Home
Internet
Internet News
eBay to Stop Using PayPal as Payment Processor, Switch to Dutch Company Adyen

eBay to Stop Using PayPal as Payment Processor, Switch to Dutch Company Adyen

By Reuters | Updated: 1 February 2018 11:46 IST

PayPal Holding s's shares fell as much as 12 percent in after-hours trading on Wednesday after former parent company eBay said it had signed up a new primary payment processor.

EBay said it will start processing payments globally using Dutch payments company Adyen, allowing its users to remain on the eBay website when checking out.

PayPal said eBay shoppers will still be able to select PayPal as a form of payment until at least July 2023. The news from eBay came as PayPal reported quarterly earnings that beat Wall Street estimates but gave a disappointing outlook for the first quarter. PayPal shares initially fell 5 percent after the release of the quarterly results.

The chief executive officer of PayPal, Dan Schulman, said on a call with analysts that the changing relationship with eBay was very "manageable" and that it was in line with PayPal's new strategy.

EBay accounts for roughly 13 percent of total payments processed by PayPal.

PayPal was spun out of eBay in 2015 and has since been working to transform itself from a company that mainly processed payments for its parent company to one that processes payments for other large companies and their customers, as well as for individuals paying family and friends.

PayPal's new strategic direction has led to partnerships with numerous large financial institutions and big technology companies including Alphabet's Google, Apple, Mastercard, Visa and JPMorgan Chase.

San Jose, California-based PayPal forecast first-quarter adjusted earnings of 52 cents to 54 cents per share. Analysts on average were expecting 54 cents, according to Thomson Reuters.

PayPal expects revenue for the full year of $15 billion (roughly Rs. 95,400 crores) to $15.25 billion (roughly Rs. 97,000 crores). Analysts had been forecasting $15.16 billion (roughly Rs. 96,400 crores), according to Thomson Reuters.

PayPal's focus on partnerships and acquisitions have been paying off with growth in payment volumes and users.

The company processed $131 billion (roughly Rs. 8.33 lakh crores) in payments in the fourth quarter, up 32 percent from a year earlier, and added 8.7 million active customers.

PayPal has been looking to freshen its brand and deepen usage with younger customers through its peer-to-peer payments app Venmo. Venmo processed around $35 billion (roughly Rs. 2.22 lakh crores) in payments in 2017, up 97 percent.

PayPal's net income rose to $620 million (roughly Rs. 3,900 crores), or 50 cents per share, in the quarter ended December 31, from $390 million (roughly Rs. 2,500 crores), or 32 cents per share, a year earlier.

Excluding one-time items, the company earned 55 cents per share, beating the average analyst estimate of 52 cents, according to Thomson Reuters.

Net revenue climbed to $3.74 billion (roughly Rs. 23,800 crores) from $2.98 billion (roughly Rs. 19,000 crores).

The results included a net tax expense of $180 million (roughly Rs. 1,100 crores) connected to the recent US tax reform, the company said.

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.