PayPal’s former parent, eBay, has appointed Dutch company, Adyen, as its new payment partner – causing PayPal shares to plunge 12% in after-hours trading.
eBay customers will reportedly be able to nominate Paypal as a payment option until July 2023.
The news came as PayPay disclosed better than expected quarterly earnings, however, its first-quarter outlook was largely disappointing. PayPal shares initially dropped 5% following the results.
By using Ayden, global customers are able to remain on eBay’s website when checking out.
Dan Schulman, PayPal CEO, affirms the company’s changing relationship with eBay is in line with company strategy and is “manageable”.
eBay reportedly contributes about 13% of PayPal’s total processed payments.
Following its early association with eBay, PayPal is now working to establish itself as a payment processor for financial institutions, large companies and their customers – notching partnerships with companies such as Google, Apple Inc, JPMorgan Chase & Co, Mastercard and Visa.
The strategy has largely been effective, notching a 32% YOY increase in payments processed, reaching US$131 billion in the fourth quarter.
The company has reportedly added 8.7 million active customers in the past year.
Net income jumped to US$620 million (in the quarter ending December 31st) from US$390 million the year before.
Net revenue climbed from US$2.98 billion to US$3.74 billion.
PayPal forecasts full-year revenue of between US$15 billion and US$15.25 billion.
