In 2002 PayPal became a wholly owned subsidiary of eBay and has been used to facilitate payments on the e-commence site. Due to the increasing pressures of the modern economic reality with Apple Pay, Alipay and Square, eBay and Paypal have agreed to part ways and Paypal will now be its own publicly traded company in 2015.
Devin Wenig, president of eBay Marketplaces, to become CEO of new eBay company following separation and American Express executive Dan Schulman joins PayPal immediately as President and CEO designee for PayPal post-separation.
PayPal has been on pace to overtake eBay’s core marketplace by sales. In the June quarter, the payments unit boosted sales 20% to $1.95 billion and added 4.1 million new active customers from the first quarter, to 152.5 million. PayPal facilitates one in every six dollars spent online, eBay said. At its namesake marketplace, revenue rose 9% to $2.17 billion as the number of active accounts increased by 3.8 million to 148.9 million.
“The payments landscape is hyper-competitive, the pace of change is accelerating and everyone is gunning for PayPal,” said Forrester analyst Denee Carrington. “The split will give PayPal greater agility to help it achieve its full potential.”
PayPal has been expanding beyond online and mobile payments and offering other financial services. It began lending money to small business customers late last year. And eBay bought Braintree, a payment processor used by startups such as vacation rentals site Airbnb and cab-hailing app Uber, a year ago for about $800 million and will be part of the PayPal unit.
Hopefully that now Paypal will be an autonomous entity they could really redeem themselves in the eyes of internet users. We have all heard of the horror stories of Paypal being used to facilitate Kickstarter payments, only to have the money put on hold and the developers have to jump through months of hoops to get any of it back, if they do get any of it back.