And its strengths and sources of competitive advantage are great today because PayPal is part of eBay. The economic foundation provided by eBay gives PayPal the latitude to be more aggressive. And in 2013, eBay was a significant contributor to PayPal’s profit growth.ĮBay also is a significant source of low-cost capital for PayPal, fueling areas such as credit and acquisitions such as Braintree. eBay continues to generate 30 percent of Paypal’s new users – at zero acquisition cost. Why in an era of “big data” would we dramatically reduce the amount of data available to PayPal?Īnd eBay funds PayPal’s growth … eBay is a major contributor to PayPal’s profitability and expansion.įor example, eBay represents approximately one-third of PayPal’s revenue and well over half of its profits. This is evidenced by PayPal’s loss rate of only 31 bps on $180 billion of total payment volume. And anyone who understands risk knows that more data makes you smarter.īy providing closed loop global transaction data, eBay enhances PayPal’s world-class risk capabilities and its ability to underwrite both sides of a transaction. PayPal’s risk management capabilities are a source of competitive advantage. Success on eBay enables PayPal’s success off of eBay.ĮBay data makes PayPal smarter. That’s massive growth – a 45 times increase in a three year period and a leadership position in mobile payments. In 2013, three short years later, PayPal’s mobile payment volume grew to $27 billion both on and off eBay. Let me give the numbers that illustrate this: in 2010 PayPal generated $600 million of mobile payments volume – 80 percent of which came from eBay mobile apps. eBay’s customers were an important source of PayPal’s early mobile payments volume, helping PayPal gain traction quickly and become a mobile payments leader. And PayPal’s success in mobile payments started on eBay. Mobile is the single most important platform shift in the past decade. Mobile is the most recent example of this reinforcing network effect. Simply put, eBay and PayPal together create mutually reinforcing network effects. Over the last decade, the tens of millions of customers PayPal acquired on eBay have helped fuel its growth off of eBay. Let me provide a little more perspective on each.ĮBay accelerates PayPal’s success … From the beginning PayPal has benefited from signing up eBay customers with virtually zero acquisition costs.
Let me highlight three that we believe are among the most important: PayPal and eBay make sense together for many reasons. And we strongly believe that keeping the company together is the best way to create growth and maximize shareholder value. We are committed to doing what’s best for the company and for shareholders. Our management team and world-class Board of Directors have considered this as part of our routine evaluation of all of our strategic options. I spoke about this on our earnings call on Jan. Investor Carl Icahn recently notified us that he is submitting a non-binding shareholder proposal to spin off PayPal and separate the business from eBay Inc. We are seeing a convergence of commerce and payments businesses, not a separation. In fact, today we see more and more commerce and payments competitors trying to replicate the eBay and PayPal model.
No other payments competitor has achieved PayPal’s success – because no other competitor has a commerce platform like eBay.
#DOES PAYPAL CHARGE A FEE TO BUY ON EBAY OFFLINE#
It’s why we believe we are so well positioned to lead in the blended worlds of online and offline commerce.
This is what we do – and we have been successful exactly because PayPal and eBay are together. And we’re innovating to make payments a way to drive engagement and create more value for consumers and merchants. We strive to make it easy, safe and secure. So we focus on taking the friction out of paying. Payments is an essential part of commerce. Connecting buyers and sellers – anytime, anywhere – is how we drive growth and create value.
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