PayPal and eBay Inc (NASDAQ:EBAY) parted their ways some time ago due to differences in the payment terms. The separation will be active from the second half of this year. Now eBay has confirmed that PayPal could work with the leading e-commerce companies like Amazon.com, Inc. (NASDAQ:AMZN) and Alibaba Group Holding Ltd (NYSE:BABA).
Insights On The Matter:
eBay recently announced that PayPal is free to work with other retail marketplaces after the split. The leading e-commerce company also announced that it would appoint some other payment partner in the near future to facilitate hassle-free payments. PayPal’s intentions to work with other retail giants were disclosed by a financial filing that also featured that eBay wouldn’t work with PayPal in the future.
PayPal and eBay have signed an operating agreement according to which, for the next five years, following by one year’s transition period, PayPal will not be allowed to create an online marketplace for the customers. Just like PayPal, eBay will not be allowed to launch its payment system for the same duration. The announcement is a clear cup evidence of the level of independence that both eBay and PayPal have enjoyed over these years.
PayPal and eBay have been working together since 2002, and this separation was never on the cards until the very last moment. Recently, Dan Schulman, CEO, PayPal stated during a public event that PayPal would always try to be an honest, neutral third party to all of its online retailing and commerce clients. However, he had mentioned that eBay would remain PayPal’s largest client forever, which is not going to happen after this split.
The split between these two companies has also forced some changed in eBay Board. As per the report, John Donahoe, CEO and Board Member, eBay will vacate his seat and join PayPal’s Board. It will be good to see who eBay’s new payment partner becomes after this split.