Ebay and Paypal get divorced - any impact for users?

By : Administrator
Published 1st October 2014

So if you haven't heard, the ebay board has decided to separate it's ebay and Paypal business into separate companies after pressure from investors, particularly a major shareholder called Carl Icahn. An interesting development when the ebay CEO said back in January this wouldn't happen!

Looking at different news reports, the decision seems to have been prompted by a strategic review, with competition increasing for Paypal with the release of Apples new mobile payment system, Apple Pay. More interestingly, the current ebay CEO is stepping down and won't be holding an executive position at ebay or Paypal. Maybe a boardroom revolt?

But what about users?

I'm assuming once Paypal formally separates in 2015 and is a publicly traded company, it will cease to have any formal links with ebay, although no doubt there will be some kind of legacy contract to be the payment provider of choice for ebay. But in theory they could change the charging structure for ebay.

For Paypal users who don't use ebay, then I doubt you will see any change, but it could be good news as Paypal will be free to compete and develop as it see fit. Maybe competition from other providers will see lower Paypal charges?

So Paypal users will notice little change at least in the short term, but it does beg the question about ebay. Has the auction giant passed it's peak? It bought Paypal for $1.5bn in 2002 as a bolt on payment processor, but Paypal has just grown and grown.

Once free of ebay, it will be able to explore fresh markets and grow, with some pundits predicting it will dwarf ebay in years to come.

So do we have any regular ebayers? What do you think?

Anyone got any thoughts on the marriage break up?


Steve Richardson
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