eBay drops PayPal for Adyen, could digital currencies be the next frontier for the online retail giant?
According to a CNBC report, eBay is phasing out its ties with PayPal in favor of payment processor Adyen in an effort to provide lower costs and more control for merchants.
PayPal may be one of the most established payment service providers around, but it has been met with fierce competition from a number of leading payment players such as Square, Stripe, and iZettle.
eBay announced that its integration with Adyen’s technology would enable sellers to have a more centralized view into their data while managing all transactions directly through the eBay platform. Adyen will work behind the scenes to deliver payment services for businesses so consumers won’t have to interact with Adyen directly. This means there will be no intermediation, unlike PayPal which requires users to open an account in order to pay for goods and services. “In a rapidly changing and competitive e-commerce landscape, shoppers expect to be able to both shop and checkout on the site on which they transact,” eBay said in a statement.
While Adyen has not been widely adopted by the masses, its clientele base is growing rapidly with a strong roster of companies including the likes of Facebook, Airbnb, Spotify, Uber, Etsy and Netflix. eBay will continue to let customers use PayPal during checkout until July 2023, but the majority of eBay payments will be processed by Adyen by 2021.
PayPal became eBay’s main payment provider in 2003, just a few months after acquiring the company for $1.5 billion. In July of 2015, the two companies went their separate ways and signed a five-year agreement to maintain business ties through mid-2020. While PayPal has diversified its business since the split, it has not disclosed how much business comes from eBay.
As of late, PayPal has been exploring the merits of blockchain technology and digital currencies, filing a patent to speed up Bitcoin transaction processing times. If the technology comes to fruition, it will support consumer-merchant transactions to be conducted instantly and off-chain while eliminating high fees. Nevertheless, PayPal faces stiff competition in this domain which has yet to address many of the shortcomings of cryptocurrencies, such as Bitcoin, Ethereum, Ripple and pioneers like COTI, Currency of the Internet. These include scalability issues, slow processing times, volatile prices, lack of buyer-seller protections, a complicated user experience and the absence of regulation.
While DAG-based systems like IOTA and Nano make up the spectrum of payment platforms that could provide viable solutions, they remain centralized and are solely payment applications, as opposed to providing infrastructure and services for any number of use cases.
With eBay looking to drive down costs and provide more control for merchants, COTI will be able to do just that and more by providing near zero fees and complete control for merchants while eliminating intermediation through its payment application COTI PAY.
COTI’s DAG-based Trustchain protocol creates a scalable and blockless protocol that can be utilized by any industry that requires immense scalability and an arbitration mechanism to resolve disputes, fraud (e.g. double spending) and errors. It also provides near zero fees, ease of use, regulation, price stability and decentralization for complete data control and disintermediation.
While COTI PAY is still in its early stages, it ticks off the boxes in all the right places, and time will tell if it becomes the next Adyen, providing payment solutions and more for countless retail giants around the globe.
The COTI community is growing rapidly. Our alpha net will be launching in September, be sure to sign up on coti.io. If you have any questions, you are welcome to get in touch with us on Telegram or via email.
