Ebay and PayPal are breaking up

There’s no doubt that you’ve heard of eBay, or maybe you’ve used it to buy or sell products in the past. eBay was partnered with PayPal as a form of payment on their website for customers to take advantage of. Today, we will discuss the separation between the selling website and the payment format and what it could mean for e-commerce sites moving forward.

     eBay recently announced that customers would no longer use PayPal on their website according to its members’ new terms and conditions. Since PayPal is regarded as a safe option for online transactions, this may cause some hesitation and maybe even force sellers to consider taking their business elsewhere. After 15 years, eBay is abandoning PayPal and transitioning to a new online payment system called Adyen, an Amsterdam-based payments company which we discussed in another article


What Does This Mean?

     PayPal is not a small or unknown payments company, so the breakaway from the system is surprising. While customers will still have the option to use PayPal until sometime in 2023, the online payment system will become a ‘second-rate status’ for e-commerce. eBay cited the reasoning for this termination to enhance user experience since the e-commerce industry has become increasingly competitive. Book Now

     Before, sellers had to pay a fee for using PayPal and the percentage that eBay took out of each transaction. Now, eBay will be collecting the costs that were previously going to PayPal for a lower amount. Sellers will now transfer funds from a sale directly to their accounts and won’t be paying as much in fees. The switch to a new online payment system is supposed to make the checkout process more convenient for customers. However, this idea is still undetermined. 


Is this an E-commerce shift? 

     Since PayPal has been a long-standing partner for eBay for so long, this new policy raises the question of whether or not sellers should be moving their companies toward an independent e-commerce site. If having PayPal has proved successful for creating business for your company and a tool your customers feel comfortable using for online transactions, this shift may prove beneficial to your business. 

    With many sellers questioning how effective eBay is with all of the e-commerce competition on the market, moving away from this site and creating your own online e-commerce space could begin trending after this separation occurs. There’s no way to predict how the notions of greater reach and easier checkouts will pan out before the change. The future of eBay has some interesting times ahead once sellers and buyers can no longer use PayPal as their primary payment method. 


    The association between the e-commerce conglomerate and the third-party online payment system will have many ripple effects in the future. This action may determine the fate of eBay itself. 

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