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EBay Inc. confirmed on Monday that David Marcus, president of its PayPal Inc. unit, is leaving to take a job at social-network giant Facebook Inc. John Donahoe, chief executive of eBay, will run PayPal until a successor is found for Marcus, who will remain at PayPal until the end of the month, according to a statement posted by Donahoe.
Marcus brings to Facebook years of electronic-payments experience, particularly in mobile, that could benefit a sprawling company whose payments initiatives have seemed to come in fits and starts. Officially, Marcus will take up a position in charge of the company’s messaging products, according to Donohoe’s post.
A Facebook spokesman did not return a call from Digital Transactions News seeking comment. PayPal did not comment beyond Donahoe’s announcement.
The move may indicate that Marcus, who came to eBay in 2011 when it bought Zong Inc., his mobile-payments startup, sees more potential at Facebook than at PayPal, observers say. “PayPal is part of the former generation [in payments] rather than the current one,” says Steve Mott, principal at BetterBuyDesign, a Stamford, Conn.-based consultancy. “We forget PayPal is 15 years old. It’s a mature company.”
Also, the intimate links Facebook facilitates between individuals and between consumers and businesses could form the basis for a wider array of payments opportunities, Mott says. “Facebook has to prove its mettle [in payments],” he says, “but what they bring to the party is that transactors generally know each other. All you do with PayPal is payments. What you do with Facebook is interact.”
Facebook’s payments initiatives so far have had a mixed record. In 2009, it introduced Facebook Credits, a form of virtual currency for use on its network, and in 2011 it mandated third-party developers on its platform, such as games sellers, use the currency. Facebook, which took a 30% commission on each transaction, then abruptly discontinued Credits in June 2012.
A murkier development came to light early in 2011 when the company set up a subsidiary called Facebook Payments Inc., signaling broader ambitions in the business than industry watchers had imagined. Facebook at the time said the new unit was established to handle payments to developers related to its Credits program. Little about it has been disclosed since.
Since taking over as PayPal’s president in March 2012, Marcus has overseen a number of ambitious initiatives, including the e-commerce processor’s move into the physical point of sale. This strategy, which some acquirers have embraced but others have viewed with suspicion, includes the adoption of new technologies like Bluetooth low energy, a promising alternative to near-field communication (NFC) that links handset users with in-store payments and promotions systems.
Marcus also has not been shy about spending big money to acquire strategic assets for PayPal. His biggest deal was the $800 million acquisition last September of Chicago-based Braintree Payments Solutions LLC, a fast-growing technology provider and acquirer.
