May 30, 2017

What Will the PayPal Spinoff From eBay Mean to Businesses?


You may have heard about the planned PayPal spinoff from eBay. ebay recently announced the plan to split the companies into separate publicly-traded companies next year.

But what exactly does this mean for the millions of businesses that rely upon eBay or PayPal or both to operate their businesses? Well, theoretically, the change should be a benefit, especially, for PayPal users.

In an official post on the eBay Inc. blog, President and CEO John Donahoe exlained:

“eBay and PayPal will be sharper and stronger, and more focused and competitive as leading, standalone companies in their respective markets. As independent companies, eBay and PayPal will enjoy added flexibility to pursue new market and partnership opportunities.”

How the Spinoff Will Benefit PayPal Users

The move to split eBay and PayPal is designed to make each company more competitive in their respective industries, according to the eBay announcement.

For PayPal specifically, the mobile payments market has gotten extremely competitive with more digital payment options for small businesses than ever before. This includes competition from companies like Square, Dwolla, and now even Apple, with Apple Pay.

So, it’s easy to see how PayPal as a stand alone company might be able to aggressively develop new digital payment features without worrying about competing priorities from eBay’s overall business. In addition, for those businesses using both services, there’s no reason to believe anything will change.

After the split is completed, the two companies will still maintain a working relationship. In the eBay announcement, it is said the companies will stay at “arm’s length” of each other.

eBay purchased PayPal in 2002 and the PayPal platform is used to conduct many of the transactions on the auction site. But the platform is used as a digital payment option by many other businesses too.

When the changes take effect, Devin Wenig will take over as CEO of eBay. He is currently the president of eBay Marketplaces.

Dan Schulman will immediately take over as president at PayPal. He has also been named the CEO-designee of the new PayPal company once it’s separate from eBay, as defined by this development. Schulman was last the president of American Express Enterprise Growth Group.

Image: PayPal Campus from eBay

5 Comments ▼
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Joshua Sophy - Assistant Editor


Joshua Sophy Joshua Sophy is the Assistant Editor for Small Business Trends and the Head of Content Partnerships. A journalist with 17 years of experience in traditional and online media, Joshua got his start in the newspaper business in Pennsylvania. His experience includes being a beat reporter covering daily news. He eventually founded his own local newspaper, the Pottsville Free Press, covering his hometown. Joshua supervises the day-to-day operations of Small Business Trends' busy editorial department including the editorial calendar and outgoing assignments.

5 Reactions

  1. Aira Bongco

    I guess i is about time. Both companies have already been known in their respective industries. The least they can do for their customers is to hone their services for their benefit.

  2. I’m neither here nor there about the split. As long as it has no negative effects on customers in either camp, then I’m good.

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