How eBay reduces fraud and risk with a global payment partner

As online marketplaces continue to transform the global economy, eBay still sets a gold standard for ecommerce. And that’s no easy feat.

Running an ecommerce platform and marketplace is a complex undertaking. Money comes in and out while new buyers and sellers need to be constantly vetted. All of this happens at scale. For a platform as widely used and renowned as eBay, this is especially true. eBay operates in 190 countries with 159 million users — and they expect to keep growing.

eBay and Adyen work together to stay efficient in a landscape of competition that shifts on an almost quarterly basis. When their strategic partnership began in 2018, 18+ million sellers and $80 billion in transactions were transitioned to Adyen in over 18 months. eBay’s 26 years of insights into the world of small and medium businesses (SMB) helped streamline this process considerably.

A roundtable discussion recently hosted by members of the Business Executive Council shined a spotlight on eBay’s partnership with Adyen. Steve Priest, eBay’s Chief Financial Officer, and Blake Breathitt, Global Lead for Platforms and Financial Services for Adyen, openly discussed the benefits of their ongoing collaboration.

“You aren’t just integrating payments. You’re integrating trust,” said Gary Thompson, GM, Community and Experiences for the Executive Council during the event.

With that statement in mind, how does Adyen integrate both payments and trust to support eBay’s global strategy and manage transactions?

To put it simply: eBay works with Adyen — which accepts regional, global, and local payment methods — to meet the demand of processing high volumes in cash flow.

Adyen’s platform allows eBay to embed payments into their offering to deliver a unified commerce experience across different channels, continents, and customers. It also simplifies how eBay onboards new users, accepts payments, splits funds, and gives payouts to its sellers with speed and accuracy.

As online payment volumes increase, so does fraud and risk. Adyen identifies three aspects of risk that a global marketplace like eBay can encounter on a regular basis. These include:

• Transactional risk. Typically, this centers around behavior like buyer fraud that goes against business policies and scheme regulations.

• Onboarding risk. This risk involves making sure merchants of all sizes are familiar with the details of KYC (Know Your Customer) compliance, and providing automated bank account verification to reduce payout failures.

• Payout risk. Directly affecting sellers, this type of risk highlights top fraud rings, recognizing scams, and flagging buyer and seller collusion by monitoring transaction behavior and other KYC data.

Adyen solves for each of these risks in an efficient, scalable way — without a team of countless people. Overall, investing in AI and machine learning are essential in their efforts to mitigate risk.

The symbiotic relationship between eBay and Adyen was further emphasized when Priest reflected on the scope of what the transition to Adyen helped accomplish. Strong strategic partnerships are mutually beneficial, and Breathitt pointed out 26 years of experience working with SMBs was immensely helpful.

Keeping an innovation-first mindset is key when processing billions of dollars in payments and maintaining the associated gross merchandise volume simultaneously.

Breathitt highlighted this balancing act and the critical data issues with respect to payments, whether it be the importance of PCI compliance, GDPR, or transparency of data sharing and network signals for fraud.

eBay must let the “good stuff through”, ensuring bad actors can’t defraud sellers or the company at large. Bad actors attack the payment volumes and the massive amounts of data being collected.

To overcome such challenges, Adyen innovates on different fronts. This includes payments fraud mitigation, seller fraud mitigation, payment optimization, and performance monitoring.

Over the past three years, eBay has transformed its business to become the most powerful selling platform online. Building out their payments capabilities is a key component of eBay’s strategy, driving significant benefits and efficiencies for its buyers and sellers on a global scale.

Innovation comes in many forms, and that’s what remains at the heart of the multi-year strategic partnership between eBay and Adyen.

“The more you innovate, the more exciting it is to work for the company,” Priest said. “And as a result, you attract better talent, thus enabling more innovation.” Facilitating commerce and driving economic value for buyers, sellers and eBay itself is a top priority for Adyen.

The relationship between eBay and Adyen continues to be a prime example of how to create change through collaboration, establishing trust between buyers and sellers around the world.