Ebay sent an email to members last night explaining that it’s going to be replacing PayPal as its main payment intermediary. It’s going to be shifting to Dutch payments processor Adyen.
PayPal has been eBay’s main payments provider since 2003. Until 2015, it was a subsidiary of the company. When PayPal split from eBay, people wondered when they could finally use PayPal with competitors like Amazon.
Many major retail chains accept PayPal as a payment option, including Home Depot, Albertsons/Safeway, and Dillards.
Although the move sent PayPal’s stock prices down today, eBay’s are on the rise. As an eBay seller myself, I’m cautiously optimistic on how this new arrangement will work.
On one hand, it promises to lower seller costs. Currently eBay charges a final transaction fee, and PayPal also takes a cut when the money is deposited. Having these fees lowered would be great.
On the other hand, I use PayPal quite often, and whatever I make selling on eBay would eventually need to be transferred either to PayPal or a bank account, which could result in an additional fee, negating the savings.
Either way, by 2021, eBay will have made the transition, which it calls a “multi-year journey.”
Here’s the full text of eBay’s email.
eBay is happy to announce plans to further improve the customer experience by intermediating payments on our Marketplace platform. In doing so, eBay will manage the payments flow, simplifying the end-to-end experience for both buyers and sellers. We have signed an agreement with Adyen, a leading global payments processor, to become our primary payments processing partner. PayPal, a long-time eBay partner, will be a payments option at checkout for eBay buyers.
You do not need to take any action at this time. The transition to full payments intermediation will be a multi-year journey.
Over the past three years, eBay has transformed its business to drive the best choice, most relevance and most powerful selling platform. Building out our payments capabilities is the next step in that strategy.
Payments intermediation will bring significant benefits for eBay sellers. You can expect a simplified pricing structure, more predictable access to funds, and most sellers can expect their costs of payments processing to be reduced. We’re also working on ways to provide sellers a central place to track and manage their business, which can soon include payments information.
By offering buyers more choice in how they pay and expanding payment options into more geographies, eBay believes sellers will be able to reach more buyers and improve conversion.
The transition to full payments intermediation will be a multi-year journey. eBay will begin intermediation 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. In 2021, we expect to have transitioned a majority of Marketplace customers to the new payments experience.
Again, you do not need to take any action at this time. As eBay gets closer to the initial phase of its intermediation efforts, we will share more details about this process and next steps for sellers. In the meantime, please read the eBay Inc announcement for further information. For any immediate questions or to share feedback, please email email@example.com.
We’re looking forward to what’s next, and to getting there with you.
As always, thank you for selling on eBay.
VP, B2C Selling
VP, C2C Selling