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ProPay Responds to eBay Ban and Reveals Rationale

eBay gave PayPal rivals the boot last week, and one of the companies impacted said they were given some advance warning. ProPay said eBay gave them advance notice of its decision to prohibit sellers from offering its payment service as a payment method last week.

eBay attributed the decision to “low adoption,” according to Scott Nelson, Vice President of Marketing at ProPay. eBay also banned Skrill as a payment method.

Nelson provided EcommerceBytes with ProPay’s official position statement on eBay’s decision to discontinue ProPay as a payment option on eBay checkout:

“We’ve appreciated our relationship with eBay over the past several years. We’re disappointed in their decision to discontinue supporting ProPay’s clients, but we realize markets and companies change. The amount of eBay volume ProPay processes has always been modest, due to the limited integration and marketing permitted by eBay.

“While we are disappointed to see our customers impacted through this decision, we are preparing to reach out to them with some options for a continuing relationship with ProPay. ProPay offers a full suite of products for payment acceptance for the small businesses we serve. ProPay’s mobile solutions, virtual terminal, and integrated email invoicing makes payment acceptance for auction sales extremely easy and more affordable for clients.

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“We don’t expect this decision to materially impact our business.”

eBay launched a “safe payments” policy back in 2005 – some said in anticipation of Google launching a payment service, believing it had more to do with competition than with safety. eBay later renamed the policy to the “accepted payments” policy.

Since then, eBay has also prohibited sellers from offering checks and money orders as payment methods, with some exceptions.

eBay’s latest move has again raised cynicism about its motivation. While eBay and PayPal are technically separate companies as of July, they’re intricately bound by 5-year operating agreements, and some users say they feel as though the two are violating antitrust regulations and have reached out to their state attorneys general.

On the same day sellers were informed of the narrowing of choices in payment methods on eBay, PayPal announced it was raising its fees for some merchants through the elimination of volume discounts for all but the largest merchants who have negotiated contracts.

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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.