How does eBay’s new payment service Adyen work, when will it launch and why is PayPal being replaced?
eBay's agreement with PayPal, which it bought in 2002, will officially end on 2020
ONLINE shopping titan eBay is to replace PayPal with the lesser known Adyen as its payment system.
PayPal's shares took a 10 per cent nosedive following the announcement in February 2018 - but who is the European firm ousting the financial giant?
What is Adyen and how does it work?
Netherlands-based Adyen is an online payment company valued at around $2.3billion (£1.6billion).
With offices in Sao Paulo, London and Berlin (to name a few), its clients can take advantage of electronic payments, credit and debit cards and even local banking methods.
Speaking of clients: which brought in $178million (£125million) in 2016 compared to PayPal's (£1.4billion).
It does not charge for a monthly subscription or set-up, only a processing fee plus commission per transaction.
When is eBay transitioning from PayPal to Adyen?
The agreement between eBay and PayPal .
eBay will begin the transition in the second half of this year and hopes most of its customers will be using Adyenby 2021, .
But shoppers will have an option to use the off-platform PayPal as a payment option until 2023.
eBay and PayPal have been synonymous since the online auctioning company acquired it in 2002, but the two parted ways in 2015 to .
Why is PayPal being replaced and what has eBay said about Adyen?
In a word: Cost... eBay said switching to Adyen would mean lower costs and "more control" for its merchants, allowing them to track their transactions on eBay instead off having to go off-site with PayPal.
"We believe that we can offer a more seamless experience while giving buyers and sellers more choice for payment and payout options," .
eBay also believes it can expand into more regions around the world with Adyen .
"Adyen is uniquely positioned to meet the needs of high volume global marketplaces like eBay," said Adyen CEO and co-founder Pieter van der Does.
The latest on eBay
How have eBay and PayPal been performing lately?
PayPal shares predictably fell to £53.87 after the announcement.
But its stocks doubled in the past year before .
eBay, which has assets of around £16.7billion, brought in £1.8billion in revenue in its last quarter.