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PayPal Implies eBay Managed Payments Is Flawed

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PayPal LogoPayPal implied eBay’s launch of managed payments is flawed because it doesn’t include PayPal as a payment option in its initial incarnation. It was no coincidence that two days before its quarterly earnings, PayPal released a study that showed shoppers are more likely to buy when PayPal is included in checkout. eBay is excluding PayPal from managed payments until July 2019.

We noted the gloves were off even before PayPal CEO Dan Schulman said last week that early adopters of eBay managed payments were “clamoring to come back to PayPal.”

The study, released on October 16, showed that 59% of PayPal users have abandoned a transaction because PayPal wasn’t there.

The study also found that when comparing credit cards, debit cards and “all other relevant digital wallets,” PayPal is the most preferred payment method by consumers. At the same time, 59% of people who use PayPal said they have abandoned a transaction because PayPal wasn’t there.

Schulman referenced the study during the question-and-answer period of PayPal’s earnings call with Wall Street analysts on Thursday.

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eBay hasn’t explained why it excluded PayPal from its initial managed payments launch, which is being powered with help from Adyen.

PayPal included a link to the research study, conducted by IPSOS, in this post.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

5 thoughts on “PayPal Implies eBay Managed Payments Is Flawed”

  1. ebay is reaping the harvest of NOT announcing to BUYERS the details of the roll-out.
    In the extreme, it’s like an alcoholic going to the liquor cabinet at 1AM, and it’s empty.
    Now, it’s too late to hire a VP of Human Nature.
    Enjoy those empty carts at Christmas, Wenig…or whoever your replacement is.

  2. Sellers who have a Paypal Working Capital Loan have also been warned that using any other payment system is a violation of the agreement and may result in the loan being terminated and repayment required. Also same for using eBay’s own loan system.

  3. Some biz historian needs to flag this one for the “Turnabout is fair play” archives.

    PayPal was brutalized earlier this year after Wenig’s Adyen engagement announcement (and PayPal’s “divorce”). If I recall correctly, $PYPL cratered back then ~10% just like $EBAY did last week.

    It was shrewd planning for PayPal to commission this study, and for Schulman and Rainey to to offer up the comments they did in the earnings call. Just ****ing awesome sound bites… and more importantly they resonated with both consumer-buyers and merchant-sellers:
    – “59% of PayPal users…abandoned a transaction because PayPal wasn’t a checkout option”
    – “eBay sellers who’ve moved to intermediated payments are “clamoring to come back to PayPal.”

    EcommerceBytes.com gets more credit than only the early October reporting.

    In early April the first signs of the increasingly fractious eBay-PayPal relationship were beginning to publicly emerge as readers began reporting PayPal’s removal of eBay buyer email addresses. PayPal said it was an eBay policy, and some began speculating how bad the damage was behind the public facade. (https://www.ecommercebytes.com/C/blog/blog.pl?/pl/2018/4/1524185319.html).

    Schulman should be applauded, but more surprising is the fact that it took PayPal’s CEO to echo what is essentially common knowledge to result in a market shift. Seller-merchants have been sounding the alarm about eBay’s managed payments PayPal exclusion on Twitter, eBay’s message boards, and EcommerceBytes.com for weeks.

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