Ebay 2013 mobile payments $27 billion, says CEO

Ebay 2013 mobile payments $27 billion, says CEO
12 Feb 2014

Ebay 2013 mobile payments $27 billion, says CEO

Speaking at the 2014 Goldman Sachs Technology and Internet Conference, EBay CEO John Donahoe revealed that mobile payments to EBay merchants in 2013 totaled $27 billion. He said that mobile would be a huge concentration for the marketplace giant in 2014.

EBay’s primary competitive battlefields, according to Donahoe:

  • Mobile
  • Global expansion
  • Data
  • Omni-channel (expanding mobile capabilities into the physical world.)

“People want to use their mobile devices to shop and pay, and PayPal is our fastest-growing segment,” Donahoe said. “People are buying 14,000 cars each week via EBay mobile.”

The fastest-growing segment of the mobile EBay world is the mobile-enabled experience, what Donahoe called “using mobile to do something in the physical work you didn’t do before with your phone.” He described ordering ahead to skip the line at restaurants, and paying for your dining tab from your phone at your dining table as advantageous and growing in importance to consumers. He also talked about the importance of a consumer walking into a merchant’s store and that merchant being able to push a coupon to the customer before she reaches the checkout line.

‘Then you can pay with your phone – almost like ‘put it on my tab’ – and you get a text saying you paid,” Donahoe said. “We’re trying to add value to both consumer and merchant.”

While this might seem a strange method for the CEO of an online marketplace to be enthused about, Donahoe realizes that consumers are increasingly adopting the ship-to-store shopping method of ordering online and going to the store to pick it up.

” We think consumers want a choice to  have the item shipped home, or to reserve it online and go try it on or test it in the store, or buy online and pick it up at the store, or buy it online and have it delivered to me today. I think same day delivery will remain a piece of our services.”

Donahoe urged one bit of caution for those who have money and no time, as they think about this trend:

” The bulk of consumers have more time than money and want to search for value or they like shopping. It’s entertainment. Going to the mall or shopping online is something they enjoy, and so convenience is one of the factors but not the only factor. The biggest part of the market likes shopping and is looking for value and that’s the core Ebay consumer.”

EBay’s same-day delivery service is now in five cities and will expand, Donahoe said, though it must rely on local delivery contractors to help with that. It’s a small part of its revenue, however.  Roughly 20 percent of both EBay and PayPal business comes from cross-border sales – i.e. overseas transactions. Pitney Bowes is handling the shipping and returns, to alleviate what is a big stumbling block for merchants.

Donahoe believes that EBay has distinct advantages in the marketplace, especially thanks to PayPal, which makes its money-back guarantee possible.

“We define payments as a closed-loop transaction between buyer and seller and we guarantee protection at both ends. We have 2,000-4,000 people working on risk, and another 3,000-5,000 doing customer support. We take full accountability for both sides of the transaction and the risk. I don’t think that’s a business most want to get into.”

PayPal’s acquisition of Braintree alleviates some of eBay’s worry about competitors, and Donahoe expects to expand its use globally.

“Braintree is the leading payment provider for third party developers, particularly with mobile,” said Donahoe. ” Our apps have Braintree or Paypal in them. … We make it easy for app developers to bring them into the app, and we will continue to do that. The apps that create conversion are the apps that will win.”

International expansion is a big focus for EBay, and is only hampered by PayPal penetration. PayPal is the means by which EBay is able to offer buyer protection / guarantee.

While digital currency such as Bitcoin is not top of mind at EBay they’re not discounting it either, and have studied the trend in the past.

“We’re going to be looking at that over time and when we think it can add value we’ll incorporate that,” Donahoe said.







Sharon Hill

Sharon Hill has been a senior writer / analyst with the AIM Group since 2004, except for a two-year time-out to serve as sales and marketing manager for Suburban Newspapers of America. She worked at newspapers in California, the Carolinas and Indiana as a classified advertising sales supervisor and manager, and in newspaper circulation in Alaska. At the SNA, she was responsible for bringing in new members; lining up exhibitors, and helping develop programs for the classified conference and the classified alliance. She is also co-author of “Implementing and Managing Telework: A Guide for those who make it Happen” (Praeger Press) and a prolific blogger and social media user. She is based in Phoenix.