• by Sean Hargrave , Staff Writer, October 1, 2014

It made every last bit of sense to incorporate the technology so people can pay for items without having to log in to a separate service on a different window -- but actually having the company within eBay's walls never quite struck me as a sensible idea.

The main reason became very clear when eBay suffered a hack attack, which it handled incredibly badly. People found out about the development on the news and were told by friend on Facebook to change their password long before eBay eventually got around to holding its hands up and emailing clients to suggest they change log in details. The two words, "horse" and "bolted," sprang immediately to mind.

Of course, PayPayl was unaffected -- but you can't help but wonder whether its brand image and the trust new customers might place in it was damaged. If you were signing up for an online wallet would you have opted for eBay's immediately after it was making headlines for all the wrong reasons?

Perhaps placing it within the corporate wall of eBay gave the payment mechanism respectability and helped it grow to a point where it overshadows its parent. I can't help but think this could have been achieved with the strap line "an eBay company," particularly as eBay accounts for around a third of the payments it process each day. Two in three of its payments are processed beyond its parent company, and that proportion is growing, so a spin-off makes sense.

So now, talk will turn to what will happen with PayPal when it's out on its own. Will it be bought? Well, there will certainly be those who wouldn't mind cashing in their investment. The spin-off is widely being seen as being prompted by at least one very powerful vocal shareholder who wanted the business to be independent, forging its own way in the digital payments world.

Suitors are already being discussed. When you're talking tech and an asking price that could reach tens of billions of dollars ($60bn has been plucked out of the air by some commentators), then you can bet Google's name will crop up. Alibaba, which has recently launched the world's largest tech company float in New York, has similarly been mentioned.

It's worth mentioning, however, that PayPal is mostly used online. Despite having an app on every platform, its desktop dominance is not carried over to mobile payments, so maybe there's a mobile brand out there waiting to snap up PayPal to launch an equivalent of Apple Pay?

If you're wondering why a mobile maker might not simply offer the app rather than feel obliged to own the company, you might well want to consider the commissions that Apple Pay will be charging on mobile payments which are soon set to top $100bn in the USA alone. 

As payments move from the desktop to the mobile there are a lot of 2 per cent payment commissions out there somebody is going to enjoy and it would make sense that a mobile maker wouldn't Apple have too huge a slice of the pie. 

So, while people are throwing names in to the ring, why not run with Google but also throw in Microsoft, or even Samsung?

Mind you, if it came to it and the asking price was really around the $60bn mark, that might too big a fish for anyone else to swallow, particularly when mobile payments are still at such as early state that you could probably take one per cent of that figure and have a very good basis to build and roll out a mobile payment platform of your own.

When PayPal is spun-off next year, it's going to be interesting to see if someone tries to swallow it up or whether it's simple too huge a whale to be landed.