After Paypal, it's eBay's turn to turn more towards the cryptocurrency market. According to the company's CEO, Jamie Iannone, the aim is to expand the giant's cryptocurrency activities. In an interview with CNBC on 3 May, the CEO also added that NFTs will also be sold on this online market giant.
However, rumours have been circulating for several years about this major change in eBay's business. After repeated denials, we are now witnessing an unprecedented turn of events. Find out all about the implications of this decision and eBay's approach to the crypto market.
The major e-commerce platform
EBay is an American e-commerce site founded in 1995 by Frenchman Pierre Omidyar. Today, the company has become one of the world's leading online retailers. After years of success, eBay needs to reinvent itself and keep up with the times. However, its interest in crypto is not new and is growing.
Cryptocurrencies are now a way for many companies to win the loyalty of new customers, but also to diversify their activities. What's more, the price of cryptocurrencies has been more than positive and encouraging for users and investors recently. So this innovation by eBay could well benefit the big company in the long term.
eBay and crypto, an old story…
The company has been expressing a keen interest in crypto and its extensions since 2012. That same year, in June, the American online marketplace filed a patent to launch its own currency. The US authorities approved the project in 2013, and according to its creators, the aim was to "make gifts in the form of secure tokens". These tokens will subsequently be used on the Paypal platform, which is also a subsidiary of eBay.
Throughout 2014, the project's design team stated its desire to introduce Bitcoin to the platform. However, the project never got off the ground, leaving crypto investors and users baffled. Even though the addition of Bitcoin never materialised, eBay didn't stop there.
In 2014, the company opened a category called "virtual currency". This option allows customers to buy mining equipment, benefit from wallets and obtain collector coins. These decisions clearly confirm eBay's strong desire to diversify its activities in the cryptocurrency sector. Customers will also be able to buy and sell bitcoin and altcoins (all other cryptocurrencies) immediately on the platform.
Paying in bitcoin using gift cards
eBay gift card paid for in Bitcoin
It was therefore possible at the time (and still is today) to pay in Bitcoin. This is possible thanks to multiple gift cards. Several gift card suppliers began working with eBay to enable these purchases to be made. They include Bitrefill, eGifter and Paxful. Some of these suppliers offer to buy their gift cards directly on their sites, offering a range of cryptocurrencies.
For example, Bitrefill offers Lightning, Dash, Dogecoin, Litecoin or Ethereum, and of course Bitcoin. Others, however, only accept Bitcoin. Certain terms and conditions may hold back customers on an international scale. For example, the creation of an account and the delivery address for gift cards only need to be located in the United States for some of the suppliers. Everything could be different when purchases on eBay can be paid for directly in cryptocurrencies and no longer via gift cards.
Where do things stand today?
Since 2014, a number of rumours have been circulating about the US market giant offering crypto-currencies as a means of payment. A partner of the Ethereum Enterprise Alliance since June 2018, eBay has been denying these rumours for a very long time. Today the veil has been lifted, with the CEO confirming the possibility of paying for customer transactions and purchases using crypto.
At present, we do not know the exact timetable. Nor have we been told which cryptocurrencies will be accepted for purchases by the 185 million customers worldwide. We have not yet been informed of how transactions will be processed. In particular, the transaction fees incurred by users and customers. These terms and conditions, which have yet to be announced, could well disrupt the activities of other sales platforms, if eBay's are more attractive.
What about selling NFTs on eBay?
Apart from the crypto-currencies that are well known to the general public, NFTs will be available directly on the site. This is a new project that the major company intends to launch. This operation should see the light of day after crypto payments are launched. An NFT literally stands for non-fungible tokens. This token is unique and irreplaceable, so it is quite different from other tokens. Other tokens are called utility tokens, such as Bitcoin, which is fungible by definition.
NFTs are becoming increasingly popular with investors and collectors. NFTs have the advantage of being a kind of title authenticating the ownership of a sold good. EBay has therefore made an excellent decision to include NFTs on their site. This means that multiple NFTs can be sold on the site.
It remains to be seen how transactions and sales will be insured and protected. The fact that NFTs are immutable makes them fragile and delicate. EBay must therefore do everything in its power to guarantee maximum security for its customers. EBay will also have to face up to competition from many other platforms and companies that have already started selling NFTs. It should be noted, however, that some NFT sales have already taken place on the platform. According to the company's CEO, eBay has already started selling NFTs, but they are still very modest and difficult for the general public to access.
