Jun 6, 2011
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PayPal to end partnership with Alibaba

Jun 6, 2011

Jun 3 - EBay's online payment unit, PayPal, will end its year-old partnership with AliExpress, the wholesale website of Alibaba.com , from early August, PayPal said on Friday.

A man walks past an Alibaba.com Ltd. advertising billboard in Hong Kong (Photo: Corbis)

"PayPal remains deeply committed to China by providing Chinese merchants access to a safer and easier way to sell to millions of our users all over the world. And our business is strong," Dickson Seow, director of communications for PayPal Asia Pacific, said on PayPal's blog.

PayPal said its total payment volume in China was more than $4.4 billion in 2010, up 44 percent from a year ago.

Alibaba.com is a unit of Alibaba Group, which is about 40 percent owned by Yahoo Inc.

No reason was provided why both parties decided to end their partnership, but a document obtained by Reuters showed PayPal was unhappy with AliExpress's rising consumer business on the platform, which is meant for business transactions, and wanted to raise transaction fees for certain accounts.

"AliExpress is committed to serving our customers with choice in payment options," Sabrina Peng, vice president of Alibaba.com, said in a statement.

EBay competes with Alibaba.com and Alibaba Group's Taobao in China's e-commerce space.

(Reporting by Melanie Lee; Editing by Anshuman Daga)

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