PayPal, eBay to stay interdependent for 5 years after split
April 10, 2015
5 years of interdepent each other - It give PYPL enough time to create the new channel of transaction charges in post- ebay period, to fill the gap possible without ebay covering
Initially, eBay didn't want anything to do with PayPal. The online marketplace had its own payment system, called Billpoint, which it developed with Wells Fargo. The home field advantage did little for Billpoint, which dissolved after eBay conceded the need to buy PayPal for $1.5 billion in mid-2002. At the time, eBay transactions made up about 60% of PayPal's gross payment volume.
Even under eBay's umbrella, PayPal saw a need to diversify. Over the next few years, PayPal aggressively pursued the business of off-eBay sellers, using new technology such as mobile payments to woo big brands. By the time eBay spun off PayPal in 2015, the so-called alternative payment provider was a common sight on checkout pages throughout e-commerce.
As PayPal has expanded into other markets and geographies, as well as other services such as PayPal Credit, its reliance on eBay for transaction volume has diminished. According to PayPal’s most recent earnings report, its business with eBay was up 10% in the fourth quarter of 2017, but as a percentage of overall volume it accounted for 13% of payments handled by PayPal, down 16% on the same quarter last year. PayPal categorizes this as “unbranded” payments, since it provides processing without displaying the PayPal brand
On ebay 2014 Annual report :
PayPal net total payment volume (TPV) grew 24% in the fourth quarter with Merchant Services volume up 33% and on-eBay volume up 3%. Revenue grew to $2.2 billion. PayPal gained 4.6 million new active registered accounts in the quarter and 18.9 million for the full year, up 13% to 162 million. Global on-eBay penetration increased to 80.8%. PayPal product innovations and investment to make payments simple and easier resulted in accelerating transaction growth, up 25% in the quarter, representing more than 3.6 billion transactions for the full year
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