EBay has announced that it is ending its relationship with PayPal and will instead use Adyen as its primary payments provider.

PayPal's share price fell more than 11% in after-hours trading following the announcement. EBay acquired PayPal for US$1.5 billion in 2002 and then spun off PayPal in 2015 for close to US$50 billion. It is now worth over US$100 billion.

EBay said the benefits of the changes would be lower costs for sellers and more payment options for buyers.

The shift will start gradually in North America later this year and eBay expects most marketplace customers around the world to be using the new system in 2021.

PayPal spokeswoman Amanda Miller said the company will "continue to provide a comprehensive payments solution to eBay through July 2020." It will also remain a payment option at checkout for eBay customers until July 2023.

While PayPal's business with eBay is still growing - up 10% in Q4 2017 - eBay only accounts for 13% of payments processed, down from 16% in the same period a year earlier.

Based in Amsterdam, Adyen already serves more than 4,500 businesses, including 8 of the 10 largest U.S. Internet companies. In 2016, Adyen increased transaction volume 80% year-over-year, to $90 billion.

Refer Finextra and CNN Tech.

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