EBay has announced that it plans to stop using PayPal as its back-end services provider.
It said, when their contract expires the online marketplace will switch to a long-term deal with Amsterdam-based company Adyen.
This is to say Adyen, will begin processing all transactions on the site.
However, after the existing eBay-PayPal agreement ends in 2020, PayPal will remain a payment option for shoppers on eBay, but it won’t be prominently featured ahead of debit and credit card options as it is today.
According to eBay, PayPal will cease to process their card payments at that time.
Ebay says, its interest here is in controlling more elements of the checkout process in order to make the user’s experience more hassle-free like Amazon.
“We believe that we can offer a more seamless experience while giving buyers and sellers more choice for payment and payout options,” eBay CEO Devin Wenig said.
PayPal has been eBay’s main payments provider since 2003, in mid-2014, around the time PayPal was beginning to eclipse eBay in value, the latter company provided more than 30 percent of PayPal’s profits and 50 percent of its revenue.
According to CNBC , stock in PayPal fell 10 percent on Wednesday, though the Journal noted its executives are trying to paint eBay as simply not a profitable enough focus.
EBay executives added that PayPal’s eBay volume was growing slower than its non-eBay volume.
They said that trend would get a boost from recently-signed agreements for PayPal to be a payment option at large retailers including Walt Disney Co. , Dillard’s Inc. and QVC Inc. for the first time.