Paypal shares fall after eBay announces new partnership with Adyen

By Pouyan Broukhim

PayPal’s shares dropped over 10% on Wednesday after eBay announced that it would be partnering up with rival company Adyen.

Adyen is one of the world’s leading payment processors, operating for a number of big name firms including Uber, Netflix, Etsy, Spotify and Easyjet, with a global reach of over 150 currencies and 200 different payment methods.

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eBay has announced that the Dutch company will become its primary payment processor in the aim of improving its customer service and payments experience on its marketplace.

“As a leading global commerce company, eBay believes that payments intermediation is strategically important to improve the buyer and seller experience on its platform and will enable the company to further innovate on behalf of its customers,” eBay said.

The announcement is a significant loss for PayPal, with as much as 13% of its total business coming through eBay.

Although PayPal will remain on eBay’s site as a payment option until 2023, Adyen will offer an on-site service as opposed to PayPal’s external offerings, in addition to reduced costs for sellers and a simpler pricing structure.

“eBay will begin payments intermediation on the Marketplace platform 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,” eBay continues. “In 2021, eBay expects to have transitioned a majority of its Marketplace customers to its new payments experience.”

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