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(Pocket-lint) - eBay is slowly shifting away from its old buddy PayPal. Starting later in 2018 PayPal will no longer be the default payment option for your eBay purchases or sales, although it will take a few years for eBay to fully transition to its replacement payment service.

The move doesn’t mean a complete goodbye to PayPal on eBay. It will remain a payment option until at least 2023, so you’ll still be able to use it if you so wish.

So what will eBay do instead? It’s working with Amsterdam-based Adyen to develop its own payment system; Adyen already works with Uber and Spotify to process their payments. It will all happen in the background so you won’t need to sign in separately as you have to do with PayPal now.


As usual, cash is the reason for the change. eBay will be able to pocket the fees for payment processing if it does this itself – the money that PayPal currently makes from each eBay transaction. eBay says this will be better for sellers as “most sellers can expect their costs of payments processing to be reduced”.

As eBay will be able to take control of the whole checkout process, things should also become more streamlined for buyers and sellers, leading to fewer aborted transactions.

Despite being a much smaller company than PayPal, Adyen has experience of dealing with 150 currencies and over 200 payment methods. Rumours suggest that eBay may take a stake in or buy Adyen in due course.

You may be thinking, “aren’t PayPal and eBay the same company?” and you’re right in a sense in that they were until 2015 when they split. The aim then was to help PayPal stay ahead of competitors in the increasingly competitive online payment space. PayPal was originally bought by eBay in 2003 and soon after became the platform’s default payment option. When the companies split, it was known that around a third of PayPal’s revenue came from eBay.

PayPal’s existing payment processing deal expires in 2020, but as we mentioned it will remain a payment option on the marketplace until July 2023 due to a new deal announced by the two companies today.

Now why not check out What is Apple Pay Cash, how does it work, and when can you use it?

Writing by Dan Grabham.
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