Ebay benefits from increased use of PayPal for transactions

ONLINE shopping giant eBay last night announced a strong rise in quarterly revenue, largely thanks a strong performance by money transfer service PayPal.

Although eBay is best known for its online auction site, almost half of the company’s revenue now comes from its PayPal division which has 137m active registered users.

Many third party companies now offer the option of paying for goods by PayPal rather than credit card, enabling consumers to avoid the need to enter their card details on multiple occasions.

“We delivered strong third quarter results, with mobile driving a significant portion of our new user growth and continuing to transform how consumers shop and pay around the world,” said eBay chief executive John Donahoe.

Total revenue across all sectors increased by 14 per cent to $3.9bn (£2.45bn) for the period, with new profits up to $689m.

Despite the strong performance, shares in eBay fell five per cent last night after the company warned that it expected tough trading in the run up to Christmas.

It has also agreed to spend $800m buying upstart payments service Braintree, in a deal that is due to complete within months.