“We believe the pending spin-off of PayPal will help to unlock shareholder value as investors are able to value each business,” BMO Capital Markets analysts wrote in a note.
Ok, so analysts (and investors such as Carl Icahn) like EBay’s plan to spin-off Paypal into a separate business. But what does it mean for merchants? A better Paypal?
It’s clear that the split can free up PayPal to build partnerships with other e-commerce platforms. This could be a boon for merchants as for so long Paypal has been locked in step with it’s parent company to the detriment of consumers.
I think also, Paypal has for too long relied on it’s original technology platform. The argument that “if it ain’t broke dont fix it” has held true; Paypal is the key driver of the Ebay business and they’ve been reticent to mess with it.
Nevertheless, Paypal needs to evolve to beat the likes of Square, Apple Payments etc in the mobile space. They opportunity is obvious; become the defacto mobile payment system and potentially, the coveted credit card replacement app. Off course, their own merchant partners Visa and so-on will have something to say about this.
So, when will we know? As Ebay state themselves, it looks like we’ll have to wait until 2015 to find out.