EBay Spins Off PayPal Into Fast-Changing World Of Mobile Payments : All Tech Considered Commerce and payments are splitting up. Ebay is breaking away from PayPal and its payments operation will turn into a separate, publicly traded company.
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EBay Spins Off PayPal Into Fast-Changing World Of Mobile Payments

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EBay Spins Off PayPal Into Fast-Changing World Of Mobile Payments

EBay Spins Off PayPal Into Fast-Changing World Of Mobile Payments

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RACHEL MARTIN, HOST:

There's a breakup in the business world. Online sales giant eBay is splitting up with its payment operation PayPal. As NPR's Elise Hu reports, the spinoff may benefit PayPal in the long run.

ELISE HU, BYLINE: The whole process of making purchases with credit and debit cards is decades old and it can be cumbersome. So when PayPal came on the scene in the late 1990s, users adopted it fast.

BETSY PAGE SIGMAN: PayPal made it possible for people to pay on the Internet.

HU: Betsy Page Sigman is a business professor at Georgetown University.

SIGMAN: So they didn't have to bring out their cards and fill in all their card information every time they wanted to buy something on the Internet and that was particularly important for eBay because merchants and customers engage in a lot of transactions.

HU: Ebay purchased PayPal in 2002 and since then the two have enjoyed a marriage of commerce and payments. Earlier this year prominent investor Carl Icahn began pushing for the two to split up, so each could grow on its own. The company resisted for months, but by Tuesday eBay's CEO, John Donahoe, announced PayPal will soon become its own publicly traded company.

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JOHN DONAHOE: I think an independent PayPal unequivocally will have the focus and agility to play a cross the board in this fast moving payments space.

HU: Fast-moving is right several tech companies and startups are rushing to solve the elusive problem of how to simplify payments.

DONAHOE: And it's all about the wallet.

HU: PayPal faces a potential challenger in Apple Pay. It turns the iPhone into a mobile wallet that pays for stuff, by waving the phone at a cash register. Apple CEO Tim Cook announced the service earlier this month with a demo.

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UNIDENTIFIED WOMAN: Your total is $23.78.

TIM COOK: That's it.

HU: On a call with investors CEO Donohoe suggested PayPal is open to working with Apple Pay and other tech companies.

DONAHOE: The opportunity for strategic relationships I think has never been higher. There's payments companies, technology companies and some interesting combinations of how we can work together.

HU: But Donahoe won't have the last say. When PayPal splits from eBay next year, a veteran from American Express will be taking over as CEO. Elise Hu, NPR News.

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