PayPal to become a sovereign company

Wednesday 1 October 2014 14:13 CET | News

eBay has informed its Board of Directors that a plan to separate itself from PayPal in 2015 is set in place and is subject to customary conditions.

The company expects to complete the transaction as a tax-free spin-off in H2 2015, subject to market, regulatory and certain other conditions.

John Donahoe, eBay President and CEO and Bob Swan, company CFO, will be responsible for leading the separation of each business, with board oversight. This includes determining the appropriate management and capital structures for eBay and PayPal, and putting in place the appropriate operating agreements.

Devin Wenig, currently president of eBay Marketplaces, will become CEO of the new eBay company. As CEO of eBay, Wenig will lead the eBay Marketplaces and eBay Enterprise businesses.

Revenue from September 2013 to September 2014 for these 2 businesses grew approximately 10% year-over-year to USD 9.9 billion, with eBay Marketplaces accounting for about USD 8.7 billion. eBay Marketplaces and eBay Enterprise collectively handled approximately USD 85 billion of gross merchandise volume and gross merchandise sales, which grew 13% year over year.

Scott Schenkel, currently the CFO of eBay Marketplaces will become the CFO of the new eBay company.

Concurrent with the announcement of the business separation plan, the company also today announced the appointment of Dan Schulman to be President of PayPal, effective immediately, and CEO-designee of the standalone PayPal company following separation.

Schulman joins PayPal from American Express, where he was president of the company’s Enterprise Growth Group. A seasoned leader in multiple industries, Schulman has held senior executive and CEO roles at AT&T, Priceline and Virgin Mobile, prior to joining American Express.

PayPal is growing in digital payments and digital wallets, with more than 152 million active registered accounts. Accounts grew 15% year-over-year in Q3 2014. Revenue from September 2013 to September 2014 grew by 19% over the prior year period to approximately USD 7.2 billion.

Presently, PayPal operates USD 1 in every USD 6 spent online. Total payments volume over September 2013 to September 2014 increased by 26% to USD 203 billion. PayPal is localized in 26 currencies, is available in 203 markets worldwide and has relationships with 15,000 financial institutions.

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Keywords: PayPal, eBay, spinoff, separate, Payments Gateway, ecommerce, marketplace, online payments, merchants
Categories: Payments & Commerce
Countries: World
This article is part of category

Payments & Commerce