eBay is dropping PayPal as its main payment provider

midian182

TechSpot Editor
Staff member

After being part of the same company for 12 years, eBay and PayPal split into two separate, publicly traded entities in 2015. But the pair signed a five-year operating agreement to keep a close relationship through to mid-2020. Now, eBay has announced it is moving away from the payment service.

eBay said it had signed an agreement that will see Adyen become its primary payments processing partner. The Amsterdam-based company, which offers back-end payment services to businesses, counts Netflix, Spotify, and Uber among its customers.

Adyen will offer an integrated payments solution within eBay itself, meaning you won’t have to log into a separate website for transactions. This should make paying on eBay a smoother experience and bring it in line with other retailers such as Amazon. The good news for most users is that the move will result in reduced payment processing charges, which can eat into sellers’ profits.

Despite charging less, eBay is expected to add $2 billion of revenue to its business once it starts taking the processing fees, according to Recode.

The new eBay payments system will arrive “on a small scale” in North America starting the second half of this year, before expanding in 2019 and each following year until 2021, when eBay expects the majority of customers to have transitioned. The company has negotiated new terms with PayPal that will see it remain as a payments option until July 2023, though it won’t feature as prominently.

Ayden brought in net revenue of $178 million in 2016, compared to PayPal’s near $11 billion. It’s thought that eBay might take an equity stake in its new payments partner, which is heading for an IPO this year.

PayPal’s share fell 10 percent on the back of the announcement, but after generating $2.61 billion in revenue during the latest quarter alone, it’s unlikely to be concerned.

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Squid Surprise

TS Evangelist
"PayPal’s share fell 10 percent on the back of the announcement, but after generating $2.61 billion in revenue during the latest quarter alone, it’s unlikely to be concerned."

Yeah... I call BS on that... You can bet your bottom dollar they ARE concerned!! How much of that $2.61 billion came from eBay? As of 2014, over 30% of Paypal's revenue came from eBay and over 50% of their profits!! While they have attempted to diversify in the past few years, I'm gonna bet a substantial amount of their revenue and profits still come from eBay...

Losing their most prominent client (and former owner) is not good news at all. Anyone who's invested in Paypal might want to reconsider that investment...
 

Uncle Al

TS Evangelist
You know, most similar services are set up to accept major credit cards OR debit cards ...... doesn't make sense to bring in a "non standard" system .....
 
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m4a4

TS Evangelist
TechSpot Elite
You know, most similar services are set up to accept major credit cards OR debit cards ...... doesn't make sense to bring in a "non standard" system .....
It's a convenience system. Once a customer has Paypal setup, they don't ever have to get up and get their wallets again. And Paypal would handle payment concerns.
Of course, such a service will require a little bit of a premium from the seller for such convenience...
 

Squid Surprise

TS Evangelist
It's a convenience system. Once a customer has Paypal setup, they don't ever have to get up and get their wallets again. And Paypal would handle payment concerns.
Of course, such a service will require a little bit of a premium from the seller for such convenience...
It's more than convenience.... If you don't trust the person you are buying/selling something from, you simply give them your paypal address instead. They never get your credit card #, so the worst thing that can happen is they don't pay after you ship (or they don't ship after you pay) which Paypal reimburses you for - in exchange you pay a % of the cost to Paypal...
 
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Evernessince

地獄らしい人間動物園
It's a convenience system. Once a customer has Paypal setup, they don't ever have to get up and get their wallets again. And Paypal would handle payment concerns.
Of course, such a service will require a little bit of a premium from the seller for such convenience...
It's more than convenience.... If you don't trust the person you are buying/selling something from, you simply give them your paypal address instead. They never get your credit card #, so the worst thing that can happen is they don't pay after you ship (or they don't ship after you pay) which Paypal reimburses you for - in exchange you pay a % of the cost to Paypal...
Well, technically PayPal forces the seller to reimburse you. Unless you are an avid online seller, they hold funds from sales up to 21 days. Which makes sense given all the scammers and poor sellers.
 

Tanstar

TS Evangelist
I might be done buying on ebay after they drop PayPal. I like the security and convenience of PayPal. Set it up once and then you can forget it. I prefer to buy from online shops that have PP, because that's one less site online that has my CC info and can get hacked. Sure, PP could be hacked themselves, but since their entire business is online financial transactions, they spend more on cyber security than most. I'm sure Ayden is just as secure as PP, but since I've never seen it as a payment option online, I would only use their service on ebay (not able to fully replace PP), making it just another place I have to give my info out to.
 

Squid Surprise

TS Evangelist
I might be done buying on ebay after they drop PayPal. I like the security and convenience of PayPal. Set it up once and then you can forget it. I prefer to buy from online shops that have PP, because that's one less site online that has my CC info and can get hacked. Sure, PP could be hacked themselves, but since their entire business is online financial transactions, they spend more on cyber security than most. I'm sure Ayden is just as secure as PP, but since I've never seen it as a payment option online, I would only use their service on ebay (not able to fully replace PP), making it just another place I have to give my info out to.
eBay will still let you use Paypal - it just won't be the "preferred option" like it is now. Of course, this is all fairly far into the future... by then, we may be making all of our transactions in cryptocurrencies :)
 

Tanstar

TS Evangelist
eBay will still let you use Paypal - it just won't be the "preferred option" like it is now. Of course, this is all fairly far into the future... by then, we may be making all of our transactions in cryptocurrencies :)
"The company has negotiated new terms with PayPal that will see it remain as a payments option until July 2023, though it won’t feature as prominently."
I took that to mean PP wouldn't be an option after 2023, but I guess they can always renegotiate then.
 

amghwk

TS Guru
I don't know. PayPal witholds seller's money for at least 2 weeks. For genuine small time home sellers who wish to sell off their stuff in the room online, are forced to wait. Even after pleading with them that the buyer had left a positive feedback after receiving it, they still don't get the money until the stipulated time. Sometimes shipping overseas costs quite an amount, and the sellers need to cover that costs too before shipping.

Anyway, paying via PayPal is less secure nowadays, since all it requires is the account passoword. There is no double confirmation from the bank by sending the TAC (Transaction Authorization Code) to the phone before approving. Approving with additional TAC may not be foolproof but the additional safety check is worth it.
 

Squid Surprise

TS Evangelist
"The company has negotiated new terms with PayPal that will see it remain as a payments option until July 2023, though it won’t feature as prominently."
I took that to mean PP wouldn't be an option after 2023, but I guess they can always renegotiate then.
It just means that Paypal WILL be an option until 2023.... That's when the contract expires... after that, it will be open to negotiations...
 

John J Miller

TS Rookie
Your information is not quite correct. PayPal only holds sellers funds UNTIL you pass a certain level of feedback (read that as NEW sellers ONLY)

And far as TAC goes, it's been available for quite some time. But you (the buyer) have to request it and set it up

And yes I know what I'm talking about. I've been an eBay seller and PayPal customer since 1998 (drmiler) with purple star rating at 100% positive feedback rating


I don't know. PayPal witholds seller's money for at least 2 weeks. For genuine small time home sellers who wish to sell off their stuff in the room online, are forced to wait. Even after pleading with them that the buyer had left a positive feedback after receiving it, they still don't get the money until the stipulated time. Sometimes shipping overseas costs quite an amount, and the sellers need to cover that costs too before shipping.

Anyway, paying via PayPal is less secure nowadays, since all it requires is the account passoword. There is no double confirmation from the bank by sending the TAC (Transaction Authorization Code) to the phone before approving. Approving with additional TAC may not be foolproof but the additional safety check is worth it.
 

tipstir

TS Ambassador
I used my PayPal Business Account with the latest card chip features. Don't get me wrong some cool looking features until I got Skimmers on my PayPal for some bogus company called Shell Oil in Miami. Hit me up 4 times. But my PayPal was attached to my Bank Account because the newest Paypal Business Card was forcing me to use my bank account as a backup. Well I tell you one thing Paypal Fraud Security is one of the worst I've seen. I told them what happen they told me all they can do is cancel my new card with them and send me out a new card. Well you know they allowed this fake Shell Oil company to still charge me. I got on the phone with corp Paypal they said they will give me back all the money that was charged me and plus what bank charges I would have been hit with. My bank had spoken to them in my presence. I learned one thing from all of this never use Paypal to buy gas just to get that 1% back. Not worth it if they don't protect you from Skimmers. I never had issues with Paypal and my Android customers for 7 years now but now using the card to buy gas has been the worst Nightmare. There are other companies beside Paypal to purchase online transactions. You really don't need to use them again. I still question they card services department. I gone with a different bank now which has the highest security against fraud.
 

seansplayin

TS Rookie
Personally I'm done with Ebay, I've had enough of their crappy policies like letting sellers wait for up to 4 days to respond to you after you receive broken or flat out the wrong goods. 3 of my last 4 orders had problems and waiting to get a response from a seller for several days is completely ridiculous and this doesn't happen seem to happen with Amazon. In the last 12 months I've spent in excess of $8K on Ebay, this will no longer be the case.
good bye Ebay