eBay PayPal F

Last month, eBay announced that it was splitting up with PayPal after a 12 year union. PayPal will be turned into a new company in 2015. eBay President, John Donahoe stated that:

A thorough strategic review with our board shows that keeping eBay and PayPal together beyond 2015 clearly becomes less advantageous to each business strategically and competitively.

eBay PayPal 1

This move was obviously prompted by the fact that money is going mobile. Many competitor mobile payment systems already exist like Amazon, Square, Google and Apple now also joined the mobile money market with its new Apple Pay, available on the iPhone 6. Last month Alibaba, which runs a mobile payment branch called Alipay, went public and was valued at $230 billion!

Research firm, Garter, has estimated that mobile payments will rise from $235 billion in 2013 to a staggering $720 billion in 2017.

By breaking its ties with eBay, PayPal could become massive in its own right, instead of just being a subsidiary of an auction website.