eBay's PayPal: We will double in size by 2011

eBay's PayPal: We will double in size by 2011

Summary: PayPal president Scott Thompson said today during briefings for analysts that the service should double in size in the next three years, processing between $100 billion and $120 billion in annual payments by 2011.That could be a welcome boost for parent company eBay, which posted drops in revenue and profit in the last quarter and has seen its stock lose 80 percent of its value since late 2004.

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PayPal president Scott Thompson said today during briefings for analysts that the service should double in size in the next three years, processing between $100 billion and $120 billion in annual payments by 2011.

That could be a welcome boost for parent company eBay, which posted drops in revenue and profit in the last quarter and has seen its stock lose 80 percent of its value since late 2004.

PayPal, which has 70 million active user accounts, processed $60 billion in transactions in 2008 and is eBay's second-largest business. It runs local sites in 17 languages and accepts 19 currencies for transactions.

PayPal reported $2.4 billion in 2008 revenue, while eBay as a whole took in revenue of $8.5 billion. The projected increase in PayPal's volume would translate into $4 billion to $5 billion in revenue in 2011, Thompson said.

PayPal plans to achieve this growth by continuing to grow on the eBay site, as well as by increasing the service's use among merchants that aren't part of eBay. PayPal is looking toward handling more mobile transactions and payments for businesses such as banks, non-profits and online social networks.

"It doesn't matter where you go online today; almost everybody needs a fast, secure way to pay for something," Thompson said.

PayPal is still combining its operations with Bill Me Later, a company eBay bought in October that lets online retailers extend credit to shoppers without requiring detailed application forms. This will let people choose to pay for purchases immediately through PayPal or be billed at a later date through Bill Me Later.

eBay shares were up 33 cents, or almost 3 percent, at $11.43 in afternoon trading.

Topics: Enterprise Software, Banking, E-Commerce

Andrew Nusca

About Andrew Nusca

Andrew Nusca is a former writer-editor for ZDNet and contributor to CNET. During his tenure, he was the editor of SmartPlanet, ZDNet's sister site about innovation.

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10 comments
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  • No one smart uses PayPal anymore

    After the horror stories that anyone googling the words "PayPal" and "problems" can see. Until PayPal changes their policies, I am not going to do any business with them at all. If that means avoiding eBay.... so be it.
    Lerianis
  • RE: eBay's PayPal: We will double in size by 2011

    Agreed. When both parties act in good faith, PayPal is a fine way to transfer money (if expensive).

    But when they don't, it can be a horrific nightmare -- for buyer or seller.

    Sadly, the folks on the other end of the "resolution center" appear to be an understaffed team of minimum wage flowchart jockeys, who aren't given time to understand the case they're working on.

    Good luck to eBay if their intention is to fix this problem, but I see zero evidence of this.

    Amazon and Google need to get their fingers out and prevent eBay from locking them out of providing alternative payment services to eBay users.
    richij.com
  • not by my re-joining....

    I got so many phishing attacks as a member of PayPal that I gave up. It was worse than the viagra and golf ball spam. The worst part was their response to my complaints - NADA. Goodbye PayPal.
    ca1ic0cat
  • RE: eBay's PayPal: We will double in size by 2011

    I have cut back my use of Ebay and PayPal as much as possible due to their business practices.

    dswanson2609
  • RE: eBay's PayPal: We will double in size by 2011

    When California slides into the sea I hope this company will be the first one in. Never in my life(I'm 82) have
    I been treated so shabbily by anyone I have ever done business with. So, anyone using them let them be warned
    their money, checking account, and credit cards are at risk. And you will not have effective means of recourse!
    letu27
  • the rot that is PayPal

    My objection to PayPal is the fact that eBay now FORCES its buyers and sellers to use this "service" for most transactions. Such triple-dipping by eBay (listng fees, commissions on all sales, and now transacrion fees collected thru PayPal) should be illegal.

    No business can be allowed to use force and intimidation as a substitute for adding value. Unless and until people WANT to use PayPal on the merits, other perfectly legal options MUST remain available (cash, checks, money orders) for them to settle debts.

    PayPal (in its present form) is a foul cancer that must be elimiated. A rogue business model that has run amok for far too long. Kudos to all those eBayers and others who have the courage and inclination to take on the beast.
    dmennie
    • PayPal

      I sure agree with you wholeheartedly. I was a
      power seller with a 100% feedback rating after six years and they treated me like I was a criminal and made me the loser of $700.00. And the nerve of those guys - - If you just want to buy some little thing for a few bucks they won't let their sellers advertise other ways of paying
      letu27
      • payment options

        Most of my eBay buying has been over $100 and I haven't bought anything lately - I've never listed anything under $1k. So I don't know what you mean. Are you saying that eBay won't allow a cash or check payment for items below a certain threshold? Is that legal?

        If you have some time please elaborate. Thanks!
        ca1ic0cat
        • Payment terms

          eBay rules for the seller specify that the seller may not solicit for payment by check or money order in any of their listings. They specify that you only accept Paypal (or your own merchant account, and other "accepted" payment processors) and nothing else. In other words, your payment terms may not say "I accept Paypal, Checks, and Money Orders". Doing so is grounds for having your listing terminated without refund of fees, or suspension from eBay.

          However, if the buyer asks you if you will accept payment via check or MO, you have the "option" of saying "yes I will" or "No I will not, Paypal only". Only the buyer may ask you, you cannot say "I take Check/MO" first.

          If, after the auction ends, the buyer asks you if you will take a check or MO, and you say "no, I can't, eBay will not allow me to, Paypal only, sorry", they CAN leave you negative feedback. Great, isn't it?

          eBay will then DENY you were allowed to accept a check or MO at your discretion and will not back you up at removing said negative.

          Talk about a DOUBLE STANDARD.
          WindowWasher
          • thanks for the clarification...

            ...guess I'm done selling on eBay because I won't use PayPal.

            Or I'll just fly under the radar.

            But it's no wonder their stock is going down.
            ca1ic0cat