SEC Filing Adds Details to PayPal/eBay Split
April 13, 2015
While the world has known for some time that eBay would be going through with its long-rumored spinoff of payments arm PayPal , an SEC filing late last week shed some light on how much things would change post separation. While not much will change in the short term, the non-compete provisions of the filing were interesting.
According to the SEC documents, eBay will agree not to launch a payment processing arm on its core platform and will continue to use PayPal to process at least 80 percent of its gross sales. If the sales volume processed by PayPal exceeds that threshold, PayPal will compensate eBay and vice versa, if eBay falls short of the 80 percent. At the same time, however, while PayPal will not be able to establish an online e-commerce marketplace, it is not proscribed from striking deals with eBay competitors. Potentially, then, PayPal could be available as a payment method on Amazon or Alibaba in the future.
Separately, PayPal finalized an announced agreement to acquire Israeli cybersecurity firm CyActive. As part of the acquisition, PayPal said it is opening a new security center in Israel, enabling the company to “take advantage of the country’s innovative technology and world-class talent, while also extending the capabilities we’ve developed through the success of our Fraud and Risk Detection Center in Tel Aviv.”