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For years, the global e-commerce marketplace eBay relied on a full referral model to PayPal to process payments. Sellers around the world were required to open a PayPal account to list and sell items on eBay, and PayPal would fully provision and manage their payments from start to finish.
This lasted for 13 years, during which eBay and PayPal were part of the same parent company. Everything changed in 2015, when the two organizations split into independent standalone businesses. Fast forward five years and eBay is now facilitating the movement of money between buyers and sellers directly on its platform (with some help from its new payment processing partner Adyen).
To learn more about how eBay modernized its payment processing to better meet the needs of buyers and sellers alike, PaymentsJournal sat down with Alyssa Cutright, VP of Global Payments at eBay.
Global consumers have region-specific payment preferences
While eBay’s years-long arrangement of outsourcing its entire payment stack to PayPal was beneficial to the company for several years, it simply doesn’t live up to the expectations of today’s global consumers.
These expectations include the ability to buy and sell with an edited choice of relevant and preferred forms of payment. Because eBay is a global company that processes many cross-border transactions, “a big part of ensuring that those buyers have the experience they expect is that when they get to checkout, there’s a familiar form of payment for them to complete the purchase,” said Cutright.
What these forms of payment are varies around the world. For example, Australian consumers enjoy using Afterpay, a buy now pay later (BNPL) model that enables them to split their payment over a number of interest-free installments. When eBay added Afterpay as a payment option in Australia, there was an immediate and noticeable uptick in adoption.
Meanwhile, bank-based payments, where direct debit payments are pushed directly from a bank account to pay for a transaction, are popular in Germany. As a result, “those are very important forms of payment for [eBay] to have integrated into that market,” explained Cutright.
eBay’s partnership with Adyen improves payment processing
eBay’s commitment to stay on top of the payment trends of local markets and bring new forms of payment to its platform was a major factor in choosing Adyen as its lead payment processing partner. “[Adyen] has a flexible platform that allows [eBay] to integrate with it for the merchant acquiring process or as a gateway, a connectivity bridge, into other local forms of payment,” said Cutright.
Through the partnership, eBay can offer new payment choices. Consequently, buyers can access their preferred payment choices, creating a more seamless checkout experience. “We’re watching really closely and listening to our buyers to ensure that, at the end of the day, they’re making it to checkout. That’s what’s most important to our sellers. They want the sale, we want the sale, and we want it to be really seamless and really fade into the background,” she added.
Additionally, eBay’s newfound capability to pay sellers directly through its platform comes with another payment processing advantage: enhanced security. “By moving to managing payments on the platform, eBay is investing even more aggressively in fraud prevention,” said Cutright.
In-house processing allows eBay to remain a top global marketplace
Ultimately, eBay’s decision to modernize payment processing by partnering with Adyen to manage payments on its own platform has made it possible for the company to meet the expectations of buyers and sellers across the globe.
“Bringing it in house and ensuring that we’re crafting the right experience has been paramount in ensuring that we are coming up to the bar of what buyers and sellers expect and in crafting best in class, next generation experiences in the lens of a modern managed marketplace,” Cutright concluded.