EBay drops PayPal as first selection for funds

Posted February 02, 2018

"eBay intends to further improve its customer experience by intermediating payments on its Marketplace platform", the market site said.

The news was revealed after PayPal released its quarterly earnings that beat expectations on Wall Street, but gave bleak forward guidance for the next quarter.

MacRumors reports that eBay recently announced that they will be replacing PayPal as their main payment processor as they phase out their 15-year-long partnership with the company.

The company processed $131 billion in total payments volume for the fourth quarter, showcasing 32% growth. The online marketplace will stop using PayPal as its back-end services provider which means it will soon be more hard to buy products on eBay with your PayPal account. PayPal continued to process payments for eBay and is the preferred payment method for most of the buyers and sellers on the site.

PayPal Holdings, Inc. (PYPL) stock analysis is based on price earnings ratio (P/E) ratio.

Adyen is PayPal's rival and even though eBay had partnered with it for a long time, it has now chose to partner with its rival.

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PayPal Holdings, Inc. (NASDAQ:PYPL) touched its 1-Year High price of $86.32 on 01/31/18 and its 1-Year Low price of $39.02 on 02/02/17. The company said that by bringing much of its payments service into its own operations, it will add $500 million in operating earnings after the deal with PayPal comes to a close.

Several other institutional investors have also bought shares of the company. It hopes to have transitioned most of its Marketplace customers to its new payments system in 2021.

Dan Schulman, chief executive of PayPal sought to allay worries over the changing relationship with eBay, the company´s former parent, describing this as "manageable". The credit services provider reported $0.55 earnings per share for the quarter, topping the Zacks' consensus estimate of $0.52 by $0.03.

Now, eBay is looking to move on and has been seeking new options that would save it and users money.

PayPal's business with eBay is big and still growing: it was up 10% in the fourth quarter of 2017. Perhaps it was just time for both companies to move on and find greener pastures away from each other. The company's payments team is led by Alyssa Cutright, VP of Payments, and Jingming Li, VP of Payments Platform, to oversee the business and product development.