Two-thirds of eBay's registered accounts have not bid, bought or listed on eBay over the past 12 months, so why does eBay trot that total registered user number out in the press? It means absolutely nothing. Sure 248 million is much more impressive sounding than 83 million but when 2/3rds of that 248 million number haven't done anything on the site in the last 12 months it make the total number meaningless.
Well, eBay is following this same pattern with its PayPal numbers. In a recent article on alternative payment options; Cliff Hopkins, senior director, PayPal merchant services said, “When merchants offer PayPal on their sites, they allow 141 million customers around the world to shop with peace of mind because they don’t have to share their financial information online.” Wow, 141 million customers, that is amazing, is that "active customers" or total accounts? According to eBay's 10K filing, PayPal had 57.3 million "Active Accounts" which are defined as : All registered accounts that successfully sent or received at least one payment or payment reversal through the PayPal system within the previous 12-month period. Well, at least PayPal has 40% of their total accounts that are actually active, compared to eBay's 33%
Now, 57.3 million active PayPal accounts is a very impressive number, but certainly not as impressive as 141 million. So in the press and apparently in their sales pitch to merchants, PayPal uses the total user number. To an online merchant the only number that matters is "Active" customers.
To put PayPal's numbers in perspective, lets compare them to "Active Customer" accounts on Amazon. Since each "Active" Amazon account is also a payment account (Amazon facilitates all transactions on their platform).
- 57.3 million "Active" PayPal accounts (PayPal accounts grew 16 % Y/Y)
- 76 million "Active" Amazon customer accounts (Amazon accounts grew 19% Y/Y)
eBay's "Active" numbers are certainly impressive but they aren't world beating. Amazon has nearly as many customer accounts as eBay "Active Users" and more payment accounts than PayPal. So next time an eBay or PayPal executive gives you "the numbers" just divide it by 3 to get closer to reality.
Just my 12 %