eBay will Soon Shift Away from Paypal Payments to New Processing System

In the coming three years, eBay will slowly transition away from using Paypal as their main payment processor to a more integrated system run by Adyen. Paypal shares dropped more than 10% in after-hours trading on the news. Paypal was spun off from eBay as a separate company in July 2015.

Press Release

While Paypal will remain an option until at least 2023, the primary payment processor will become Adyen, a little-known Dutch payment company with 600 employees. eBay notes a few advantages of the new system including:

  • more payment options for buyers (not sure exactly what this refers to, might be things for international markets, not so much for your typical American purchaser)
  • lower fees for sellers (Paypal charges 2.9%, the new system will apparently be lower)
  • an integrated system where sellers and buyers have everything within the eBay system without the current split-system of eBay and Paypal

The final point is likely the key point; Currently, it’s often confusing and cumbersome for both buyers and sellers to have to deal with two separate companies. Compare that with a seamless system by a retailer like Amazon, for example. It seems the goal is for Adyen to be in the background (similar to how Stripe works), and all payment interactions will run directly with an eBay payments team.

Interesting that eBay didn’t take this entirely in-house like Amazon does, presumably they aren’t big enough to effectively handle that. It’ll also be interesting to see what happens with the eBay and Paypal credit cards from Synchrony as eBay and Paypal complete their separation.

Key dates:

  • The eBay/Paypal operating agreement remains in place until July 2020, five years from when the companies split.
  •  eBay and PayPal have aligned on terms to offer PayPal as a way to pay at checkout until July 2023. No word on whether they’ll remain an option after that point.
  • eBay will begin they payments system on a small scale in North America starting in the second half of 2018, expanding in 2019 under the terms of the Operating Agreement with PayPal.
  • By July 2021, eBay expects to have transitioned all sellers to the new payments platform.

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23 Comments
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Jason
Jason (@guest_556975)
February 2, 2018 12:55

Now I really like the message when I login to my paypal account since 2003:
You can’t use PayPal anymore

I want to tell PayPal: Ebay don’t use Paypal anymore!

Russ
Russ (@guest_556724)
February 1, 2018 18:39

Let’s hope Ayden doesn’t implement endless verification loops like Paypal!

Parkerthon
Parkerthon (@guest_556411)
February 1, 2018 10:11

The question is, how many customers did eBay lose over the years because of PayPal? Both buyers and sellers even. I had many difficult experiences over the years where paypal were complete aholes and it had nothing to do with violating any terms. They just wouldn’t support you as a buyer or seller after the fact that they made their money. Together with eBay, that company was the definition of abusive. The middle man payment processing service made sense up until the early 2000’s, maybe… After that Amazon and other ecommerce sites started taking business away from them in droves. Their greed blinded them. Just desert.

Zee
Zee (@guest_556394)
February 1, 2018 09:29

Thank God. I hope Paypoo is going out of business very soon. I don’t shop on eBay anymore because of this terrible payment processing company.

Matt
Matt (@guest_556305)
February 1, 2018 00:23

I’m much more likely to use eBay now. PayPal is really a hiorrible company to deal with.

Eddie
Eddie (@guest_556304)
February 1, 2018 00:19

Will this affect the use of eBay gift card? Currently paypal account is needed to redeem eBay gift card.

Andrew
Andrew (@guest_556294)
February 1, 2018 00:00

the lower processing fees will be nice. browsing around Adyen is 12 cent vs paypal’s 29 cent processing fee is nice. I can imagine the percent will be a lot less.

ben
ben (@guest_556268)
January 31, 2018 23:06

I’M SO EFFING HAPPY! I hope PayPal goes bankrupt soon. Such a evil company. I stopped using eBay for years mainly because I was banned from PayPal.

redbird
redbird (@guest_556261)
January 31, 2018 22:53

Hopefully it mean less PITA experiences when buying GCs from PPDG on eBay.

projectx
projectx (@guest_556259)
January 31, 2018 22:49

That’s the sound of karma, PayPal. Good riddance.

escot
escot (@guest_556373)
February 1, 2018 06:10

+1

TD
TD (@guest_556978)
February 2, 2018 13:11

+1