Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Thu Jan 26 2017 22:19:12

Amazon Considers Offering PayPal

By: Ina Steiner

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PayPal CEO Dan Schulman told Bloomberg it has been in conversations with Amazon about letting shoppers pay for Amazon purchases using their PayPal accounts. "We're closing in on 200 million users on our platform right now. At that scale, it's hard for any retailer to think about not accepting PayPal," he said.

UPDATE: Bloomberg has changed its story - it looks like there is nothing new to report, but rather Amazon is one of many companies PayPal has been in talks with, from retailers to mobile carriers to recent deals with Discover, Visa and Mastercard. PayPal provided us with the following statement this evening: "As the digital payments partner of choice for financial institutions, technology companies and retailers of all sizes, we are constantly in discussions to expand the availability of PayPal for our customers worldwide. We have nothing to announce at this time."

Before PayPal's split with eBay in 2015, we raised such a possibility on the EcommerceBytes Blog, where readers had mixed opinions. A number of readers expressed dissatisfaction with eBay, which at the time was headed by John Donahoe - who is now Chairman of the Board of PayPal.

One reader raised an interesting point - the cost to sellers. "For selling on Amazon, they can't allow PayPal to add to the 15% final value fee. PayPal's cut with Amazon sales would have to be by Amazon from the 15% they take. Only then would Amazon sellers offer PayPal. No way Amazon sellers would pay the 15% plus PayPal's 30 cents + 2.9%."

But if Amazon is indeed considering accepting PayPal, it would most likely follow Etsy's Direct Checkout model where buyers pay the marketplace's PayPal account rather than the seller's PayPal account. In other words, Amazon would accept PayPal the same way it accepts credit cards - it's not the sellers' merchant accounts. 

Before eBay acquired it, Amazon offered Bill Me Later (and had invested in the company). Now PayPal owns it, and that could offer Amazon a way to extend credit to shoppers for their purchases - that may be a key reason for Amazon considering PayPal at all.




Comments (18) | Leave Comment | Permalink

Readers Comments

Perminate Link for Amazon Considers Offering PayPal   Amazon Considers Offering PayPal

by: pace306 This user has validated their user name.

Thu Jan 26 23:09:29 2017

The eBay/PayPal relationship is way to close for Amazon to trust PayPal.

Anyone with an IQ above 5, knows that despite the claims by eBay, the truth is eBay IS PayPal. Amazon would NEVER trust PayPal with financial secrets.

In any eBay case, even though you pay the %3 to PayPal, it's eBay that dictates the terms, and don't think Amazon doesn't know it!


Perminate Link for Amazon Considers Offering PayPal   Amazon Considers Offering PayPal

by: puppy This user has validated their user name.

Fri Jan 27 00:39:27 2017

All I know is all my friends are dumping paypal, and recently I also stopped using it. They are struggling with a new AI security algorithm that keeps locking us out of our funds during normal pattern usage. I wish ebay would accept something else! Paypal is awful right now.

Perminate Link for Amazon Considers Offering PayPal   Amazon Considers Offering PayPal

This user has validated their user name. by: eXtinctBay

Fri Jan 27 01:43:44 2017

C'mon. Do you actually think Mr. Bezos would or should give anything to help eBay / PayPal?

PP (and JD) may be talking, but JB probably isn't listening.

Perminate Link for Amazon Considers Offering PayPal   Amazon Considers Offering PayPal

by: FeelingFroggy This user has validated their user name.

Fri Jan 27 05:38:45 2017

Just like in real life. Two's company Three's a crowd.

I would hardly think that Amazon would like to be in a tryst with Ebay when Ebay is joined at the hip with Paypal.

Perminate Link for Amazon Considers Offering PayPal   Amazon Considers Offering PayPal

This user has validated their user name. by: toolguy

Fri Jan 27 09:10:39 2017

Amazon WILL start taking Paypal payments before 2017 is over!

Paypal revenue grew 17% and Amazon knows most on line shoppers PREFER Paypal over any other on line payment.

Amazon's smart enough to know where the money is. . .

Perminate Link for Amazon Considers Offering PayPal   Amazon Considers Offering PayPal

This user has validated their user name. by: toolguy

Fri Jan 27 09:11:51 2017

RUMOR:

Amazon will buy Paypal!

Sounds far fetched?

Not really when you think about it. . .

Perminate Link for Amazon Considers Offering PayPal   Amazon Considers Offering PayPal

This user has validated their user name. by: toolguy

Fri Jan 27 10:33:47 2017

If Amazon buys Paypal they would essentially be getting a piece of every eBay item sold.

I think it would be a brilliant move by Bezos if he bought Paypal.

Perminate Link for Amazon Considers Offering PayPal   Amazon Considers Offering PayPal

This user has validated their user name. by: FEEbay

Fri Jan 27 11:28:05 2017

I see alot of Paypal bashing on here, and just don't get it...I dont want to sound like toolguy, but beyond our losing a volume discount a couple of years ago, we have had ZERO problems with Paypal.  

Perminate Link for Amazon Considers Offering PayPal   Amazon Considers Offering PayPal

This user has validated their user name. by: FEEbay

Fri Jan 27 11:29:18 2017

The Resolution Center is much improved, the reporting is WAY improved, and the support is much improved if and when the rare issue arises.... Gotta give credit where credit is due!

Perminate Link for Amazon Considers Offering PayPal   Amazon Considers Offering PayPal

by: RL15 This user has validated their user name.

Fri Jan 27 11:42:13 2017


sounds like jd is just making noise trying to create investor confidence.

Perminate Link for Amazon Considers Offering PayPal   Amazon Considers Offering PayPal

This user has validated their user name. by: bitbybit

Fri Jan 27 13:48:17 2017

I would be all for Amazon buying Paypal if that meant JD would go bye-bye. Ever since 2008, Donahoe's main focus was on Paypal and never eBay. This is probably why he did everything he could to make eBay into Amazon. Think about it...it is the reason why he despised auctions and threw sellers under the bus. I am sure he is focusing on all the money he would make with Amazon acquiring Paypal on top of the undeserving $30 million golden parachute after the eBay split. I hope his greed chokes him after destroying the livelihoods of countless sellers over the years.

Perminate Link for Amazon Considers Offering PayPal   Amazon Considers Offering PayPal

This user has validated their user name. by: iheartjacksparrow

Fri Jan 27 16:04:47 2017

I can't believe Amazon would consider accepting PayPal even for a nanosecond. Besides the fact that eBay and PayPal are like conjoined twins, they have their own Amazon Payments which I'm sure they're happy with.

Perminate Link for Amazon Considers Offering PayPal   Amazon Considers Offering PayPal

This user has validated their user name. by: Ming the Merciless

Fri Jan 27 17:19:39 2017

Two recent interesting conversations with PayPal and ebafia CSRs.

-- PayPal claims ebafia is now only 13% of their business.

-- ebafia claims John Donahoe made none of the decisions that so negatively affected most of us a few years ago.

I think the PayPal claim is probably reasonably accurate.

The ebafia claim, however, is as bogus aka "alternative fct" as most of the other statements this senior CSR made which were all positively laughable, and I did laugh out lopd at him. More at an appropriate time and subject.

Perminate Link for Amazon Considers Offering PayPal   Amazon Considers Offering PayPal

by: 27tcle This user has validated their user name.

Sat Jan 28 07:27:33 2017

Ebay is a has-been, they've basically killed it. Paypal is essentially an unregulated world banking institution with three sets of standards, one for the average user who makes up to say 125K year, one for that mid-range of about 500K a year, and one for the 1M+ a year corporate entities. With that said, my gut feeling is all hell is going to break loose this year, and when it does kiss your money in paypal and your online business goodbye for the foreseeable future. The overly protectionist policies of the current POTUS is not going to end well.

Perminate Link for Amazon Considers Offering PayPal   Amazon Considers Offering PayPal

by: Barbbie This user has validated their user name.

Sat Jan 28 09:16:36 2017

Paypal has been pretty good for me. However, I do not see Amazon adding it on the seller side, it would have to be a etsy like offering.  I don't see why they can't just get someone else (or start their own) bill me later type credit program.  Bill me later is the only time I look for paypal on a site.
Paypal is very, very glitchy, almost every week someone tells me they cannot complete a purchase on ebay due to paypal and I have experienced it myself a few days ago.  I needed the item so I ended up buying off ebay. I often have to switch browsers to sign into paypal. However, I win far more disputes on paypal than I do on ebay so I prefer if the ebay buyer brings the dispute to them. They may actually cover it or decline it.  And, unlike on Amazon, I like that they cannot do a dispute on both paypal and ebay as they can on Amazon do a chargeback and an A to Z.

Perminate Link for Amazon Considers Offering PayPal   Amazon Considers Offering PayPal

by: I Must be Crazy This user has validated their user name.

Sat Jan 28 11:50:30 2017

It doesn't surprise me that Amazon is considering accepting Paypal. Why wouldn't they? Paypal is a large payment entity with millions of users. That said, I am not sure that Amazon NEEDS to accept Paypal. They seem to be doing well as things stand. Most people in this day and age have credit cards, debit cards and many other payment options. The real convenience with Paypal is the ease of transferring money between individuals. Many small sellers don't need to hassle with setting up a merchant account with their bank. Beyond that I don't see what need Paypal would fill in anyone's world.

Tool- One of the arguments FOR spinning off Paypal is that many large retailers viewed Ebay as a direct competitor and did not wish to support that competition by accepting Paypal. If Amazon were to buy Paypal, I suspect the same logic would apply and the value of Paypal would be diminished. I think Amazon would do better to buy Ebay. Many sellers on Ebay already have a presence on Amazon that well exceeds sales on Ebay. Amazon would then be able to establish an immediate presence in used, vintage and increase sales through their exisiting user base. I believe they would do a far better job of generating traffic and sales than Ebay is doing of late. Further, Ebay has some patents and brands that can be very worthwhile for Amazon such as Stub Hub. Were it not for the revenue guarantee that Ebay has with Paypal as part of their split agreement, it might already have happened.

Perminate Link for Amazon Considers Offering PayPal   Amazon Considers Offering PayPal

This user has validated their user name. by: toolguy

Sat Jan 28 12:05:24 2017

@ 27

"Ebay is a has-been, they've basically killed it."

That has-been makes over $1 BILLION a year in profits!

@ I Must Be Crazy

Let's hope that Amazon does NOT buy eBay, Amazon fees are out of this world compared to eBay's. . .

Perminate Link for Amazon Considers Offering PayPal   Amazon Considers Offering PayPal

by: Sierra This user has validated their user name.

Sun Jan 29 18:41:36 2017

If Amazon starts offering PayPal to shoppers, the fee needs to come out of the 15% I'm already paying them.

I've had PayPal for about 17 years now and have had very few problems, and none that have really bothered me a lot in the long run.



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