After years of industry pressure for PayPal and eBay to split, the ultra-resistant eBay board this week surprised all, reversed itself and agreed to spin off PayPal late next year.
Apple Pay’s intensely-hyped rollout and Alibaba’s massive IPO were the most frequently-cited reasons for the change of heart. But a panel of experts said the more interesting question is whether this move will ultimately help either PayPal or eBay.
Free advice for PayPal was not hard to find. North American Bancard CEO Marc Gardner argued that PayPal has to stop being obsessed with large national retail chains and turn to where the real money—and much better contract terms—can be found: small merchants.
As MPD CEO Karen Webster penned: “PayPal is a big player that doesn’t really need eBay any more.” Karen also tried putting the deal into industry context. In another column, she made the case that “payments is about co-opetition in spades. PayPal is a competing payments network yet huge customer of Visa and MasterCard. Apple Pay and Visa Checkout are digital competitors in spite of how closely they are working to launch Apple Pay.”
The news got a little worse for PayPal near the end of the week. A glitch caused PayPal to keep money from its sellers—for several hours. What could be worse than that? How about Bloomberg running a full story about how PayPal is looking less cool to kids, when compared with the shiny new toys from Apple.
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