With its auction business struggling, eBay is turning to its Paypal arm for salvation. According to an BusinessWeek article, the company plans to use its annual shareholder meeting on Wednesday to focus on its plans for its payment arm.
New eBay CEO John Donohoe has already said that he believes PayPal will overtake its auction revenues in the not-too-distant future. That wouldn’t be hard to believe either: even with PayPal’s popularity as an online payment medium, here in the US where it used the most, only 12 percent of all online payments are processed through the service.
Obviously PayPal has a lot of room to grow. So how is eBay going to do it? By going after those companies and organizations that use online payments everyday. Charities and organizations rely on a lot of online donations, and some government services allow for online payments of taxes, bills, and fines. Both could easily integrate PayPal into their offerings.
In addition, the service plans to offer an SDK of sorts to encourage developers of e-commerce apps to fully integrate paypal into their offerings, such as Apple has within iTunes. This could also increase the company’s share of online payments.
With people moving away from credit cards with the recession, using services like PayPal may make sense. Like the BusinessWeek article infers, people only want to spend the money they have. Expanding at a time like this could pay dividends later as people get used to using the service regularly.