eBay Breaks it Off with PayPal - What it means for sellers

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E-commerce behemoth eBay is officially abandoning online payments system PayPal after 15 years, opting for a new service that’s expected to deliver benefits to sellers.

eBay announced that it would stop working with PayPal in 2020 and transition to Adyen, an Amsterdam-based payments company, later that year.

Adyen’s customers include tech industry giants Uber, Netflix, and Spotify.

Adyen primarily provides back-end payments services, like credit card processing, and won’t have a visible presence at the eBay checkout, unlike the “pay with PayPal” button.

eBay users will continue to have the option of using PayPal until 2023, but it will effectively be relegated to “second-class status”.

PayPal has been eBay’s main payments provider since 2003. In the same year, eBay acquired PayPal in a deal valued at $1.5 billion.

eBay and PayPal parted ways in 2015 and become separate public companies, but maintained close business ties.

The announcement that eBay is officially breaking away from PayPal marks the end of one of the tech industry’s “most storied partnerships”.

Why eBay abandoned PayPal

eBay says it’s moving from PayPal to Adyen in order to “improve its customer experience” by intermediating payments on its marketplace.

“In doing so, eBay will manage the payments flow, simplifying the end-to-end experience for buyers and sellers,” the company said in a statement.

It seems that the main motivation for the switch from PayPal to Adyen is enhanced user experience.

eBay says that the ecommerce landscape is becoming increasingly competitive and users expect to be able to both shop and checkout on the site on which they transact.

So rather than completing payments through an external provider like PayPal, eBay wants to keep everything in-house and on-site with Adyen.

Adyen’s service extends to more than 150 currencies and over 200 methods of payments, which provides increased flexibility for eBay users.

What it means for sellers

eBay says that it’s focussed on improving customer experience, but what does the shift to Adyen mean for sellers?

Costs for sellers mostly the same

Under the new 'managed payments' system, sellers pay 12.9% eBay fees per sale + 30 cents, as opposed to the old system where they'd pay 10% eBay fees, 2.9% Paypal fees + 30 cents. So the fees are the same as before on most items, although eBay's cut does change slightly between product categories and may be higher than this.

eBay says sellers will also benefit from a more simplified pricing structure and more predictable access to funds.

A central place to manage business

It sounds as though eBay is working on an integrated business dashboard for sellers to manage all aspects of their online stores in one place.

In a statement, the company said it is “working on solutions to provide sellers with information about their eBay business, inclusive of payments information, in one place so that sellers can easily track and manage all of their transactions and customer interactions on eBay”.

As promised, eBay has been rolling out a range of new tools for sellers, including a new listing tools and the ability to add product videos. The company is continually adding to these to improve sellers' capabilities, so it pays off to keep checking back and making sure you're using functionalities to their full advantage.

Greater reach and more sales

This is a bold claim for eBay to make. But the company believes that the switch to Adyen will allow sellers to “reach more buyers and improve conversion”.

eBay says that offering buyers a greater range of payments options and currencies will allow sellers to reach more potential customers.

Also, having greater flexibility and a more streamlined process at the checkout may reduce cart abandonment rates and increase conversions.

The legitimacy of this claim is yet to be tested, but eBay seems confident that by making shopping easier for buyers, it will make business better for sellers.

PayPal to remain as a payment option

Sellers that rely on PayPal to conduct business on eBay don’t have to worry about being left behind.

PayPal will remain as a payment option on eBay until July 2023, allowing plenty of time for sellers to transition to the new system.

eBay says that “PayPal will remain an important partner”.

It seems that PayPal will continue to have a place on eBay, it will just be less prominent.

Sharing more data

It will be business as usual for sellers on eBay during the transition process.

However, eBay says that sellers should expect to provide them with “some additional payments-related data and transition to a new relationship with eBay that includes integrated payments capabilities”.

New terms, which came into action on 1 June 2021, say the new payment system is compulsory, and that the company has the power to limit or remove listings from sellers who refuse to use it.

This won’t happen immediately, but eBay expects that the transition for sellers will occur prior to July 2021.

With an estimated 25 million sellers on eBay, this transition will take some time to complete.

Reaction to the eBay-PayPal breakup

The move from PayPal to Adyen has, for the most part, been met with uncertainty within the eBay community.

Sellers have shared concerns about eBay potentially taking control of their money, fees, and sharing payments-related data with a foreign company.

The lack of detail in eBay’s public statement seems to have left sellers feeling unsure and concerned about the changes.

It has also given rise to unfounded speculation around eBay’s plans and intentions. However, some eBay users are choosing to “hold off judgement” until more information becomes available.

Alternatives to PayPal on eBay

eBay and PayPal have been joined at the hip for the best part of 15 years. Even when the companies parted ways in 2015, they struck a deal that required eBay to conduct 80% of transactions via PayPal.

In the same year, eBay also told sellers that they would no longer be able to use alternative payment processing services Skrill (formerly Moneybookers), ProPay, and Paymate.

This is why the announcement that eBay is breaking away from PayPal is so significant and, perhaps, why many sellers are upset about it.

PayPal is familiar and reliable.

Sellers don’t have to abandon PayPal on eBay as the service will still be available until at least July 2023.

For those who want to try an alternative to PayPal on eBay, there isn’t much to choose from.

eBay says that it allows:

  • Credit and debit card transfers
  • Payment upon pickup

It restricts access to:

  • Bank-to-bank transfers (bank wire transfers and bank cash transfers)
  • Checks
  • Money orders
  • Online payment services: Allpay.net, CertaPay, hyperwallet.com, Fiserv, Nochex.com, XOOM

However, there are very few verified reviews of these alternative services online, suggesting that most sellers have been opting for PayPal.

Also, some of these alternative online services are restricted to specific countries. For example Allpay.net only works in the United Kingdom and parts of Europe, and CertaPay is only available in Canada.

The news that Adyen’s service extends to more than 200 payment methods could mean that eBay is about to become more flexible for buyers and sellers.

Frequently Asked Questions

It can be! It is a multi billion dollar industry estimated to be worth over 266 billion by 2027 so there is absolutely room to tap into the market and make a profit. 

Yes, as of 2023, eBay accepts PayPal and you can use it to pay for your items on eBay. To pay with PayPal, all you have to do is select PayPal as your payment method at checkout and enter your account information. You can use PayPal to pay for eBay items as a member or guest.

On eBay, different categories affect the type of payment that is accepted. Generally, in most categories, credit cards, debit cards, Apple Pay, Google Pay, and PayPal are accepted and checks, money orders, and bank wire transfers aren’t allowed for most eBay purchases.


About the author
Simon Slade
CEO of SaleHoo Group Limited

Simon Slade is CEO and co-founder of SaleHoo, a platform for eCommerce entrepreneurs that offers 8,000+ dropship and wholesale suppliers, 1.6 million high-quality, branded products at low prices, an industry-leading market research tool and 24-hour support.

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  • Hugh 26th of August
    I will be happy to use another payment system if it has better security. I have been scammed twice so far on eBay where my delivery address was changes without my knowledge. First time was eBay poor security, 2nd time Paypal.
    Neither of these companies emailed me to alert me to the change of address (unlike every other org I use on the web): sloppy & unprofessional.
  • Valerie Gifford 1st of November
    I changed my bank and subsequently am not able to log in to PayPal and they have £187 of mine in their account! I don't know how to get it back to my own bank account.
    Very disturbed by this. When I telephoned PayPal, they were terribly rude and informed me I had £42! So angry! I threatened them with court proceedings but I don't know how to do that!
    Having been scammed out of £80000, I really need the money from EBay sales to live!
    • bhupinder virdi 1st of September
      I got £1000+ in paypal credit but £5000 in sales and closed down my account. Now my credit said I would get it in 180 days !!!
    • John 10th of October
      What? Your story makes no sense. I don't see how changing your bank means you can't log in to Paypal. Just log in and add the new account. Then you're talking about 187 pounds, and then you've been (allegedly) scammed out of 80,000 pounds. If i'd been scammed out of 80,000 pounds I'd very quickly be engaging legal help.
  • mohammed mir 12th of January
    i was not that confident that paypal would work to bring about a sales transaction for my item, i even decided to create my own site with a Stripe payment gateway to test if money flows in.
  • 23rd of January
    once again, ebay with their infinite wisdom, is ruining their own business. paypal is and has been the most effective, trustworthy, satisfaction guaranteed company that i have had the HONOR of working with!.....anytime there was a problem, paypal took care of it and with ease and speed....over the years that i've been selling on ebay....paypal has been the ONLY reason i stayed. ebay has " fixed " things that werent broken and has taken the appeal, excitement, and fun out of it's own company.....they say your payments will be available in 2 to 4 days! paypal was instant. congrats ebay. i cant wait to have problems with payments and have to go to my bank about it. ebay is losing customers at a huge rate because they dont appreciate the sellers....
    • Vinnie Starr 3rd of April
      PayPal is a terrible company, rip off fees, money goes missing and then they tell you the opposite even though you are sat looking at the screen telling you to the contrary. I hope this drives them under and we are finally rid of them. Now if only there was a real alternative to eBay.
      • Rhea Bontol SaleHoo Admin 7th of April
        Hi Vinnie! You can checkout alternative selling sites in this article.
    • Don Sutton 21st of August
      I to am frustrated with eBay , they are now charging 12.5 percent of the sale price plus 12.5 percent on shipping charges . Your money is not instant like with PayPal . Even if you opt for daily bank transfers it takes up to three days to arrive in chosen bank account . I have been selling on eBay for over 15 yrs. and I am seriously thinking of telling eBay to go to HELL !!! I am not happy .
  • peter griffin 7th of February
    i didnt receive an item from a seller..over £600..they took my money out of the account,,,refunded the money back to my paypal account several times.then kept cancelling the payment.and refunding again,.so i asked paypal to step in and guess what..they went with the seller..so me,no money and no item ,,bye bye paypal...adios.and good riddance.....so its off to the bank now for a chargeback,,,,a rude service,i had the phone put down on me several times asking for help.
  • Steve 15th of June
    Screw PayPal. They locked my account a decade ago, so I can't use it for my eBay store. PayPal has been reliably unreliable for many others, as well. Can't trust 'em and you live and die by their rules alone. I for one am super excited about being able to use another company and start fresh since PP won't let you, even 10 years after their initial decision.
  • David Ailles 5th of July
    I will not use Paypal after experiencing their Kangaroo Court experience where I send according to the buyer's directions and end up without the item and without the payment. The when canelling my account (which is hell) they send an email that canceling may eliminate my loyalty points.

    After 13 years and thousands of purchases and sales, with a 100% feedback, One transaction and they prove that Paypal trying to scare me into not Cancelling.

    I look forward to trying the new financial company with Ebay administering transactions.

    Good riddance Paypal!
  • gary hamm 7th of July
    yes im glad that i can move these paypal are a joke ive been scammed and paypal went in the scammers favour ive phoned them 45 times emailed them and got please go to our help page you bunch of clowns
  • Mike 16th of July
    I'm actually glad Ebay is doing away with rip you off Paypal. Especially since Paypal now doesn't return their fees if someone cancels a transaction. I had two different buyers place an order and in less than a min. request to cancel. Seemed weird that both would happen on the same day but whatever i don't obligate anyone to purchase from me so i immediately agreed to the cancellation. But i got stuck paying the paypal fees for these transactions as Paypal would not refund the fees even though they saw what happened.Now their fee is supposed to be for a service. No service was provided as the transactions were immediately cancelled. I think what they're doing is illegal and i hope there is a Law Suit against them for this.
  • Enrique 3rd of August
    Is this real? Doesn’t eBay own PayPal.
  • Trey Hutchison 3rd of September
    I’m opting out. I’ve been a seller Off and on for over 20yrs and it doesn’t feel right having to jump through hoops for Ebays decision to cut ties with PayPal. Good luck EBay
  • Steve Rogers 6th of September
    Well written article! Do you think Ebay will not permit you to sell if you don't sign up?
  • Alan 22nd of September
    Thank goodness. Paypal is absolutely awful. High fees and lousy service. Trying to add money or send refunds can be an absolute nightmare. I hope Paypal dissappears from the face of the earth as it is so awful.
  • Sheri 23rd of September
    As a seller I would like the say so of when my funds are transferred into my account. I do not want them automatically put into my bank account for it to be tracked. I have a disabled child that I have to keep a certain amount of funds in for her to draw the disability funds she deserves. If that account goes over then she gets penalized even tho she’s still disabled. I am not happy about this at all.
  • Sam 9th of October
    So happy they are breaking up! PayPal is run by a bunch of thieves. I have had money sent to me by accident which I returned straight away and PayPal still charged me £67 for the transaction!! I hope you will go down PayPal!
  • Wilk Bryson 21st of October
    EBAY with there new payment system is terrible. I was receiving payments just fine then it stopped it has been 10 days sold over 1500.00 dollars and the cannot figure how to get money in account. Never been so frustrated as now it is my living and EBAY is hurting me. They do seem to care. Worst Company i have ever dealt with. Can someone Help me with Ebay
  • David Chester 8th of August
    I've just been shafted by eBay
    I have been a "customer" for two decades and 16 years with one account on which I just sold two items. They paid me for the first but they have withheld paying me for the second item of £300 until I show them a current photo ID which I don't have. My passport expired years ago and my driving licence is paper.
    It will take me weeks to get a photo licence while they have effectively stolen my money in the meantime. I will have to send the item for which I immediately paid £17 insured delivery, as it's not the buyer's fault.
    I believe this is criminal. Why a photo ID when they will never meet me in person? They won't accept a birth certificate. This is what happens when you can't use PayPal. Be this a strong warning to anyone selling on eBay.