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eBay to launch PayPal Europe service

Online auctioneer eBay Inc. began alerting customers this week it would launch a European business unit for its PayPal service, aiming to boost an overseas operation crucial to the firm's top-line growth.
/ Source: Reuters

Online auctioneer eBay Inc. began alerting customers this week it would launch a European business unit for its PayPal service, aiming to boost an overseas operation crucial to the firm's top-line growth. Over the past few days, the Silicon Valley-based firm has been notifying customers of its online payment service, via email, that it was setting up PayPal Europe Ltd., a firm based in the United Kingdom with a customer service center in Dublin.

"We anticipate that PayPal Europe Ltd. will begin operating in February 2004, subject to receiving authorization from the Financial Services Authority in the UK," the e-mail notice read.

A company spokeswoman on Friday had no further details. In November, eBay chief executive Meg Whitman told Reuters a Europe-wide PayPal service would roll out early in 2004.

EBay has become a highly profitable online auction house where buyers and sellers trade everything from rare coins to automobiles.

Since acquiring PayPal in 2002, the online payment service has become a preferred payment method for eBay traders in the U.S. The European PayPal unit will now likely become the de facto payment service for what has quickly become one of eBay's fastest growing regions.

At an analyst day in London in November, company officials told fund managers and sell-side analysts that eBay's international business, led by its UK and German units, was on course to attract almost twice as many customers as the U.S. in the next few years.

EBay's German and UK business units alone contributed third quarter sales of $116 million, or nearly 22 percent of the company's top line.

In Europe, the PayPal service has been available only to UK customers as of last year.

Rival Yahoo announced last month it would launch an international payment system called PayDirect International to make its first major push into the growing business segment.