Earlier today, eBay announced that it’s dropping PayPal as its main partner for processing.
In PayPal’s place, eBay will partner up with Adyen, an Amsterdam-based payments company that was founded in 2006. Adyen has processed payments for companies like Uber, Groupon, Netflix and Spotify among its customer base and now scooped up its biggest client ever.
Unlike Paypal, Adyen’s business is focused on providing back-end payments services like credit card processing to businesses, so you won’t see any Adyen payment options eBay. Rather, Adyen will become the primary payments processor for eBay sites around the world so they’ll be distributing funds from buyers to the sellers.
eBay released this statement:
“eBay has signed an agreement with Adyen, a leading global payments processor, to become its primary payments processing partner.
eBay intends to further improve its customer experience by intermediating payments on its Marketplace platform. In doing so, eBay will manage the payments flow, simplifying the end-to-end experience for buyers and sellers. eBay has signed an agreement with Adyen, a leading global payments processor, to become its primary payments processing partner. PayPal, a long-time eBay partner, will be a payments option at checkout for eBay buyers. The transition to full payments intermediation will be a multi-year journey, and eBay will move as quickly as possible to complete this process within the parameters of the Operating Agreement with PayPal, which remains in place through mid-2020.
As a leading global commerce company, eBay believes that payments intermediation is strategically important to improve the buyer and seller experience on its platform and will enable the company to further innovate on behalf of its customers. In a rapidly changing and competitive ecommerce landscape, shoppers expect to be able to both shop and checkout on the site on which they transact. As eBay intermediates payments, shoppers will be able to complete their purchases within eBay. As a global marketplace that operates in over 190 markets, eBay also must continue to provide localized payment options for buyers and sellers that are tailored to their unique needs.”
The existing eBay-PayPal agreement runs until 2020, so until then, Paypal will remain a payment option for shoppers on eBay, but it won’t be prominently featured ahead of debit and credit card options as it is today.
EBay said the switch would save sellers on their payments received and will give buyers more payment options at checkout.
Following the announcement, eBay’s stock jumped 15% while PayPal’s stock took a 12% tumble.
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