PayPal to end partnership with Alibaba

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.

"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 USD 4.4 billion in 2010, up 44% from a year ago.

Alibaba.com is a unit of Alibaba Group, which is about 40% 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.