Online auction giant eBay has announced that it will be splitting with PayPal online payment company in 2015.
“Creating two standalone businesses best positions eBay and PayPal to capitalise on their respective growth opportunities in the rapidly changing global commerce and payments landscape,” read eBay’s statement on the matter.
In particular, it’s thought that the move is designed to free PayPal up to be a stronger player in a newly revitalised online and mobile payment market.
At present, eBay claims that PayPal handles one in every six dollars spent online, but new competition from Apple in the form of Apple Pay could well put that figure under threat. Meanwhile financial service institutions such as Visa are ploughing millions into their own online payment systems.
The thinking appears to be that a strong, independent PayPal is needed rather than one that’s under the wing of an established retail brand.
There has been pressure from investors for the two companies to go their separate ways for some time now, as it was seen that eBay was holding PayPal’s value (and thus potential for investment) back through their close association.
“As independent companies, eBay and PayPal will enjoy added flexibility to pursue new market and partnership opportunities,” said eBay’s current president and CEO John Donahoe.
However, the Donahoe is confident that two companies will continue to work together through various “operating agreements.”
Current eBay Marketplaces president Devin Wenig will become the new eBay chief executive following the split, while PayPal will be led by American Express executive Dan Schulman.
Read More: What is Apple Pay?
Via: The Guardian