eBay won’t be a partner with PayPal anymore

[Appl]

eBay falls on PayPal report
There were several catalysts from PayPal's earnings release that conspired to take down eBay. The biggest contributor was a study commissioned by PayPal that revealed that customers were 54% more willing to complete an online transaction if PayPal was offered at checkout. The survey also showed that 59% of PayPal users have abandoned a transaction if PayPal wasn't listed as a payment option.

Those who have followed the two companies will recall that eBay announced earlier this year it would begin intermediating its own payments, in partnership with European payments processor Adyen, and gradually phasing out PayPal as the processor of record. eBay said at the time the move would lower costs and provide greater control for its merchants. This move away from PayPal may be costing eBay valuable sales -- at a time when it needs them most.

Another part of PayPal's report that spooked eBay investors was the revelation that eBay payment volumes grew just 3% year over year on a currency-neutral basis. Scott Devitt, an analyst with Stifel, pointed out that this figure is significantly lower than the 6% growth just last quarter, and far below the 7.2% growth his company was expecting.

Because PayPal still processes an estimated 75% of eBay's payment transactions, its financial report provides early insight into eBay's soon-to-be-released results. Devitt noted that eBay's actual performance over the three previous quarters has been within 1% of the numbers reported by PayPal, signaling that this will likely be another quarter of tepid growth for eBay.

[nickopedia]

"The survey also showed that 59% of PayPal users have abandoned a transaction if PayPal wasn't listed as a payment option."

That right there pretty much sums it up.

I avoid sellers on eBay who don't take PayPal. In fact, I would rather pay another seller more money so long as I can pay using what I'm used to using.

Customers behavior won't change that easily.

[bjammin]

Hopefully this will make eBay want to reconsider before trying to eliminate PayPal. After all, the sole purpose of any business is to stay alive. And this requires income. I would also assume that eBay has a board and investors that are also there to for a pay out. Most of them I would assume are there for ONLY the payout.

[nickopedia]

Originally Posted by bjammin

Hopefully this will make eBay want to reconsider before trying to eliminate PayPal. After all, the sole purpose of any business is to stay alive. And this requires income. I would also assume that eBay has a board and investors that are also there to for a pay out. Most of them I would assume are there for ONLY the payout.

I think eBay's plan is to be a lot like Amazon.

Customers who shop on eBay are used to a certain marketplace experience. That "experience" includes the use of PayPal. if that ecosystem is interfered with, it's unlikely going to turn out positive. It's a very risky business decision to cut PayPal off entirely after the payments transition in 2022.

You're right about the board and investors. They are larely out of touch with the business operations and just want to be paid. If the money stops, or isn't as expected, there will be trouble.

[bjammin]

Let's pray for trouble then

[Play]

Originally Posted by nickopedia

[B]"I avoid sellers on eBay who don't take PayPal. In fact, I would rather pay another seller more money so long as I can pay using what I'm used to using.

Customers behavior won't change that easily.

I think so too.

Even though they aim to phase things out over a few years, I just dont think its enough given PayPal has been the go to payment method on eBay for decades.

Either the transition needs to be so seamless that buyers dont notice the difference, OR they'll end up offering buyers the option to use Adyen or PayPal (at least for a few more years).

[nickopedia]

From the Motley Fool - Oct. 25, 2018:
https://www.fool.com/amp/investing/2...the-piper.aspx

Troubling developments:

PayPal president and CEO Dan Schulman said, "If you look at the seller feedback on the eBay seller forum and look at what those sellers are saying, those that have moved over to intermediated payments, you'll see comments from them that their sales have dropped 40% to 60% and they're clamoring to come back to PayPal."

[Play]

Originally Posted by nickopedia

From the Motley Fool - Oct. 25, 2018:
https://www.fool.com/amp/investing/2...the-piper.aspx

Troubling developments:

PayPal president and CEO Dan Schulman said, "If you look at the seller feedback on the eBay seller forum and look at what those sellers are saying, those that have moved over to intermediated payments, you'll see comments from them that their sales have dropped 40% to 60% and they're clamoring to come back to PayPal."

I think eBay will do the smart thing (hopefully) and keep a hold of PayPal. After this report, they'd come to a swift end if they chose to continue with ending their relationship with PayPal completely.