claim to all of these.”

Another benefit Adyen can bring to eBay is its ability to provide a global reach by allowing customers to pay in 150 currencies.

As reported by CNBC, Adyen CEO and co-founder Pieter van der Does said: “We are thrilled that eBay, one of the most successful e-commerce companies of all time, has chosen Adyen as its new, global payments processing partner. Adyen is uniquely positioned to meet the needs of high volume global marketplaces like eBay. We look forward to powering transactions on eBay, starting in North America, and supporting their continued global growth.”

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