PayPal divorce from eBay welcomed

UK: Ovum has welcomed the split of PayPal from eBay. Eden Zoller, principal analyst, Consumer, Ovum, said: “The decision to split PayPal from eBay next year is a smart move that will benefit the payments provider. PayPal’s revenues are not yet as big as eBay’s ($9.9 billion and $7.2 billion, respectively), but the gap is closing and PayPal is the faster growing business with 19 percent revenue growth year-on-year.

"At the same time, eBay now represents less than a third of PayPal's total payments volume. An independent PayPal will have the freedom to set its own strategic agenda terms in of management, investments, and priority areas for development.

"A standalone PayPal should be able to move more quickly and innovate more sharply, which is important given that the payments provider is facing increased competition on all fronts, from hungry start-ups like Stripe and Square to powerhouses like Amazon and now Apple that has 800 million iTunes accounts on file compared to 152 million active accounts for PayPal.

"We would expect to see an independent PayPal put even more emphasis on mobile payments where it has made good progress but it needs to up the ante and be more nimble, particularly as Apple has big ambitions to be a dominant force in m-payments.”