Auction site Ebay is set to end its 15-year relationship with PayPal and replace the payment platform with Adyen as its first choice for buyers and sellers – affecting millions of people who buy and sell goods and services on the website.
Adyen is a relatively small Amsterdam-based company, but provides the payment technology behind big sites such as Spotify, Etsy, Uber and Netflix.
Which? finds out why Ebay has chosen to oust PayPal, and how the switch to Adyen will affect buyers and sellers.
Why are Ebay and PayPal splitting up?
Ebay and PayPal have been synonymous since the online market place acquired the payment platform in 2002, but the two separated in 2015.
Now Ebay intends to initiate the next part of its strategy, which focuses on how users have to make or receive payments.
The firm says it has picked Adyen to simplify the experience of buying and selling and help it innovate further in this space.
What will Adyen offer buyers and sellers?
Ebay says Adyen will offer benefits to both buyers and sellers.
For sellers the main benefits include:
- Cheaper processing and more control – Ebay says most sellers will see costs of payments processing reduce after they move to Adyen. Users will benefit from a simplified pricing structure and better access to their funds.
- Streamlined business management – Adyen will offer a central place for sellers to manage their business. Ebay is working on solutions to provide sellers with information about their Ebay business, inclusive of payments information, in one place – so that sellers can easily track and manage all of their transactions and customer interactions on Ebay.
- Boost sales – by offering buyers more choice in how they pay, and expanding payment options into more geographical areas, Ebay believes sellers will be able to reach more buyers.
For buyers the main benefits are:
- More ways to pay – shopping on Ebay with Adyen will give buyers more choice in payment options at the checkout.
- Better shoping experience – Ebay will manage the entire checkout process, delivering a more streamlined experience for buyers on the site.
Currently, buyers and sellers using PayPal benefit from the payment processor’s protection services, so they can resolve disputes and retrieve their money when things go wrong. Ebay could not confirm what levels of consumer protection there would be with Adyen at this time.
When will Adyen replace PayPal?
The relationship between Ebay and PayPal will officially come to an end by mid-2020.
Ebay will begin to introduce Adyen starting in North America in the second-half of 2018, and by 2021 the majority of its customers will be moved to the new payments platform.
Do you have to do anything?
As Ebay moves to introduce Adyen, sellers may have to provide Ebay with additional payments-related data, and may have to agree to new terms around payments.
Sellers will be required to comply in order to continue selling on Ebay.
Ebay says sellers will need to act within a year of the full roll-out of the technology in July 2021.
You can contact Ebay using firstname.lastname@example.org to ask questions about Ebay’s payment platform changes.
Is this the end of PayPal on Ebay?
PayPal will still be available as a secondary payment choice for buyers and sellers through the transition process.
However, PayPal could cease to be an option from July 2023, when its agreement with Ebay runs out.
Buying and selling on Ebay currently accounts for 13% of PayPal’s volumes, so it could be a big blow for the platform.
That said, PayPal has been forging its own path with technology firms and card schemes to reduce its reliance on its former parent company.