PayPal Fuels eBay's Growth

eBay reported its third quarter earnings on Wednesday, October 17 after market close and the results came in just above Wall Street’s expectations.

The company announced net income of $597 million, up 22 percent from last year’s third quarter. Revenue grew 15 percent to $3.4 billion, mainly thanks to continued growth of eBay’s payments unit. PayPal revenue grew 23 percent and now accounts for more than 40 percent of eBay’s total revenue.

PayPal, eBay’s electronic payment system, is currently extended to physical stores and CEO John Donahoe expects the service to be available at 20 American retailers by the end of the year. The move is considered by many as another step in eBay’s metamorphosis to become a payments company first. In the past quarter, the total volume of payments conducted via PayPal was already more than twice as large as the total value of all merchandise sold on eBay’s marketplaces.