eBay CEO Devin Wenig described the company's forthcoming move to becoming a payments intermediary, saying it would more like a "Big Bang" than like the gradual transition it had made when rolling out its Structured Data Initiative. eBay won't "beg" buyers and sellers to change, he said, and the new way of paying for items will not be optional.
The CEO was responding to questions during a presentation at the 2018 Goldman Sachs Technology and Internet Conference on Tuesday.
eBay had announced 2 weeks ago
that after its Operating Agreement with PayPal expires, it would become a payments intermediary. Wenig told Goldman Sachs conference attendees that eBay would announce a date within 12 months of the end of the Operating Agreement (July 2020), "and beyond that date, to transact on eBay, you will need to have new Terms and Conditions in your eBay account and those will include payments. It will be the only way you can transact on eBay."
"It's not going to be optional. We're not going to hold peoples' hands and beg them to move over. We're basically going to say your eBay account is now your full end-to-end eBay account for all your activities including payments. And that's the way it works on every other marketplace."
He acknowledged it would be a significant change for eBay's community, and it would be a significant change for eBay economics as it had already announced. At "steady state," which is when customers have migrated, "it'll be an additional $2 billion of revenue and $500 million of operating income" for eBay, Wenig said. "That's quite a significant change."
Wenig was asked what the reaction to the announcement had been from users. He said it has been "really positive," since buyers will still be able to use PayPal to pay. "Buyers are going to get more choice," he said, as eBay will be able to offer them a lot more choice, including local options. He used the example of Apple Pay in the US. There are a lot of local payment options not currently offered across the 190 countries where eBay operates, he said.
As of sellers, "if we can unify their account; give them one piece of information that links payments to their transaction history; and lower their costs - that's a home run."
So far so good, Wenig said, adding - "Obviously the devil will be in the execution. but I think everybody understands what we're trying to do."
Update 2/13/18: eBay executive Bob Kupens reiterated today that eBay would begin intermediating payments in 2018 "as part of a multi-year journey in streamlining our end-to-end experience." That means some of you may start to see some changes this summer, but beyond limited testing (no more than 5% this year and 10% next hear), the big event won't occur before 2020 due to eBay's contract with PayPal.