|Thu Oct 18 2018 21:24:17|
PayPal Report Shows Troubling Signs for eBay
By: Ina Steiner
PayPal CEO Dan Schulman was surprisingly critical of eBay's managed payments launch during today's third-quarter earnings call with Wall Street analysts, but he said managed payments had nothing to do with the softness in PayPal's eBay business.
PayPal's eBay Marketplaces volume grew only 3% on an FX-neutral basis - that's compared to PayPal's Merchant Services volume growth of 28%. Given that PayPal is the most popular payment method on eBay, that is not a good sign. eBay will report its third-quarter earnings on October 30.
For now, eBay managed payments excludes PayPal; it launched to a small number of sellers one week before the end of the quarter.
Schulman made a point of saying that eBay sellers who moved to managed payments have left comments on eBay seller forums reporting a sales drop of 40 - 60% and were "clamoring to come back to PayPal."
eBay buyers who land on listings from sellers enrolled in managed payments are not able to pay with PayPal - it won't be added until July 2019. eBay calls the rollout of managed payments a multi-year journey and this week said it has already managed more than $20 million in GMV, representing nearly half a billion dollars on an annualized run rate, to date.
eBay-related volume represented 11% of volume on PayPal in the third quarter, down from 13% a year ago and 20% three years ago. eBay and PayPal split in July 2015.