The online marketplace says the move will benefit both sellers and buyers.
EBay is to drop PayPal as its main payments processor in a move that it says will benefit sellers and buyers.
People buying items on eBay will be able to pay without leaving its website, and sellers will have lower processing costs, the online giant said in a blog post .
EBay has signed an agreement with Dutch firm Adyen to process payments, but buyers will still be able to use PayPal on the site until at least 2020.
PayPal was spun off from eBay in 2015.
Shares in PayPal were down 7% in pre-market trading in the US.
EBay said it wanted to complete the move as quickly as possible within the terms of its deal with PayPal, which runs until mid-2020.
The e-commerce company said that the operating agreement with PayPal „has not been extended and it will not be extended.“
Amsterdam-based firm Adyen has a number of high-profile clients, including Uber, Netflix, and Easyjet.
The firm is growing quickly. In 2013, it processed $14bn-worth of transactions, but that figure had grown to $50bn in 2015.
Bloomberg has reported that the company could list its shares on the stock market this year.
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