eBay Breaks it Off with PayPal - What it means for sellers

E-commerce behemoth eBay is officially abandoning online payments system PayPal after 15 years, opting for a new service that’s expected to deliver benefits to sellers.

eBay has announced that it will stop working with PayPal in 2020 and start transitioning to Adyen, an Amsterdam-based payments company, later this year.

Adyen’s customers include tech industry giants Uber, Netflix, and Spotify.

Adyen primarily provides back-end payments services, like credit card processing, and won’t have a visible presence at the eBay checkout, unlike the “pay with PayPal” button.

eBay users will continue to have the option of using PayPal until 2023, but it will effectively be relegated to “second-class status”.

PayPal has been eBay’s main payments provider since 2003. In the same year, eBay acquired PayPal in a deal valued at $1.5 billion.

eBay and PayPal parted ways in 2015 and become separate public companies, but maintained close business ties.

The announcement that eBay is officially breaking away from PayPal marks the end of one of the tech industry’s “most storied partnerships”.

Why eBay abandoned PayPal

eBay says it’s moving from PayPal to Adyen in order to “improve its customer experience” by intermediating payments on its marketplace.

“In doing so, eBay will manage the payments flow, simplifying the end-to-end experience for buyers and sellers,” the company said in a statement.

It seems that the main motivation for the switch from PayPal to Adyen is enhanced user experience.

eBay says that the ecommerce landscape is becoming increasingly competitive and users expect to be able to both shop and checkout on the site on which they transact.

So rather than completing payments through an external provider like PayPal, eBay wants to keep everything in-house and on-site with Adyen.

Adyen’s service extends to more than 150 currencies and over 200 methods of payments, which provides increased flexibility for eBay users.

What it means for sellers

eBay says that it’s focussed on improving customer experience, but what does the shift to Adyen mean for sellers?

Lower costs for sellers by using Adyen

eBay says that “most sellers” can expect to pay less for payments processing with Adyen compared to PayPal. However, there’s no indication as to how much less.

Currently, eBay sellers pay a transaction fee of 2.9% plus $0.30 USD of the amount being sent to use the PayPal platform.

So it can be expected that most sellers will be paying less than that once eBay makes the transition to Adyen.

eBay says sellers will also benefit from a more simplified pricing structure and more predictable access to funds.

A central place to manage business

It sounds as though eBay is working on an integrated business dashboard for sellers to manage all aspects of their online stores in one place.

In a statement, the company…