eBay, Inc. has just announced plans to spin-off their payment processing unit, PayPal a giant in its industry. The Board of Directors for eBay, cited maximizing “strategic focus and flexibility” as the underlying reasons for the split. Despite the break, eBay and PayPal have announced plans to preserve their relationship with each other through “arms-length operating agreements.”
The seperation of the two companies will be framed as a tax-free spin off of Paypal from eBay, Inc. Effective immediately, Dan Schulman, who was formerly the president of American Express’s Enterprise Growth Group, will be stepping in as the head of Paypal.
CEO of eBay, Inc., John Donahue, speaking of the separation, said, “eBay and PayPal will be sharper and stronger, and more focused and competitive as leading, standalone companies in their respective markets.” No mention was given to what exactly the newly formed Paypal company would be focusing its attention on, but with PayPal’s growing interest and implementation of Bitcoin and other major cryptocurrencies it is very possible that this split could result in a more timely implementation of cryptocurrency merchant services for PayPal than would have been possible while still under eBay’s wing.