On Thursday, online marketplace eBay announced it has signed an agreement with Dutch fintech Adyen to become its primary payments processing partner. The company revealed it intends to further improve its customer experience by intermediating payments on its Marketplace platform. By doing this, it will manage the payments flow, simplifying the end-to-end experience for buyers and sellers.
“As a leading global commerce company, eBay believes that payments intermediation is strategically important to improve the buyer and seller experience on its platform and will enable the company to further innovate on behalf of its customers. In a rapidly changing and competitive ecommerce landscape, shoppers expect to be able to both shop and checkout on the site on which they transact. As eBay intermediates payments, shoppers will be able to complete their purchases within eBay. As a global marketplace that operates in over 190 markets, eBay also must continue to provide localized payment options for buyers and sellers that are tailored to their unique needs.”
Benefits of the new agreement are the following:
- Lower Costs and More Control of Their Economics: Most sellers can expect their costs of payments processing to be reduced after they transition to eBay’s intermediated payments model, and benefit from a simplified pricing structure and more predictable access to their funds.
- A Central Place 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.
- Greater Buyer Reach and Improved Conversion: By offering buyers more choice in how they pay and expanding payment options into more geographies, eBay believes sellers will be able to reach more buyers and improve conversion.
- More Payment Options at Checkout: eBay is focused on providing consumers greater choice in payment options at checkout.
- An Integrated Checkout Experience: eBay will manage the entire checkout experience.
eBay also stated that PayPal, one of the marketplace’s long-time partners, will now be a payments option at checkout for the website’s buyers. eBay and PayPal have also aligned on terms to offer PayPal as a way to pay at checkout on the eBay intermediated model until July 2023. PayPal will remain an important partner to eBay.
eBay added will begin payments intermediation on the marketplace on a small scale in North America starting in the second half of 2018, expanding in 2019 under the terms of the Operating Agreement with PayPal. In 2021, eBay expects to have transitioned a majority of its marketplace customers to its new payments experience.