Global Economics

eBay and PayPal Agreement Expires

As expected, the contractual agreement between eBay and PayPal expired this month. eBay (EBAY) will no longer be utilizing PayPal (PYPL) to process payments for its sellers and customers.

PayPal, once owned by eBay, became independent of the online selling platform in 2015. Following the split of the two companies, a five-year agreement was put into place that enabled PayPal to continue acting as a primary payment processor for eBay. However, in 2018, it was announced that the contract between PayPal and eBay would not be renewed upon expiration in 2020. This move to disengage in financial transactions has led to eBay developing their own payment platform.

Forty-two thousand sellers utilized eBay’s new payment platform over this past weekend, with 250,000 more sellers having signed up to use the platform in the future. eBay reports that over $4.7 billion in payments have been processed in the new payments platform.

With the new payment platform, eBay will be able to exert more control over payment processing than previously allowed through the use of PayPal. According to eBay’s CEO Devin Wenig, the new payment platform is also expected to reduce selling costs significantly. eBay also plans to give more options to its sellers through the new payment platform in the hopes that it will produce better conversion rates.

At the time of this article’s writing, eBay trading was down 0.15% to $58.04. PayPal stocks were up 1.18% to $175.965. eBay stockholders are expected to closely watch the company as the payment platform is more widely rolled out and used.


Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Trader Buzz). I have no business relationship with any company whose stock is mentioned in this article.

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