eBay’s successful bid to acquire alternative online payment vendor Bill Me Later for $820 million, plus $125 million of outstanding options, promises major ramifications across both the online and physical payments space.

To begin with are the integration efforts that will bring together Bill Me Later’s on-the-spot, merchant-based credit service together with eBay’s dominant PayPal platform. PayPal had been offering a rival financing Pay Later service which analyst say had not garnered the cache of Bill Me Later’s alternative to credit cards, despite PayPal’s large overall advantage in online transaction volume. Maryland-based Bill Me Later was aimed at large merchants, so the PayPal connection could bring the popular service down market to less-traveled sites. For PayPal, this is about “consolidating the alternative payment space, and reaching for that strength in merchant relationships both of them have,” says Javelin senior analyst Bruce Cundiff. That includes the bricks-and-mortar space where Bill Me Later was piloting an in-store PayCapture service at undisclosed retailers.

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