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  (Source: Sell More Online)
Paypal looks to grow, expand and perhaps distance itself from its traditional partner, which has grown stagnant and controversial

PayPal and eBay seemed destined to be best friends forever.  PayPal was built on eBay's success, but it in turn helped the auction giant to be propelled to household name status, even finding itself slipping into the colloquial vocabulary.  In 2002, eBay cemented the relationship, buying PayPal.  However of late, with eBay showing signs of stagnant sales and being embroiled in controversy, this longtime comrade is focusing on its efforts to move into other business markets.

PayPal President Scott Thompson announced at RBC Capital Markets conference Wednesday that by the end of the year, less than half PayPal's revenue will come from eBay buyers and sellers.  Rather, the majority will now come from PayPal's Merchant Services.

In addition to providing payment services to individuals, PayPal offers Merchant Services, which provides a payment interface for corporate websites.  Starbucks, Delta Airlines, and American Outfitters all use the service thanks to its simplicity and experience.

Despite being an eBay subsidiary, PayPal is finding its best interests for both itself and eBay may be focusing its attention elsewhere.  "We've had organic growth with eBay, but as merchants migrated off the eBay platform (by building their own sites), they've brought us with them," explained Thompson.

The new growth has helped PayPal avoid slipping amid newfound competition from Google's Checkout and newcomer Amazon.com's new payment service.  Amazon.com, a perennial eBay rival, recently introduced a competitive service titled Checkout by Amazon. 

However, by all signs, PayPal is still king.  It owns 33 percent of the payment traffic on the top 100 e-commerce sites in the United States.  In Q2 2008, it reported revenue of $602M USD, a 33 percent rise from a year prior.  Similarly, payment volume was up to $14B USD, or 35 percent growth. 

PayPal is not just looking to move away from eBay, it’s also looking to branch out in the booming overseas market as well, raking in new business in China and India, among others.  Mr. Thompson stated, "By the back half of 2009, the international business will exceed our North American business."

A key developing sector for PayPal is mobile payments.  In the U.S., this service has failed to catch on, despite heavy investment.  As a result, Mr. Thompson has decided to steer PayPal's mobile efforts primarily into the international markets, especially countries where robust electronic infrastructures don't exist.  He says China and Russia are prime examples of promising markets.

He added optimistically, "In Russia, lots of people stand in line to pay their bills every month. That's a perfect use case for PayPal."

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Alternative payments on Ebay?
By dreddly on 8/7/2008 2:15:41 PM , Rating: 2
Maybe this will make them comfortable enough to allow google or amazon as payment on ebay. I know one of the primary reasons I am switching to craigslist is the paypal hassle (double charging) on ebay, but I still don't mind using paypal on third party sites.




RE: Alternative payments on Ebay?
By Moishe on 8/7/2008 3:29:52 PM , Rating: 2
Since Ebay owns paypal, there is no reason why they would offer the same advantages to their competitors.

I personally think it's easy to get upset at Paypal because we're so spoiled. Most of us don't remember the days when you had to have a merchant account, pay monthly fees, and go through a bunch of paperwork just to take a credit card. It was simply uneconomical unless you processed a large amount of sales. Paypal completely removes all of that hassle and *YES* they do want their fee. Can't blame them.

I'm not trying to say that Paypal is the grestest, cuz they're not. As a developer, a consumer, and an ebay seller, I use paypal all the time for a lot of things. The fact is Paypal has filled a need that needs to be filled and they've done a great job of doing it.


RE: Alternative payments on Ebay?
By 306maxi on 8/7/2008 3:53:40 PM , Rating: 4
Thing is though they charge a lot for doing not a lot. I've been taking advantage of the shortage of Wii Fits and I've been selling them on Ebay here in the UK and first you get pinged with Ebay fees and then with Paypal fees, it just seems a bit much for not actually doing a lot. Then your money disappears for 5-7 days. These days in the UK you can do a transfer from one bank to another in a matter of hours if both banks allow for it. You just know that your money is getting invested in the meantime and Paypal is making even more money out of you. I know they provide a service and all but it's hardly costing them £8 (~16 USD) to host my listing for one day and then another £3 (~6 USD) for all of the payment stuff.

I'm all for companies making a profit and so on but this is taking the piss. It wouldn't be so bad if Ebay gave a toss about people blatantly selling pirated goods and knockoffs but they simply don't give a crap as long as they get their cut.


RE: Alternative payments on Ebay?
By xphile on 8/7/2008 9:14:14 PM , Rating: 2
And you think you have it bad - at least in the UK they recognise you exist as a viable main currency entity - some dont even get that privilege. All my fees on Ebay can either be in Australian Dollars or US Dollars, even though I'm in New Zealand. So every time i even pay their fees I get hit with currency exchange markups as well!

And since most of my sales are in Europe or North America, I pay Ebay 2 or 3 fees, Paypal their fee for the money to go into the account - oh yes and they swiftly take another sweet bite on the way out too - since naturally you'll be wanting those US dollars, pounds or Euros converted into NZ dollars to get into your bank account wont you sir.

And their conversion rates are always without fail higher than the exchange rate at any given time by a handy markup.

And most of you all probably dont know about the utter fiasco that has been attempted by the "Dastardly Duopoly" on Ebay Australia. It was a test run at their strategy for the entire world no doubt. First make Paypal payments compulsory - yes you HAD to offer Paypal as ONE of the payment options - but we will let you offer others too - well for now.

Because step two was - (weeee) You HAVE TO USE PAYPAL - AND NOTHING ELSE (well more or less unless you offer your own credit card service or the good is being picked up).

Yep they care about their users alright - and the words F$%# and ALL are in the same sentence every time.

The Australian Commerce Commission has stomped on them - final ruling to still be given - but if this isn't anti competitive then god knows what would be.
Read more about the Australia situation here:

http://www.tamebay.com/2008/04/its-official-ebay-a...

http://www.australianit.news.com.au/story/0,24897,...

http://apcmag.com/ebay_fails_in_bid_to_force_users...


By Alexstarfire on 8/7/2008 9:33:30 PM , Rating: 2
I'm kinda surprised they didn't do that a long time ago... it seemed to be a nature step in the wrong direction... so why wouldn't they do it?


RE: Alternative payments on Ebay?
By 306maxi on 8/8/2008 12:00:18 PM , Rating: 2
Good to see the ACCC are getting involed. I'm originally Australian it bites that Paypal are deliberately and needlessly bending you over and spanking you. The ACCC don't usually suffer monopolistic bar studs like that though.


By Alexstarfire on 8/7/2008 9:30:08 PM , Rating: 2
Exactly. It also makes absolutely no sense on why they charge you fees based on the starting price and the end price. it's not like it's going to cost them more if the item costs more. IF ANYTHING they should charged based on the amount of bids and/or on how many views it gets. That at least has some basis behind it. Obviously the more views your auction has the more bandwidth you are taking up. Though... this would generally mean that auctions with a low starting price would cost more since more people look at the lower priced ones.

They should make all their fees be a flat rate and let it be done.


RE: Alternative payments on Ebay?
By mofo3k on 8/8/2008 9:31:02 AM , Rating: 2
So your complaining about paypal ripping people off while at the same time you're doing the same thing to potential Wii Fit buyers. I hope you see the irony in that. Paypal taking your money to provide a service is actually more legit than you adding to the Fit shortages.


By Icelight on 8/8/2008 12:07:08 PM , Rating: 2
You don't choose what amount of money you want to give to Ebay or Paypal, you just have to bend over and take it if you want to sell on their site.

Buying something at an inflated price is entirely the buyer's choice. They can set their max bid and give it a try to see if they win.

You can't query Ebay/Paypal and say, "I'll give you a maximum of 10 cents for hosting my auction and handling payments for me. That's what it's worth to me" and wait for them to get back to you. You either drop your drawers or go elsewhere.


RE: Alternative payments on Ebay?
By Entropy42 on 8/8/2008 9:46:43 AM , Rating: 2
quote:
Thing is though they charge a lot for doing not a lot. I've been taking advantage of the shortage of Wii Fits and I've been selling them on Ebay here in the UK


Sounds like you also are charging a lot for doing even less than they do.


RE: Alternative payments on Ebay?
By 306maxi on 8/8/2008 12:55:48 PM , Rating: 2
I'm doing the work of getting stock. I'm not monopolising stock levels, people are free to track down ones for RRP if they can find them. But the thing is Ebay has a monopoly on online Auctioneering and paypal will soon have a monopoly on payment on Ebay. I've had a couple of people who were happy to come back any buy another Wii fit from me rather than waiting goodness knows how long for one on a waiting list with a retailer.


By phxfreddy on 8/8/2008 8:30:05 PM , Rating: 2
Ebay will die because of web 2.0 sites and their stupidity on this issue. They are just too expensive given what they do. ( and they DO NOT protect you ) ... If you disagree read this article and see if you still dissagree.

http://www.amarketplaceofideas.com/ebay-paypal-qui...


PayPal needs a change
By Screwballl on 8/7/2008 2:41:49 PM , Rating: 5
first, require them to follow federal and international laws regarding financial institutions.
second, require FICA insurance.
third, force the process to use direct electronic connections with no inbetween processing time.

With the third one, anyone that has transferred money to or from their bank account has found it generally takes 4-6 business days to get the money to/from either location. Some people say this is normal procedure... anyone that has used RME (Revolution Money Exchange) which is a paypal alternative IS backed by a bank and the money transfer time I found is less than 3 business days.
This means that PayPal does get the money within 24 hours (if RME can do it in 48 hours so can paypal) and then puts it in a investment of some sort for 2-4 days). The last business day they transfer from their investment to your bank/paypal account.




RE: PayPal needs a change
By bridgeman on 8/7/2008 4:28:53 PM , Rating: 2
Transfer times generally depend on the business and the ACH system they use. There are a number of banks/credit unions/brokerages that only take a day, sometimes two, to transfer money via ACH. A few examples are GMAC, Countrywide, and Fidelity.

So, yeah, Paypal is making a little cash on the side while they hold your money. For small amounts, the lost interest is trivial. Once the amount is in the $1,000+ range, it's just foolish to transfer through Paypal.


This is news?
By frobizzle on 8/7/2008 3:30:49 PM , Rating: 2
shrugs

Who cares?




RE: This is news?
By 16nm on 8/7/2008 4:22:50 PM , Rating: 2
quote:
This is news?
What's news is that eBay's business is turning so sucky that it's Paypal's business showing a future.


Dear Ebay
By TMV192 on 8/7/2008 7:01:58 PM , Rating: 2
please add your PayPal to your Half.com
Thanks




Paypal sucks
By PandaBear on 8/8/2008 5:55:05 PM , Rating: 2
Once I agree with an ebay seller to cancel an auction win and offer to pay him $10, paypal refuse to let you pay a fraction of an ebay win, so I have to pay using non-ebay services.

Guess what happened next: using credit card instead of bank account, paypal charge me as cash advance and my bank end up charging me $10 for a $10 transaction. Paypal refuse to refund the cost, and Chase instead did it in good will. I means, come on, they already charge the receiver of money a fraction as fee, why are they so cheap and have to make the whole experience a mess?

If they have competitors, they wouldn't get away with this. Now I make sure I use any possible mean to make them lose my business.

Fvck you Paypal.




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