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PayPal goes at it solo again, sees value soar

By Bryan Chan & Marcus Wong - on 27 Jul 2015, 4:51pm

PayPal goes at it solo again, sees value soar

PayPal recently split from partner eBay, going back on the NASDAQ under the ticker “PYPL”, and the move has seen the company’s value soar to some US$46.84 billion, about 36 percent more than partner eBay, who is currently sitting at US$34.39 billion.

This is a sign that investors see greater potential in the payment portal which has about 169 million users and processed about US$1.1 billion in payments in the second quarter of this year alone. Analysts think the trend towards payment channels such as mobile devices create an incredibly prime environment for the PayPal to thrive in, and the company itself is embracing the need for its services to be better integrated with external software developers.

Dan Schulman, PayPal's President, acknowledges that that has been a traditional weak point for the company, but it has now become a point of focus to “disaggregate” the platform, making it easier for developers to make changes on the fly. PayPal wants to get to the point where it can even act as a middleman for Apple Pay or Google Wallet online payments, so that you can go to a shop powered by their service, click on the PayPal button, and have the services available as payment options.

The company has also developed PayPal One Touch to ride on the growth of mobile payments. PayPal One Touch is a button online businesses can put on their site to let users order stuff with just a touch that PayPal has made available to mobile developers. This means that companies can now build this functionality into their mobile apps so you don’t have to leave the app to complete a one-touch order.

As for eBay, PayPal will continue to serve the online marketplace for the next six years at least, with an agreement in place to ensure that roughly 80 percent of the gross merchandise sales on eBay run through the portal. If PayPal’s share drops below that level, eBay will pay it restitution. If PayPal’s percentage of sales goes above that mark though, PayPal will pay eBay a percentage of its sales as commission, thus ensuring that both parties continue to serve each other for at least the next six years.

Sources: Business Insider, The Wall Street Journal, The Verge, Fortune.com, PayPal