eBay and Alibaba in talks to bring PayPal to AliExpress?

alibabaeBay is in talks with Alibaba to get PayPal offered as a payment option on the new AliExpress wholesale marketplace, according to rumours appearing in the WSJ.

The two companies have long been rivals, but an alliance could now make sense. Insiders say that merchants, particularly in the US, are unhappy with using Alibaba’s own payment system Alipay, and are demanding the facility to use PayPal. For PayPal, Alibaba could offer the potential for huge expansion in the Chinese market.

Alibaba’s PR department has said that the company will decide whether to adopt other payment tools based on user demands. Merchants outside China are likely to favour PayPal over many alternatives: Alipay is unfamiliar, and bank transfers to China are expensive and the costs are borne by buyers. PayPal, on the other hand, offers the cashflow-speeding possibility of spending your earnings directly on new stock, something that newer and smaller traders value intensely.