SecProbe.io

March 27, 2015

Daniel H. Schulman
President
PayPal Holdings, Inc.
2211 North First Street
San Jose, California 95131

John J. Donahoe
Chief Executive Officer
eBay Inc.
2065 Hamilton Avenue
San Jose, California 95125

Re: PayPal Holdings, Inc.
 Form 10-12B
Filed February 25, 2015
File No. 001 -36859
eBay Inc.
Form 10 -K for Fiscal Year Ended December 31, 2014
Filed February 6, 2015
File No. 000 -24821

Dear M essrs. Schulman  and Donahoe :

We have reviewed your filing s and have the following comments.  In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.

Please respond to these comments  within ten busine ss days by providing the requested
information or advis e us as soon as possible when you will respond.  If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.

After reviewing your response and any amendment you may file in response to these
comments , we may have  additional comments.

Daniel H. Schulman
PayPal Holdings, Inc.
John J. Donahoe
eBay Inc.
March 27, 2015
Page 2

 PayPal Holdings, Inc. Form 10 -12(g)

Information Statement Summary, page 7

1. We note your disclosure in this section that 2014 TPV was approximately $235 billion.
However, we also note your disclosure on pa ge 6 of eBay Inc.’s 2014 Form 10 -K report
that TPV for the payments segment was $227.9 billion.  Please reconcile these amounts.

2. You make several references to the number of markets you serve, such as  in the first
sentence of the second paragraph under th is sub-heading.  Please revise to define  the term
“market.”

Summary Historical and Unaudited Pro Forma Condensed Combined Financial Data, page 13

3. When the information is available, please revise to disclose pro forma earnings per share
for the most recent annual period and any subsequent interim period as we believe this is
an important metric for your investors.  In doing so, please provide a footnote explaining
why you do not present earnings per share for the historical periods.

Selected Historic al Combined Financial Data of PayPal, page 49

4. If the pro forma balances for the items presented in this table differ significantly from the
related historical balances, please consider presenting such pro forma data alongside the
historical selected finan cial data to better highlight differences between the registrant and
the predecessor.  At a minimum, please present pro forma earnings per share and provide
a footnote explaining why you do not present earnings per share for the historical periods
as we be lieve this is an important metric for your investors.

Unaudited Pro Forma Condensed Combined Financial Statements, page 50

5. While you have not yet populated amounts within your pro forma financial statements,
we are issuing the following comments based on  our assumption that the current form,
presentation and disclosure represents what you currently believe the ultimate
presentation will be.  Please advise to the extent our assumption is not appropriate.

6. We note your disclosure on page 78 that post separation you will no longer participate in
cash management and intercompany funding arrangements with eBay.  Please tell us how
you believe this change will be executed, whether the balances will be settled or  forgiven
as part of the termination and whether you believe it will be appropriate to make any
related adjustments to your pro forma financial statements.  In this regard, we note your
disclosure on page 94 under the heading “Settlement of Accounts Betwee n PayPal and
eBay.”

Daniel H. Schulman
PayPal Holdings, Inc.
John J. Donahoe
eBay Inc.
March 27, 2015
Page 3

7. Please tell us whether and how the amount of the anticipated cash contribution to PayPal
from eBay is or will be factually supportable, including whether it will be specified in
any of the agreements between PayPal and eBay that you wi ll file as exhibits to this Form
10.

8. When the information is available, please revise your disclosure to describe in additional
detail the nature and amounts of the items included in your pro forma adjustment for
“[t]he transfers of certain assets and lia bilities to PayPal from eBay…”  If multiple items
are included in this adjustment, please present the adjustments on a gross basis on the
face of the pro forma financial statements or in an accompanying footnote.

9. You disclose on page 50 that you expect to  incur costs to replace those services
previously provided by eBay as it relates to your operation as an independent public
company, but that due to the variability of the amount and timing of the incremental costs
you have not included them in the pro for ma transactions.  While presentation on the face
of the pro forma financial statements may not be appropriate, please disclose your
estimate of these costs in the narrative introduction or the footnotes to the pro forma
financial statements as we believe i t provides useful information to your investors.

10. Please confirm our assumption, if true, that your pro forma net income attributable to
PayPal will equate to  pro forma income from continuing operations before nonrecurring
charges or credits directly attri butable to the transaction.  Refer to Rule 11 -02(b)(5) of
Regulation S -X.

Notes to Unaudited Pro Forma Condensed Combined Financial Statements, page 53

11. Please revise your disclosure to describe the operating, transition and other agreements to
be entered  into by you and eBay as described in footnotes (a) and (b) in additional detail,
what the adjustments are and any assumptions made.  In this regard, the current
disclosure in these explanatory notes appears overly brief to achieve the objectives of
Articl e 11 of Regulation S -X.

Business

Overview, page 54

12. We note your disclosure that you acquired Braintree to “strengthen [y] our position in
mobile paymen ts,” and also acquired Venmo at such time.   Please provide further details
regarding the role of both Braintree  and Venmo  in your business.  In this regard, we note
your disclosure on page 72 you have devoted signif icant resources to mobile payments
between infrastructure upgrades and the Braintree acquisition, leading to a 22% increase

Daniel H. Schulman
PayPal Holdings, Inc.
John J. Donahoe
eBay Inc.
March 27, 2015
Page 4

 in product development costs.  Please enhance your discussion regarding this trend and
whether this type of spending is expected to continue, as well as any anticipated impact
on your financial condition and results of operation.

Revenue Sources, page 59

13. Please clarify whether you earn fees on transactions that are not included in TPV; for
example, on transactions that a re reversed.  Please also provide further details about the
percentage of transactions enabled on your payments platform that are reversed, and the
reasons for such reversals.

14. We note that TPV does not include transactions processed through your gateway
products.  Please provide further disclosure regarding how you measure transactions
processed through the gateway  products, as well as whether you generate revenue on
such transactions.  Please also provide further explanation of the “value added services t o
customers and merchants” pursuant to which you generate revenue.  In this regard, we
note your disclosure on page 69.

15. We note your disclosure on page 96 that, pursuant to your operating agreement with
eBay, “[ you] and/or eBay will make certain payments to each other based on certain
referral services by eBay and the usage of [your] payment services and PayPal Credit by
eBay consumers and merchants  on the eBay Covered Properties, ” and your related
disclosure in the risk factors section.  P lease tell us wh at consideration you gave to
including such payments among your revenue sources.

Protecting Merchants and Consumers, page 60

16. Please tell us the basis for your statement that your protections for merchants and
consumers “are generally much broader than those protections provided by other
participants in the payments industry.”   Please also provide further details regarding how
you protect merchants and consumers from loss, and how your Payments Platform helps
you to detect and prevent fraud.

Legal and Regulatory Proceedings, page 63

17. Please update this section, and your filing as appropriate, to reflect the recent settlement
that PayPal and OFAC have reached  regarding PayPal’s violation s of certain regulations .

Daniel H. Schulman
PayPal Holdings, Inc.
John J. Donahoe
eBay Inc.
March 27, 2015
Page 5

 Management’s Discussion and Analysis of Financial Condition and Results of Operation

Net Revenues, page 69

18. We note that eBay Inc. has historically used take rate as one of its key operating metrics
that it believes is a significant factor affecting net revenues; however, we note that you
have not included this metric in your filing.  Please tell us what consideration you gave to
providing your take rate for the report ing periods presented.

Liquidity and Capital Resources, page 76

19. We note your disclosure of cash held by your foreign subsidiaries and potential tax
consequences on page 76, as well as your disclosure on pages F -34 through F -36 that you
have not provided for income taxes for a significant portion of your earnings of foreign
subsidiaries you currently consider to be indefinitely reinvested .  We also note  that you
made a change in the current year to your capital allocation strategy that drove the
recognitio n of a significant amount of deferred taxes.  Given the significance of these
amounts and that you made a change in your capital allocation strategy during the most
recently completed fiscal year, please revise your disclosure to include a more detailed
discussion and analysis of the cash held by your foreign subsidiaries, the recent change in
your capital allocation strategy, and the tax consequences that you would face if these
earnings were ultimately repatriated.  Please provide quantification where pos sible.

20. We note your disclosure on page 77 of the types of resources you intend to utilize to
allow you to sufficiently fund your operating activities, anticipated capital expenditures,
and PayPal Credit portfolio for the foreseeable future, including you r expectation of
access to capital markets.  We also note your disclosure on page 76 that you currently
fund your PayPal Credit loans receivable with borrowings from eBay and domestic and
international cash resources, and your disclosure on page 78 that fo llowing the separation
you will no longer participate in the cash management and intercompany funding
arrangements with eBay.  As you will no longer participate in the cash management and
intercompany funding arrangements with eBay, please revise your disc losure to
specifically analyze and discuss whether the resources you currently have access to will
permit you to fund your operating activities, anticipated capital expenditures and PayPal
Credit portfolio for the foreseeable future.

21. To the extent it repr esents a material source of liquidity or capital resources, please revise
your disclosure to better analyze and discuss what you refer to in the first paragraph on
page 77 as “funding through our strategic and financial partners.”

Daniel H. Schulman
PayPal Holdings, Inc.
John J. Donahoe
eBay Inc.
March 27, 2015
Page 6

 Quantitative and Quali tative Disclosures about Market Risk

Foreign Currency Risk, page 83

22. Please revise your disclosure to include quantitative information related to foreign
currency exchange rate risk using one of the three disclosure alternatives within Item
305(a)(1) of R egulation S -K.

Index to Financial Statements, page F -1

23. You disclose on page F -8 that PayPal Holdings, Inc. was incorporated in January 2015.
As PayPal Holdings, Inc. is the registrant on this Form 10, please revise to include the
audited financial stat ements of PayPal Holdings, Inc. or tell us why you believe their
exclusion is appropriate.  Refer to Rule 3 -01(a) of Regulation S -X.

Combined Statement of Income, page F -4

24. With reference to Rule 5 -03.2 of Regulation S -X, please tell us why you have not
separately stated the amount of cost of services and a subtotal for gross profit.  In this
regard, we note that eBay has historically presented the cost of net revenues and gross
profit on its Statement of Income.

Combined Statement of Cash Flows, page F -7

25. Certain line items in your combined statement of cash flows appear to be presented on a
net basis, such as “Notes and receivable from affiliates,” “Funds receivable and customer
accounts” and “Funds payable and amounts due to customers.”  Please clearly  label all
amounts presented on a net basis.

Notes to Combined Financial Statements

Note 1 – Overview and Summary of Significant Accounting Policies, page F -8

26. We note the description of PayPal’s combined financial statements.  Please tell us in
reasonab le detail why the net revenues presented in these combined financial statements
are larger than the net revenues of the Payments segment within eBay’s financial
statements.  In doing so, please clarify to us whether eBay presented certain of its
payments b usinesses in its Marketplaces or Enterprise segments, or whether these
combined financial statements include revenues and expenses for types of businesses
other than payments businesses.  Also tell us the amount of revenue from each of eBay’s
segments that  is included in these combined financial statements.

Daniel H. Schulman
PayPal Holdings, Inc.
John J. Donahoe
eBay Inc.
March 27, 2015
Page 7

 Note 9 – Segment and Geographical Information, page F -25

27. Please disclose revenues from external customers for each product and service or each
group of similar products and services  as required by ASC 280-10-50-40.  At a minimum,
it appears you should disaggregate revenues from PayPal Credit and other value added
services from your transaction revenues, similar to the manner in which eBay
disaggregated the revenues of its Payments segment, as these appe ar to be dissimilar
revenue streams.  Additionally, we note your disclosure on page 59 that net transaction
fees are “based primarily on the volume of activity processed through our Payments
Platform.”  As the fees are based primarily on the volume of acti vity processed but not
entirely, please tell us in detail the nature and amount of any other fee arrangements
included in the “Transaction revenues” category on page 59, and how you considered
these arrangements in your grouping of similar services for the  purposes of the ASC 280 -
10-50-40 disclosure requirements.

Note 10 – Commitments and Contingencies, page F -26

28. We note disclosure elsewhere in your filing concerning your buyer and seller protection
programs.  Please tell us how you considered whether the se protection programs are
effectively guarantees and how you considered the disclosure guidance in ASC 460 -10-
50.

Note 11 – Related Party Transactions, page F -29

29. We note your disclosure of aggregate amounts recovered from eBay relating to customer
prote ction programs as well as amounts allocated to you by eBay associated with
workplace resources, information technology, corporate functions and others.  As you
disclose aggregate amounts allocated for each year and state that the amounts were
included in s everal different line items but do not disclose the impact on each line item,
please tell us why you believe your current disclosure provides for an understanding of
the effects of related party transactions on the financial statements .  Alternatively, ple ase
revise to specify the amounts allocated to each line item for each of the periods presented.
You may consider using a table to illustrate this revision.  Refer to ASC 850 -10-50-1.

30. We note that you disclosed the amount of net revenues earned from eBay  and its
subsidiaries; however, you did not