eBay's PayPal X Platform Could Drive an Increase in Transactions

eBay (EBAY) recently announced plans to launch PayPal X a platform that allows software developers to create payment applications that utilize PayPal. With PayPal incorporated directly into applications, users will not have to navigate to a separate payment site to complete a transaction potentially driving more transactions for developers and PayPal.

If PayPal X is adopted widely it could have a positive impact on eBay's stock price by driving more transactions for each PayPal account. Payments per account on PayPal has fallen in recent years from 1.7 payments per account on average in 2005 to less than 1.2 today.

We estimate that PayPal constitutes about 24% of eBay's value and the stock could gain about $4 per share if payments per account on PayPal were to rise to 2005 levels as a result of PayPal X.

Disclosure: No positions

Comments

[UseMyBank]

PayPal gave all 1500 developers a netbook yesterday! The more payment options we have online the better for everyone.

2009 Nov 05 08:05 AM

[a. palmer jr.]

The problem with ebay is not the payment method, the search engine, the graphics, etc. The problem is they have the small sellers competing with the large sellers on an unlevel playing field. The small sellers are also the buyers, which is a big problem when it comes to sales. The small sellers left when ebay raised fees, postage rates went up, the economy tanked, and they also took the buyers with them when they left. Getting them back is going to require a reversal of ebay policies. Example: lowering all fees, restoring the sellers feedback, and providing a friendlier place for the small sellers to be. Unfortunately, ebay can't do anything about postal rates and the general economy, which may be bad for years to come.

2009 Nov 05 10:04 AM

[Leftfield]

Ebay has been so diligent at driving away small sellers that it seems they only want the site to be some sort of unappealing marketplace where large sellers offer their me-too products at me-too prices that is easier to manage with far less labor, and focus on Paypal.
It really wasn't necessary to kill Ebay, which is well underway, but I think it's valid to expect Ebay to continue the slide Donohoe started with his "turnaround plan" a year ago, and that the company really is, Paypal.

2009 Nov 05 11:56 AM

[bbowen7]

There are lots of competitors in the on-line selling business, but no real competitors in on-line payment where scale is critical. Can you imagine VISA, Mastercard, or AmEx as a monopoly?

2009 Nov 05 03:32 PM

[Philip Cohen]

eBay's PayPal X Platform won't drive an increase in transactions on the eBay Marketplace: it's continuing its journey down the toilet.

Where is the “eBafia Don” taking eBay?
www.auctionbytes.com/f...

2009 Nov 05 04:18 PM

[arlin]

ebay ..........really sucks for small sellers.

2009 Nov 05 04:45 PM

[Marc Michel]

The PayPal developers kit is over 300 pages long because the platform is absolutely sklerotic, built over a decade ago. ORCA's is 12 pages long. How many developers do you think are going to wade through 300 pages of rules?

2009 Nov 05 08:11 PM

[LeeT]

They have to adopt no sell no fee inorder to compete

2009 Nov 05 09:58 PM

[leapingcat]

Yet another reason to spin off Paypal and give investors the opportunity to make a reasonable return without being pulled down by the dead weight of Ebay.

2009 Nov 07 04:41 AM

[NYM Arts]

Please Google :
"nopaypal" and
"paypalsucks"
It's an eye opener.

2009 Nov 09 05:33 AM

[NYM Arts]

and here's a "Must See" :
Go to YouTube and paste this title in :
"ebaY Still Hacked Cracked and Hijacked for the Holidays " by cappnonymous, an EXPERT in ferreting out garbage on Ebay.

2009 Nov 15 01:38 PM