It is estimated that total Payments processed by PayPal Inc. are coming from eBay. PayPal started to migrate from its parent company EBay in 2015, which used to process payments for its parent company to become a company which processes payments for large companies and their customers including individuals worldwide and PayPal has successfully achieved this vision so far.
PayPal’s new strategic vision and direction have created numerous strategic partnerships with large financial firms and tech giants such as Alphabet Inc, Apple Inc, Visa and JP Morgan. According to Thomson Reuters I/B/E/S while forecasting PayPal shares estimated earnings from 52 cents per share to 54 cents per share.
The revenue forecasted is the US $15 billion to the US $ 15.25 billion for the whole year, the company has processes US $131 billion in payments during the fourth quarter which was up by 32% as compared to the same period the previous year. PayPal also added 8.7 million active customers to the existing customer base.
However, eBay has announced that it will use Dutch Payments Company Adyen to process eBay payments on the platform, so users would not be redirected to third party Company while checking out. PayPal, on the other hand, said that eBay shoppers would still be able to use PayPal as a payment option until July 2023.
PayPal shares initially fell by 5% after EBay’s announcement but the CEO PayPal Dan Schulman said: “Changing relationship with eBay was quite manageable and it was the part of PayPal strategic direction.”
It is true that PayPal’s revenues would be affected due to this development because 13% of the payments is not a grain of salt. But in the long run, PayPal and eBay both would remain stable, not be impacting much the revenue growth of the companies.
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