A Growing PayPal Could Soon Overshadow Parent EBay

RACHEL METZ

SAN FRANCISCO (AP) — Most people know eBay Inc. for its online marketplace, where deals abound on everything from gadgets to antique furniture. But soon, eBay's biggest business will likely be PayPal, the online payments service that has been growing steadily even as the economy has stumbled.

EBay has spent much of the past two years trying to improve its faltering marketplace business, hoping to increase buyers' trust and clean up the look of its Web site. In the meantime, PayPal has thrived as more consumers and merchants use it to send money online.

Its growth is expected to continue in spite of competition from Amazon.com Inc. and Google Inc., which have services that online retailers sometimes offer alongside PayPal.

PayPal bills itself as a shopper's online wallet. Users set up accounts and link them to bank accounts and credit cards, making it easy to transfer cash into the account. Then users can make payments through PayPal using either their cash balances or the underlying credit card. PayPal users can also send cash to someone based on as little information as an e-mail address or cell phone number.