PayPal second-quarter results shone a spotlight on the accelerated separation progress as its partnership with eBay is due to end by 2021.
The fourth anniversary of PayPal and eBay break up saw the marketplace sending an email to invite sellers to their own managed payments service that set to become mandatory for all traders by 2021. The move also saw eBay setting their own rules on payment-processing fees which will see the marketplace charging sellers a transactional fee per listing from the 1st of October 2019.
eBay are highlighted as “PayPal’s key businesses driver” and PayPal experienced declining volume growth from eBay in Q2 when compared to previous years. eBay marketplaces volume declined 4% on an FX-neutral on the year-on-year (YoY) basis. That’s down from 6% of the marketplaces’ volume growth in Q2 2018. It represented 9% of TPV for the quarter versus 12% a year ago.
The figures highlight the decoupling moving “faster than expected” according to MoffettNathanson analyst Lisa Ellis.
This is interesting, not because eBay represent the lions’ share of PayPal’s business, but because PayPal was built off the back of eBay. As merchants are moved to eBay Payments, it may well be that they are less inclined to use PayPal compared to alternative payment methods on their own website moving forward. It’s this that is the real long term impact on PayPal, not the more immediate loss of eBay TPV.
PayPal are currently in the final stages of partnership with Argentinian business operating online marketplaces in the US. According to PayPal’s chief executive officer Daniel Schulman, the team-up aims to boost the payments provider’s “international scope and scale.”
