Ebay Is Joining the NFT and Crypto Party. But Should It?

In addition to being able to buy and sell NFTs on eBay, users may soon be able to use crypto for transactions on the platform. In this Motley Fool Live segment from “The Virtual Opportunities Show,” recorded on March 1, Fool contributors Rachel Warren, Travis Hoium, Demitri Kalogeropoulos, and Jose Najarro discuss why this could be a strong move for the company to attract its target demographic. 

Rachel Warren: This was really interesting and unexpected, I think. I guess I shouldn’t be surprised because we are seeing a lot of movement in the direction of a lot of companies you might not associate with being really friendly toward crypto and NFTs. But eBay, so there was an interesting article on thestreet.com and it was saying eBay might take crypto payments and that it already accepts NFTs, which I’ll get to in a second. In a phone interview with thestreet.com, the head of eBay was saying, basically they really want to be targeting as a marketplace for Gen Z and millennial consumers, specifically, which I thought was really interesting. The CEO said, “We’re just completing our transition to managed payments, where we are now managing $85 billion of volume on our platform directly.” This is the CEO, Jamie Iannone, he told the Street this, he said, “This gives us the ability to open up new forms of payment.” According to this report, they are studying the possibility of adding cryptocurrencies as a possible means of payment. The firm could make an announcement on March 10th during its day dedicated to investors, he told The Street.

I don’t know, it’s interesting because they obviously don’t currently accept cryptocurrency as a form of payment on the platform. But again, if they’re specifically targeting this consumer base of Gen Z users and millennials, it makes sense that they are trying to expand into these areas where maybe wouldn’t automatically think eBay would expand to. One thing I did not realize was that eBay had already stepped into the NFT space. One of the things he noted in this interview with The Street, he said, “We did change our policies last year so that you could trade NFT on the platform. Essentially know eBay is a place for people who have something to sell and people who have something by showing up. Even without announcing anything or doing anything, people started trading NFTs on the platform,” he told The Street.

Again, I had no clue that people were buying and selling NFTs on eBay. Again, completely blew my mind, so I almost feel like that’s maybe almost bigger news and that they might been expecting crypto as a form of payment. But something to watch and given that their Investor Day is just what is that about nine days away from now, we could be getting a much larger and more detailed announcement. But the story on The Street has got quite a bit of attention in the fact that you might be able to buy and sell things using crypto in addition to already being able to buy and sell NFTs. That seems like a really strong move to attract that demographic they’re trying to, so really interesting.

Travis Hoium: It’ll be really interesting to see if they’re like a legacy company like this, is able to move into some of these new markets. As I follow-up crypto and NFTs more specifically, it’s been interesting to see who is trying to move into this market, and there’s some that makes sense and there’s some, it’s like, what are we doing? [laughs] This one seems a little bit like a stretch. If now I still think of eBay as, I’m in my late 30s, I’m at the lower age range of people who like eBay was the coolest thing ever. As we have OpenSea and Magic Eden and these NFT native platforms. That’s where they are ultimately competing with, and I have a hard time seeing how they’re going to move projects that are growing in those platforms to a legacy platform like eBay.

Cryptocurrency is a little bit different because I see that more as like just a transaction medium and it doesn’t have to be. I could say, hey, I need US dollars, but you want to pay me in a cryptocurrency. Then behind the scenes that I will just like the back legwork of the transaction happens. I can see that taking place. But so that’s an interesting move, at least for the usage of cryptocurrency. I don’t know what your thoughts are, Jose.

Demitri Kalogeropoulos: I know eBay’s payments and their advertising are two of the only areas that are growing at the moment because they’ve got so much merchandise volume through the pandemic and now they’re having a growth hangover from that. I know the stock dropped, I think it was last week, I think they reported their earnings. Interestingly enough, it was a little bit different than, I think Rachel follows Etsy a bit which that stock was that they had some better numbers in terms of growth, more buyers are moving to the Etsy platform. This could be one way that eBay is trying to get more people back on there if they can make it a more attractive program for sellers, it seems like they’re trying to entice buyers back on in that way, but it’s a little bit of a tough battle there.

Rachel Warren: I’m of the mind that any of these companies that have that digital first aspect. I think that they can enter this space with NFTs and crypto a little bit more easily than perhaps some others. But it will be interesting to see. I guess this whole NFT thing with people trading on eBay, wasn’t super well-known because The Street article noted that there wasn’t really any big announcement that they made. It almost sounded as if people recognized the ability to do that on the platform and just started doing it. I would doubt it’s anywhere close to the volume you’re seeing on some of these specific platforms like OpenSea, for example, that are designed to be a place that’s a marketplace for NFTs.

But I do think one thing you might be seeing more, and I’m always like a little bit crypto-skeptic, like I like it but I’m just not totally sure what I think. I think companies that maybe in the future don’t accept crypto as a form of payment, maybe they’ll be getting left a little bit behind, so maybe they are trying to be ahead of the curve, but it will be interesting to see.

Jose Najarro: Yeah, definitely I agree there with all these points, especially Travis. There are certain companies that are getting into the space that, hey, it makes sense, and there’s other companies that don’t make sense. For eBay, I think being a e-commerce store in theory it makes sense. You’re a e-commerce platform, you want to bring new people. But the last time I purchased something on eBay, I think it was a year ago and it’s usually something that’s used or some form of collectible, my uncle, he is like a huge airplane fighter collector, the models, and I don’t think he would ever use a crypto way to purchase that product.

Crypto has definitely seen better adoption in the younger generation; Gen Next, Gen Z, or whatever they were called. But I think maybe like Etsy, one that Rachel follows, Etsy for sure that would make more sense because I feel that generation of consumers already there and they are heavily adopted with this market. Definitely pretty interesting. I definitely want to read more about how they are doing the NFT trading and how they are able to keep track of that. But that’s probably something I’ll dig a little bit deeper later on.

Travis Hoium: Yeah. I was trying to look at that as you were talking because in a traditional NFT market, it’s a smart contract. You say, I will give you some cryptocurrency and you give me the NFT but the transaction happens immediately. Any royalty or anything like that, that happens automatically on the platform. If you’re not paying with cryptocurrency, I don’t know how you would do that with an NFT.

Rachel Warren: Well, there are some companies I know that will let you do actual cash, for example, I’m trying to remember if it’s Nifty Gateway is one NFT platform. It’s either Nifty Gateway, or Foundation clearly even researching about this slightly because I’m into it, but you can pay for NFT using a debit or credit cards or maybe that’s was an option.

Travis Hoium: Yeah. In a lot of those, what they end up doing is they take your cash from your credit card or debit card and they turn it into cryptocurrency and then they make the transaction. I’m just looking on eBay right now and that doesn’t appear to be what’s happening, but I’m not sure.

Rachel Warren: Weird. [laughs]

Travis Hoium: Yeah [laughs]. Just thinking back on what you guys are saying though. I agree, this makes more sense than like Walmart in the metaverse. [laughs]

Rachel Warren: I’m still wanting to see what are they going to be doing. Actually, I’m fascinated. But we’ll see.