Sunday, October 9, 2005

eBay and VeriSign Form Strategic Alliance for Online Commerce and Security

PayPal, an eBay company, will acquire VeriSign's payment gateway business for approximately $370 million.

VeriSign will also provide eBay and PayPal with a suite of security services that includes the deployment of two-factor authentication, a security system that gives customers a one-time password or digital certificate to help protect against online identity theft.

VeriSign's payment gateway processed more than $40 billion in total payment volume in 2004. PayPal is seeking to accelerate its merchant services business by expanding its customer base to tens of thousands of new small and medium-sized business customers online. The payment gateway is a real-time, scalable Internet payment platform that allows merchants to authorize, process and manage online payments. The combination of VeriSign's payments gateway with PayPal's existing services will provide merchants with multiple processing choices from a single provider, including VeriSign's gateway, PayPal's Website Payments Standard, Express Checkout or Website Payments Pro.

  • Last month, eBay agreed to acquire Luxembourg-based Skype Technologies for approximately $2.6 billion in up-front cash and eBay stock, plus potential performance-based consideration. eBay said the acquisition would strengthen its global marketplace and payments platform, while opening several new lines of business and creating significant new monetization opportunities for the company. For example, in addition to eBay's current transaction-based fees, ecommerce communications could be monetized on a pay-per-call basis through Skype. Pay-per-call communications opens up new categories of ecommerce, especially for those sectors that depend on a lead-generation model such as personal and business services, travel, new cars, and real estate. eBay's other shopping websites --,, and Kijiji - can also benefit from the integration of Skype.

See also