|Tue May 21 2019 14:53:55|
Why PayPal Is Eager to Be Freed from eBay Shackles
By: Ina Steiner
PayPal Chief Financial Officer John Rainey told Business Insider that eBay is not as relevant as it was 10 years ago and said PayPal is looking forward to July 2020 when it will be released from eBay's shackles, a reference to the 5-year operating agreements entered into between the companies when they split in 2015.
Three weeks ago, PayPal executive Bill Ready revealed that the payments portion of Facebook Marketplace
's new checkout was built on PayPal's marketplace platform. Rainey went further, telling Business Insider that Facebook's potential for PayPal could be far greater than that of eBay.
The opportunity goes beyond Facebook and Instagram - the operating agreement with eBay prohibits PayPal from working with a number of major marketplaces. Last year, PayPal CEO Dan Schulman explained why he chose not to extend
the existing Operating Agreement (OA) with eBay beyond 2020 but entered into an additional agreement that extends into 2023 instead: so that PayPal could officially court other marketplaces in 2020.
That could include Amazon - that's the billion-dollar question. But it wouldn't mean third-party Amazon sellers could offer PayPal directly. In today's world, PayPal is just another payment method on marketplaces like a credit or debit card, with payments going to the marketplaces' own PayPal accounts - similar to the way payments are handled on Etsy now, where it then disburses payments directly into sellers' bank accounts.
Do you think Facebook Marketplace is a threat to eBay? And will Amazon offer buyers the choice to pay for orders with PayPal next year? If so, would Amazon shoppers choose to?