It already has PayPal and now eBay is adding the Bill Me Later service to its online payment portfolio after acquiring the company for $820 million in cash and $125 million in options.
The two services fill distinct niches. PayPal is focused on handling transactions for small businesses and individuals while Bill Me Later works with major online merchants giving consumers a payment option other than credit or debit cards.
"PayPal and Bill Me Later belong together," said John Donahoe, eBay Inc.'s president and chief executive officer, in a press release. "We now have a powerful combination of the two leading, complementary online payment products, each with proven benefits for consumers and online merchants."
"This deal makes perfect sense," said Bruce Cundiff, director of payments research and consulting for Javelin Strategy & Research. "Bill Me Later has adoption among the most popular large merchants on the web, and PayPal is the way that many small merchants and eBay sellers accept payments online. Together, they can extend the presence of the two brands and offer even more choice for consumers when they shop online."
Discussion Questions: What do you think of eBay's purchase of Bill Me Later? With consumer credit tightening, is this a good or bad time to emphasize the service? Will Bill Me Later face challenges with online merchants because of its affiliation with eBay?