eBay shares have opened higher Thursday, as the online market site announced it will not renew PayPal’s contract after a 15-year partnership. Instead, eBay will be able to keep purchases on its site in a deal with Dutch financial services provider, Adyen.
eBay shares opened 13.50% higher at $46.06. PayPal shares, meanwhile sank 9.75% to $77.00.
eBay agrees new payment provider deal
eBay announced the change in a blog post and said the new partnership would work out well for its customers. It will also likely benefit its own business and profits, too.
“eBay intends to further improve its customer experience by intermediating payments on its Marketplace platform,” the market site said.
“eBay has signed an agreement with Adyen, a leading global payments processor, to become its primary payments processing partner. PayPal, a long-time eBay partner, will be a payments option at checkout for eBay buyers,” the business added.
eBay said that ‘most’ sellers could expect their selling costs to fall with the addition of eBay’s new primary payment partner.
For buyers using eBay’s marketplace platform, the site said its use of Adyen as its main payment processing partner would give them more choice and also provide a “more streamlined experience for consumers.”
New payment processing system in place later this year
eBay said that it would begin replacing PayPal as it’s default payment processing option in some areas of the US, in the second half of 2018. The availability of Adyen payment as the primary option would then expand in 2019.
And, as per eBay’s agreement with PayPal, Adyen will be the dominant payment processing option in the majority of its operating regions by 2021.
eBay added that it will share more relevant information and details on the changes as the time for the new agreement draws closer.
“eBay’s payments initiative is expected to deliver value to customers through an improved shopping experience, enhanced selling tools and streamlined costs,” the eBay blog post read.