eBay has announced to drop PayPal as its primary payment provider by replacing it with Adyen. eBay and PayPal have been same company for 12 years before their split in 2015. Both the companies signed a five-year operating agreement to keep a close relationship through to mid-2020 aftre the separation, when they started to trade as two separate publicly traded entities.
The new primary payment processor Adyen is an Amsterdam-based company which provides back-end payment services to many renowned businesses like Netflix, Spotify, and Uber. As compared to paypal payments, now users won’t have to log into a separate website for transactions because Adyen will offer an integrated payment solution within eBay website.
Though PayPal will remain as a payments option until July 2023 as an agreement between both companies, but PayPal’s share fell 10 percent on the back of this news. eBay has announced that the new payment system will be implemented in steps starting in North America from the second half of this year and then will expand year by year till 2021.
This new step taken by eBay will definitely help most of the sellers to reduce processing charges. At the same time, eBay is expected to add $2 billion of revenue to its business with this move.