For fifteen years, PayPal has been the premier partner for eBay as its payment getaway but the reign is coming to an end.
eBay decided that by 2020 to jettison PayPal as its primary payment processing getaway in favor of a 12 year-old startup coming right from Amsterdam, Adyen.
But fear not!
By 2020, PayPal will remain a payment option for shoppers on eBay, but it won’t be prominently featured ahead of debit and credit card options as it is today. PayPal will cease to process card payments for eBay at that time.
PayPal’s stock dropped as much as 12 percent on the news in after-market trading.
At eBay, the move is being billed as a way to take more control over the critical checkout experience as other giant online shopping destinations like Amazon and Alibaba have, while giving more payment options to eBay shoppers. Adyen supports more than 200 payment methods across the world, eBay said in a blog post announcing the news.
But it is a great opportunity to seize for Adyen for a small company with a revenue of $178 million in 2016 as compered to the 11 billion dollar cash cow generated by PayPal.
PayPal entered agreement with eBay all the way back in 2003§. The two companies split into separate public companies in July of 2015 and signed a five-year operating agreement to maintain a close relationship through mid-2020.