eBay Splits Further from PayPal, Signs Deal with Adyen

eBay announced they have renegotiated their deal with PayPal and extended their relationship to 2023. The original agreement after the eBay/PayPal split was scheduled to end in 2020.

However, as part of the new deal with PayPal, eBay no longer is required to use PayPal as their exclusive payment processor.

The company announced they reached a new long-term deal with global payment processing firm Adyen to offer payment processing of purchases on eBay. PayPal’s payment processing service will still be an option on eBay but will become an off-site transaction.

“eBay intends to further improve the customer experience by intermediating payments on the Marketplace platform. In doing so, eBay will manage the payments flow, simplifying the end-to-end experience for both buyers and sellers. We have signed an agreement with Adyen, a leading global payments processor, to become our primary payments processing partner. PayPal, a long-time eBay partner, will be a payments option at checkout for eBay buyers.”

eBay Statement

In the second half of 2018, North American buyers will see an option to pick either eBay on-site payment processing or PayPal off-site processing.

Following the terms of the original operating agreement with PayPal, eBay will expand the new payment option in 2019 and expects that by 2021 Adyen will process most marketplace transactions globally.

Adyen is a Dutch based back office payment processor. The company is not starting a digital wallet system, and the experience on eBay is anticipated to be more like a typical eCommerce checkout.

Payment, billing, and shipping details will be managed by eBay, and Adyen will handle the actual payment processing. eBay also claims sellers should expect a simplified pricing structure and lower payment processing costs.

“Payments intermediation will bring significant benefits for eBay sellers. All sellers can expect a simplified pricing structure and more predictable access to funds, and most can expect their costs of payments processing to be reduced after they transition to eBay’s intermediated payments model. We’re also working on ways to provide sellers a central place to track and manage their business, inclusive of payments information.”

eBay Statement

It is also assumed that eBay will receive a percentage of the payments processed by Adyen, adding to its revenue stream.

For Adyen, this represents a considerable impact on revenues. For comparison, in 2016 Adyen had revenues of $178 million while PayPal revenues topped $11 billion.

Some analysts believe eBay may take a stake in Adyen or entirely purchase the company sometime later. eBay had no comment on this speculation.

Spring Seller Update Should be Interesting

This announcement comes about three weeks before the typical time frame when eBay announced changes for its sellers in the annual Spring Seller Update.

For more extensive policy or operational changes, eBay typically provides sellers about 4 to 6 months of lead time. This also helps third-party marketplace solutions to adjust to new API hooks.

Assuming the company wants this integration fully operational for the 2018 holiday season, it is reasonable to expect the Spring Seller Update will provide more details on the new payment processing option and how it may impact sellers.

However, the company stated: “Sellers do not need to take any action at this time. The transition to full payments intermediation will be a multi-year journey.”

Currently, most seller protection policies by eBay are the same as offered by PayPal. With a change in processors, this could change. There could also be changes on how disputes are handled and a change in threshold for obtaining signatures on deliveries.



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  1. Mark Lockwood says:

    So, I was one of the first Paypal users. We were not charged anything at the time, that probably ended in 2001 or 2002. This is a shock, beating Paypal out after owning it then selling it. This step is just another one towards becoming Amazon or beating Amazon at its own game. I don’t like it but I am not in control oh ya neither are anyone selling on Ebay. Just step in line or quit selling. Ebay has gotten out of line as the Chinese are taking over stating the item is in the US when in fact it is still in china or Hong Kong. There is no one to complain to!

    1. I must admit that I expected something like this to happen. Personally, I always thought the whole eBay/PayPal split was more about creating institutional shareholder value than what is best for eBay’s core business.

      Thank you for your comment

  2. Soon to be former eBay user says:

    If eBay thinks I’m going to trust them with my bank account and debit/credit card info, they’ve got another thing coming. The whole point of using PayPal is to minimize exposure to a single processing point. eBay can jump in a lake.

    1. Adyen currently is an independent company so eBay wouldn’t be getting involved with the payment side, which eBay Inc could have done years ago when they owned PayPal.

      Time will tell whether eBay moves to acquire Adyen or whether they remain independent.

      Also “Jump in a lake” may now be my new favourite phrase 😀

  3. Personally I don’t think this change is going to benefit sellers or buyers either. I think it is to benefit eBay as almost all their updates do.

    1. I guess time will tell as we find out more about Adyen. Wouldn’t surprise me if we saw lower fees to begin with to increase adoption.

      The truth is PayPal will still be an option until 2023 so any adoption to the new payment service is likely to be slow, so don’t think it’s anything to be overly concerned about right away.

      Who knows, it could be a great move?

    2. I agree with Glenda. This move will be to eBay’s advantage.
      My advice! Sellers be careful, they always pick on the seller!
      Someone will be paying!

  4. Our company purchased frequently from eBay, and all of our supplier accept PayPal, PayPal it is a reliable system to make transactions internationally, also we keep all our transactions in one place, which is convenient for us for our taxes, our bookkeeping software sync automatically with PayPal so perfect and we can track all our transactions, Remove PayPal is very bad news for us, we will have to change all our bookkeeping software which currently work fantastic

    thank you

    Best regards

    President & General Manager

    Godaca, LLC

    1. PayPal will still be an option. What is not known if it will be possible to opt-out of the integrated eBay payment system or if a seller has to offer both. If a seller can opt-out, that should force the completion of the sale on PayPal. Hopefully in about three weeks when the eBay Spring Seller Updates is released, we may know more.

      Thank you for your comment

  5. Schizo-Friend-A-Ya says:

    Not happy about this at all. Paypal has been my only payment method for many years. Do you need a bank account or credit/debit card to open an “Ayden” account? Pretty much every payment processor I’ve tried to use requires some sort of verification, either with a bank account or cell phone or something. Sad to say I don’t have either at the moment. All my money is in Paypal for this reason.

    I’ve had an active Paypal account since 2006 & it’s how I’ve managed to live, basically. eBay is one of the main sites that takes Paypal across the board–really sad to see that changing. It sounds like Paypal will be an option for a few more years but eventually will be gone completely. Hope I’m reading that wrong but it doesn’t sound like it :\

    Stupid corporations.

    1. Yea it’s hard to predict the future, but for the time being PayPal will still be an option and as it states in the article the deal has been extended to 2023.

      This is a good 5 years in to the future, and the speed that eCommerce is moving right now, one thing is for sure…the landscape will be very different in 5 years. Will eBay still be around? Will screens still be used or will everything be on Voice?

      So whilst it is a big change I don’t think there will be a significant change to your situation for a few years yet.

  6. Matthew Ogborne says:

    Remembering the days of billpoint, it was not “good times” at all and Paypal made things a lot and I mean a LOT easier.

    The issue I see eBay has here an extremely tough one & is going to take years. Ni-on every eBay buyer has a PayPal account and without a hefty incentive for both buyers and sellers to move to another provider from one which they trust is not small task.

    If not done tactfully over an extended period of time (say 5 years) the concerning thing is, how many buyers will they alienate in the process?

    Oh and I don’t think a period of 5 years is unreasonable, remember that Amazon’s play has always been “the long game” (think of their first statement to investors). This is one of those things that needs to be played over the long game too.

    What do you think? Has eBay got the stomach for this over +5 years?

    Disclaimer, I’m supposed to be a “silent” founder of eSellerCafe, but had to chip in one this one.

  7. How and when does Ayden make payments available to the sellers? I read that they hold the payments until an item is delivered. That would be horrendous when sellers have to rely on outside partied for delivery. Also many countries do not verify delivery and mailing often takes up to 2 months to arrive if it does at all. I would immediately eliminate all international shipping and only ship to USA. Ebay found out that this as they immediately cancelled selling to other countries. It took only a couple of days to rectify that problem. All I foresee are problems and just having to provide sensitive personal information to a foreign company.

    1. There are not details yet. One word of caution is not to take any other Adyen experiences found on the Internet and assume that is how eBay will use them. Best we can gather at the moment from the public statements and the email they sent out is that Adyen will only be the payment processor, so eBay will set the policies on fund transfers and availability. One reason eBay may chose Adyen is that they have global experience with multiple currencies. This would be very important to eBay sellers to have payments immediately converted to their home currency. PayPal offers both, immediate conversion and holding the payment in the original currency if the seller chooses to have a balance in the buyer’s currency.

      We believe the Spring Seller update for the US and possibly Canada will have more details on this new payment processing method. Other countries would not follow until 2019.

      Thank you for your comment,

  8. I sell on Amazon and Ebay and enjoy immediate use of my sales money from Ebay with the paypal debit card. On Amazon I have a 2-3 day wait to get the money transferred to my bank account. And yes I had to provide Amazon all my banking and personal information. Something I never had to do with Ebay and Paypal over the last 15 years I have been selling on Ebay. I also think that the last few years Ebay has taken more money, perks from Top Rated sellers, and made things harder for sellers and I dread each seller update and looks like this one will be no different.

    1. You voice a concern we have heard many times over the last day. We as well are curious to see if this new arrangement will offer some kind of debit card or if they will require transferring money to a bank account. I do know that most bank transfers from PayPal are about one business day for commercial accounts. Personal accounts can do one in minutes by linking a debit card.

      While I doubt there is a concern about PayPal or eBay going under anytime soon, I do want to note that funds held in PayPal are not protected by the FDIC. At least with a bank, you have that protection and if you are keeping larger sums in PayPal, it may be more secure to transfer them to a bank account. Capital One 360 offers a free business checking account and that could be an option.

      But again, PayPal will still be a payment option for 5 more years and I must admit, I do not believe eBay will stop with PayPal in 2023. Too many people are familiar with PayPal and have a trust factor with them that shutting out PayPal after 2023 would seem a bad business decision.

      eBay may wish to do a lot of their own payment processing by then. But considering how much PayPal continues to grow because it is being integrated into so many other online shopping services, they will still hold a lot of purchasing power. Last year, the company had over $15 billion in cash held by PayPal members (likely larger now and still growing). That is a lot of shopping liquidity to toss aside if eBay decides that they will not accept PayPal after 2023.

      Thank you for your comment,

  9. I just added another post about what was said during the eBay and PayPal earnings calls by executives from both companies about the Adyen deal. There are a few interesting nuggets, but no fundamental changes to this story.


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