Divorce on tap for eBay, PayPal

PayPal won't be its payments processor after 2020

Dreamstime

EBay said Wednesday PayPal will no longer be its payments processor.
Dreamstime EBay said Wednesday PayPal will no longer be its payments processor.

SAN JOSE, Calif. — EBay and PayPal are taking another step toward divorce. And as is the case in many such separations, one side is the winner and the other is left wondering just how things got to this point.

EBay said Wednesday that PayPal no longer will be its payments processor after the agreement between the two companies ends in 2020. EBay has signed a new, long-term deal with Dutch payments-services company Adyen, which will start handling a small amount of eBay’s payment processing later this year.

Adyen’s name may not be well-known in the United States, but the company does count Uber, Netflix and Spotify among the companies that use its technology for processing customer payments.

Unlike PayPal, which in addition to providing payment services has a button on eBay sites and elsewhere so customers can use it to pay for purchases, Adyen focuses exclusively on the services that businesses use on the back end of their systems for payment processing.

PayPal won’t disappear completely from eBay in two years, however. The companies said PayPal will remain as a payment option on eBay’s Marketplace sites until 2023.

EBay and PayPal have had close ties since 2003, when eBay acquired PayPal. In 2015, eBay spun out PayPal as an independent company.

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