For as long as people can remember, there is a close relationship between eBay and PayPal. Virtually in each case, PayPal is a mandatory option for anyone wanting to sell items on the global auction site. This situation will change in the future, since eBay announced its plan to abandon PayPal as the main payment option. This is a surprising turnaround, although it can be rather positive for both companies.
What's next for eBay?
It is obvious that limiting a global auction site to one main payment method and two or three optional payment methods is quite problematic. Especially in the era of digital payments and competing financial services, there is no reason for eBay to tie its fate to eBay. Even if the platform had a significant impact outside the online auction industry, it's still something that could hold eBay in the global market.
The number of current payment options on eBay is somewhat limited. Sellers are almost forced to activate PayPal, even if they prefer to be paid via bank transfer or money order. This has always been a problem, as users have never had a say. After so many years of giving PayPal the benefit of the doubt, it seems that the two companies will finally take different paths. This news could even be the result of the demarcation of PayPal as an independent brand some time ago.
With this change looming on the horizon, we will have to face a lot of speculation. Everyone wants to know if eBay will introduce a new mandatory payment method. If this is the case, there is no indication of what this could be, since the company has not announced any candidates. We know that the company is looking to integrate a new payment method created by Adyen, a German company that can provide access to many different payment methods.
According to Engadget, the integration of Adyen could take place as early as the second or third quarter of this year. This means that time is running out for PayPal, even if it will not be removed from eBay. Instead, PayPal will simply stop being the default payment method for the auction site. It remains to be seen if this decreases or not the attraction for PayPal. The company does not have the best reputations due to its strict regulation of accounts and its random security control system that prevent people from accessing their funds for up to 180 days.
It should also be noted that Adyen supports a large number of payment methods, including cryptocurrency, although it is not clear whether it will ever be part of the eBay platform. It makes sense for eBay not to reveal too much information as long as the new payment system is not fully tested and finished. All vendors of the platform will be introduced to this new payment method between late 2018 and early 2021. In addition, PayPal payments will remain available until July 2023.
With both companies seeming to end their long-term relationship, eBay recognizes that now is the time to offer an alternative option for both buyers and sellers. This new intermediate payment method will make it easier for sellers to track all their transactions. In addition, it will reduce the company's payment processing fees, which will increase eBay's revenue by up to $ 2 billion in the coming years.