EBay, the online e-commerce company, is collaborating Payoneer, a business-to-business (B2B) payments company, to allow eBay users to pay e-commerce sellers in different currencies to provide faster multi-currency payments on the platform.
EBay is looking to revamp its payment options after its split from long time payment provider PayPal. EBay turned to Adyen to provide payments gateways for buyers and sellers on its website, and is now working with Payoneer to facilitate faster cross-border multi-currency payments to meet increased demand.
B2B payments are supposed to reach $35 trillion in 2022 compared to a COVID-related low of $27 trillion, representing a 30% increase, according to a Juniper research.
The collaboration between eBay and Payoneer will allow sellers to get faster access to funds and expand the reach of sellers to list their products on multiple international eBay sites, as they would be able to accept payments in different currencies.
The e-commerce websites' active users increased 7% year-over-year (YoY) to 187 million in Q1 2021, compared to 174 million in Q1 2020. EBay's total gross merchant volume (international+U.S.) also increased 5% YoY to 27.5 billion in Q1 2021 compared to 21.9 billion in Q1 2020. The San Jose based-company posted revenue of $3 billion in Q1 2021 a 42% increase YoY.
EBay is looking to modernize its payments processing channels through its collaboration with Payoneer, Alyssa Cutright, Vice President of Global Payments at eBay, said in the press release.
The pandemic hit cross-border payments hard, as global trade declined in 2020, but is expected to rebound in the coming year, according to a Juniper research. The total value of B2B cross-border payments will reach $35 trillion in 2022, from a COVID-related low of $27 trillion in 2020, growth of 30%. However, the long-lasting economic impact of the pandemic means that cross-border values will only exceed 2019 values by 2022, the report stated.
Despite the pandemic weighing heavy on many businesses, Payoneer saw its revenue increase in 2020. The New York-based company processed $44.4 billion in payments volume in 2020, a 53% increase from 2019. Payoneer's revenue also jumped 30% over the past two years to $345.6 million last year, up from $260.1 million in 2018, according to regulatory filings for the SPAC.
After experiencing a growth in revenue, Payoneer decided to go public via SPAC merger led by Philadelphia bank founder and fintech investor, Betsy Zubrow Cohen. The future acquisition will value the company at $3.3 billion.
The move comes in as eBay is looking to revamp its payment gateways, given that its working relationship with PayPal is set to expire in July 2023.
For years, eBay and PayPal were owned by the same parent company after eBay bought a majority stake in PayPal after its IPO in 2002. Sellers on eBay could create an account with PayPal, and PayPal would fully manage their payments from start to finish.
EBay wanted to diversify its payment options rather than asking consumers to create a payment account on PayPal, Cutwright told Payments Journal.
According to PayPal's Q1 2021 earnings report, eBay's total payment volume on PayPal declined by 3% YoY in Q1 2021. PayPal has partnered with other e-commerce companies as its agreement with eBay is ending.
"The expiration of our operating agreement with eBay has enabled us to launch an extensive partnership with Alibaba," PayPal CEO Dan Schulman said during Q1 2021 earnings call. "This global agreement will enable hundreds of millions of consumers outside of China to shop across Alibaba sites in China."
EBay turned to Adyen, PayPal's rival for payment processes, and has been working with Adyen since 2018. When customers check out, they will have the option to stay on eBay and use Adyen's payments gateway or leave the website and use PayPal. Adyen promised to provide reduced costs for sellers and a simpler pricing structure compared to PayPal.
Adyen's platform allows eBay to integrate it as a gateway into other local forms of payment, while "eBay is facilitating transactions between the buyer and the seller, with buyers completing their purchases on eBay and sellers being paid directly into their linked financial accounts," an eBay spokesperson told Payments Dive.
The e-commerce company is looking to make its cross-border payments faster and plans on adding more features such as multi-currency payout through its collaborations with Payoneer.
"Their goal of creating a streamlined, modern marketplace that simplifies cross-border commerce is one that resonates deeply with us and our customers," CEO of Payoneer Scott Galit said in the press release. "We look forward to working with eBay to provide the best possible experience to sellers all over the world."
The companies didn't comment on when their partnership started.
"Effective April 2021, Payoneer is managing payouts for eBay sellers from Greater China," the eBay spokesperson said. "eBay and Payoneer intend to expand the service to additional countries later in the year."