Amazon has figured out a way to allow PayPal balances to be used to fund purchases on its marketplace without actually accepting PayPal as a payment method. And that presents a major challenge for eBay.
PayPal CEO Dan Schulman provided a hint
in January when he told Bloomberg he had been in conversations with Amazon. Now PayPal is offering Amazon gift cards - something that was unthinkable when eBay owned the payments company.
PayPal sent users an email this week with the following subject line: "Amazon.com Gift Cards are here," and an image of Amazon's logo on a gift card.
"Amazon.com gift cards now available on PayPal Digital Gifts," the email stated. "Purchase $25, $50 and $100 cards through the PayPal Digital Gifts Store. Terms Apply."
Not surprisingly, PayPal's Digital Gifts Store on eBay does not
offer the Amazon.com gift cards for sale.
Amazon doesn't have anything to lose and only gains by letting people use PayPal to purchase a gift card that must be used on the Amazon Marketplace. With Amazon getting more deeply into payments with Amazon Pay, it's less clear if this is a good move for PayPal in the long term.
It certainly isn't great news for eBay. Previously its sellers couldn't use their PayPal balances to purchase items on Amazon, but this move
makes it far easier for them to do so.
If you sell on eBay, chances are you will be paid via PayPal. Now you can use the funds in your PayPal account to buy an Amazon gift card (easy), use it directly or apply it to your Amazon account (both easy), and spend, spend, spend - on Amazon.com.