October 10, 2005

eBay Buys Payment Business from Verisign

Verisign sold their online payments business to eBay for $370 million. Due to slowing growth and maturation of the U.S. online auction market, eBay is on a spending binge looking for new growth opportunities from Skype (VOIP), China, and now complementary additions to PayPal.

With Skype, credit card merchant payments, and PayPal, eBay is well on its way to become a internet-generation financial services company for small businesses. We wonder what is next on Meg's shopping list?

VeriSign's payment gateway business, which allows small businesses to accept credit card and other payment types online, processed more than $40 billion in customer transactions last year. eBay sees the service as a way to expand its own PayPal transactions division to a new category of small- and medium-size business customers.

The VeriSign service "perfectly complements PayPal's existing payment services," PayPal President Jeff Jordan said in a statement. "This acquisition allows PayPal to give our customers more choice in payment services and grow our merchant services business even more quickly."