How Ebay Plans To Quickly Improve On Paypal's Bottom Line
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The article "How EBay Plans to Quickly Improve on PayPal's Bottom Line" is about auctions, it was released by Johnn Parker.
Recently eBay announced plans to buy VeriSign’s payment processing business for $370 million and merge the processor with PayPal’s operations.
PayPal is already the largest online payemnt company; however, VeriSign’s processor would make for a profitable asset, by enabling PayPal to compete with credit card companies known for raising retailer fees. The merge will also help take PayPal beyond its core auction-based business to now tackle small and medium-sized businesses.VeriSign’s payment gateway software creates a direct connection between web busiensses and payment processors.
These proecssors are generally run by major banks, therefore cutting out the credit card business. The addition is expected to add $100 million to PayPal’s top line in 2006.As part of the deal, eBay will also purchase up to 1 million VeriSign security tokens.
Each token has contsantly changing numbers that need to coincide with a synchronized central server. These tokens can be embedded in copmuters and other devices that along with a password, create a two-factor authentication system.Security has always been a costly issue for PayPal as they require a large team to deal with fraud.This merger is a huge step forward for PayPal. This shift will allow PayPal to process a greater number of transactions through banks rather than credit cards and work with more businseses than individual sellers. This in turn will lead to less credit card fees and potentially a lesser percentage of fraudulent sellers by working with registered business owners.This article is sponsored and published by ebaypaypalblog.Com.
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How EBay Plans to Quickly Improve on PayPal's Bottom Line
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