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PayPal Payment Holds to Continue after Split with eBay

PayPal is updating its User Agreement and Acceptable Use policy in the UK in part because of its pending breakup with eBay – for example, it will continue to place holds on users’ account for disputes arising from eBay’s resolution process, and it’s updating its privacy policy to reflect the new relationship that PayPal will have with eBay.

PayPal explained to UK users, “We need to make some of these changes because eBay and PayPal soon will no longer be part of the same group of companies and will operate as unrelated organisations.”

But lest any users get nervous upon reading of the split, it added, “However, eBay and PayPal will continue to partner together to provide and further enhance the great experience you’ve always had when using PayPal to send or receive payments on eBay.”

It also provided a sales pitch on why users should continue to use PayPal: it’s safer, faster, and easier, it said.

PayPal UK is also amending some fees for cross border commercial transactions.

In a section in which it explains how it discloses user data to third-parties, it provides a table showing some of the providers it works with – including the companies to which it outsources its customer service and credit rating services and marketing services. For example, PayPal revealed it works with Adobe “to execute retargeting campaigns in order to deliver personalised advertising.”

PayPal also noted a significant change thanks to the eBay split:

The Acceptable Use Policy currently includes a provision under Transactions on eBay related to use of PayPal in support of eBay transactions. That provision requires, with respect to such use of PayPal, compliance both with the Acceptable Use Policy and with eBay’s rules related to prohibited and restricted items set forth on eBay’s website. In connection with the prospective separation of the eBay and PayPal businesses into independent publicly traded companies, we’re removing that provision from the Acceptable Use Policy.

And PayPal is adding to its Acceptable Use Policy an express prohibition against use of PayPal for payments related to bribery or corruption and provided additional details on the use of PayPal for gambling-related activities.

The new provision on temporary holds and payments made to eBay or buyers arising from eBay’s resolution process should be read carefully. On the one hand, “…PayPal may treat your authorisation and instruction for the payment of any given Authorised Amount as cancelled and PayPal shall not be obliged to complete such payment, if PayPal (in its sole discretion) decides that the claim would have been determined in your favour had it been filed as a Claim with PayPal.”

On the other hand, PayPal explains, “All claims filed directly with eBay are governed by eBay policy only. The terms of the PayPal Seller Protection Programme do not cover sellers in respect of claims filed by buyers directly with eBay.”

The changes to PayPal UK’s User Agreement, Acceptable Use and Privacy Policies take effect July 1, 2015.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.