Wonder what’s behind eBay dumping PayPal as it’s major payments processor? It is being reported Dutch company, Adyen will be the new payments processor for marketplace payments. Possibly PayPal is concerned about being a partner in eBay buyer return fraud?

eBay Chooses Adyen For Marketplace Payments Processor
eBay Inc is reportedly dumping PayPal for dutch company Adyen to process marketplace payments.

We’ve read horror stories about how sleazy eBay buyers are stealing money from eBay sellers in whats called return fraud. This kind of payments fraud goes something like this.

Buyer purchases an iPhone from a new or occasional eBay seller. Seller ships item to buyer who either claims it did not arrive or was not as described. eBay tells PayPal to refund buyers money and takes the proceeds back from the seller.

If the seller has a lot of friends on social media that make loud noise eBay will fold and give the seller his money back. If not the seller is stuck like Chuck with no item or money! An example of eBay buyer fraud is here.

From CNN Tech: EBay (EBAY), one of the world’s biggest online marketplaces, announced Wednesday that it’s dropping PayPal as its main partner for processing payments in favor of Dutch company Adyen.

The news prompted investors to offload PayPal (PYPL) stock, which fell more than 11% in after-hours trading.

The two U.S. tech companies have a complicated history. In 2002, eBay paid $1.5 billion to buy PayPal, an online payments company whose founders include Silicon Valley heavyweights Elon Musk and Peter Thiel.

It proved to be a very successful investment. When eBay spun off PayPal in 2015 — something investors and analysts had urged it to do — the payments company’s market value was close to $50 billion. It’s now above $100 billion.

Despite the split, the two companies’ businesses have remained tightly linked. PayPal continued to process payments for eBay and is the preferred payment method for most of the buyers and sellers on the site.

But eBay is now moving to cut those ties. The ecommerce company plans to take more direct control of payments on its site with help from Adyen.

EBay said the benefits of the changes would include lower costs for sellers and more payment options for buyers.

The shift will start gradually in North America later this year and eBay expects most marketplace customers around the world to be using the new system in 2021.