eBay Inc. announced it will separate Paypal and eBay into individual publicly traded companies. The separation is set to take place sometime in 2015.
The separation is “timely” in consideration of the rapidly growing mobile commerce and payments industry. The mobile payments market is expected to double over the next few years to roughly $700 billion in transactions.
Paypal has performed well over the past year, with payment volume increasing 29% ($55 billion) since the quarter ending June 2013. The challenge to continue this profitable growth doesn’t get easier however, and Paypal needs to focus it efforts to continue in its market leading position.
Paypal was founded in December 1998, but faces a growing market of competitors, including Apple Pay, Softcard, Alibaba and others. It also needs to address improvements in its own interface and to add functionality to afford users more utility in the way they make transactions.
Paypal’s new president Dan Schulman, a former American Express executive who has experience in the mobile payments industry, has a big challenge ahead if Paypal is to once again become the “disruptor” of the payments industry.