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Sun May 18 2008 23:33:37

eBay Buyer Asks, Why PayPal Slow to Clear

By: Ina Steiner

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wrote recently about eBay's decision to stop letting sellers block PayPal echecks. The reason eBay let sellers block echecks in the first place is because it takes days for echeck payments to show up in sellers accounts (4 days in US, 9 days in UK, 8 days in Canada).

Buyers don't like this either, obviously - the reason many use PayPal is so they can pay instantly and get their items quickly.

So why would eBay change its policy - the echecks still take a long time to clear? I don't know the answer to that question!!

It appears that sometimes, buyers don't even know they are funding payments with echecks. A caller to the last Town Hall Meeting demonstrated this - I'm copying the transcript of that caller. Hopefully eBay takes this as free market research and figures out a solution, because this does not help the buying experience!

The following is an excerpt from the transcript of the eBay Town Hall Meeting held on April 17, 2008.

eBay Member:: Thanks, Brian. Let’s go to 877-474-3303. Kathy, from Haysteins, weclome to the Town Hall. Kathy, what’s your question?

eBay Member:: Hello. It’s nice to be here. My question concerns the new eBay checkout system.

Griff: Um-hm.

eBay Member:: And my concern is that in the past, when I would make an instantaneous payment through PayPal, I knew that the seller’s account was credited immediately. But now with the new checkout system, it will take several days for the payment to be processed. Indeed, on a PayPal payment that I made on April 12, I received an email from a very nice seller, asking why the payment had not been received yet. And I checked the status of the payment on eBay and it said quote, "Your April 12, 2008, is being processed through PayPal. Remember, your item will be shipped to you after payment is complete." That payment was not processed until April 16. And so my concern is that even though PayPal used to be instantaneous, with the new checkout system, it doesn’t work that way anymore. And my worry is that I will receive negative feedback for late payments, even thought the payments were on time. And I did use the checkout feedback to talk about that concern of mine and I wondered how these glitches would be rectified.

Griff: Thanks, Kathy. We’re gonna turn this over to John. John?

eBay Member:: Thank you.

John: Yes, Kathy. Uh, so it’s difficult to understand exactly what might’ve happened to that transaction. Uh . .

eBay Member:: Actually, it’s several transactions. It’s happened to me on every transaction now. And I have . .

John: Just one question, was this with different sellers or was this with one seller?

eBay Member:: It’s with all different sellers.

John:: Okay.

eBay Member:: And it never happened in the past and I have more than four hundred positive feedbacks because all of my payments have always been on time. But now, they’re going to be, it seems automatically late by four days through no fault of my own. And how do we deal with that?

John: I have one further question. Did you pay with, you paid with PayPal.

eBay Member:: Yes.

John: Do you know if this was with an eCheck?

eBay Member:: Actually, one of the, some of the information that comes now from PayPal, and we never used to receive this, but it says, it does reference an eCheck on the correspondence.

Griff: There you go.

John: Um-hm.

Kathy: That you got paid for this with an e-check. And it’s the same PayPal account that we had when we first registered for eBay but it’s only been since the new checkout system was instituted that this started happening.

John: So if this is actually not due to the new checkout system. And this is actually I, someone else on this one. So with PayPal, what uh, PayPal will do is, is if you hit a certain limit of uh, with your PayPal account . .

Griff: Actually John, I can answer this. So um, Kathy, what’s happening is when you pay with an eCheck.

eBay Member:: Through PayPal, is that what you’re saying?

Griff: Yeah, through PayPal. Regardless, it says, as John says, it’s nothing to do really, with the checkout system. It’s always when you pay through PayPal and fund it with an eCheck. And if you don’t have a backup funding source on your PayPal account, like a credit card, the eCheck processes through the system, the national banking system, otherwise it’s called ACH account clearing house.

eBay Member:: Um-hm.

Griff: And it takes up to four to five days to process.

eBay Member:: Actually, we have the same backup system, which we always did.

Griff: Right. But for some reason, and we’ll have to take this one off line, because we know this is not checkout. This is a feature of PayPal. And if you want, we can contact you uh, speak with you off line, find out what is on your PayPal account now, whether or not you have a backup funding source, and if so, if it’s currently valid. But this again, is something we should take off line. I think I have your email from yesterday, Kathy.

eBay Member:: Okay.

Griff: So one of us can delve deeper into this for you.

eBay Member:: Okay. I appreciate that. Because we’re really worried about it not working like it use to.

Griff: Yeah. Again, I want to reiterate though, that this is not a problem with eBay Checkout. This is actually a PayPal feature. Thanks.

eBay Member:: Is PayPal owned by eBay?

Griff: Yes.

eBay Member:: Okay. So it still could be an eBay glitch.

Griff: No. It is definitely a feature of PayPal that we will hold a check, an eCheck payment for four days until it clears through Account Clearing House. It’s really not related to eBay Checkout. But thank you for your call.

 




Comments (38) | Permalink

Readers Comments

eBay Buyer Asks, Why PayPal Slow to Clear   eBay Buyer Asks, Why PayPal Slow to Clear

by: Tonya H.

Mon May 19 00:30:57 2008

This is just great, you cannot make this stuff up.

You have the CEO of eBay rambling about with absolutely no clue as to what he is talking about and Griff has to cut in to keep Donahoe from sounding completely clueless.

In the end, all the caller was left with was an unanswered question that was to be taken back behind closed doors, out of the public's view.

Hey eBay, why can't, um, we, get a, um, straight, well you know, um, answer, yeah that's it, well, um out of, well um you?

eBay Buyer Asks, Why PayPal Slow to Clear   eBay Buyer Asks, Why PayPal Slow to Clear

by: Ruth

Mon May 19 01:34:11 2008

It's called making money on the float. Paypal is famous for doing this stall tactic to rake in the cash. It's the same reason they freeze up accounts all the time for up to 180 days. Great way to draw interest on someone else's money...

eBay Buyer Asks, Why PayPal Slow to Clear   eBay Buyer Asks, Why PayPal Slow to Clear

by: Patricia

Mon May 19 01:41:39 2008

Now I see why ebay is soooooo screwed up.  Are the stockholders going to sit back while loonies steer the ship?  I hope not!

eBay Buyer Asks, Why PayPal Slow to Clear   eBay Buyer Asks, Why PayPal Slow to Clear

by: Elizabeth

Mon May 19 02:27:55 2008

Actually, if you look at the transcript you see that the John mentioned here is John Canfield, Senior Director of Trust & Safety

Not sure which is worse...the CEO or the Director of Trust and Safety being clueless!  LOL :-)

eBay Buyer Asks, Why PayPal Slow to Clear   eBay Buyer Asks, Why PayPal Slow to Clear

by: dimes

Mon May 19 02:44:03 2008

Cracks me up the way the eBay uh, management tries to distance themselves from paypal, as if that subsidiary is allowed to make a single move without first obtaining the  approval of, uh, eBay.

The change in ''funding mix'' as eBay refers to it has been in place for at least the past two months.  

Maybe eBay is trying to make up for the funds it donates to the money market fund so users won't see a loss...

eBay Buyer Asks, Why PayPal Slow to Clear   eBay Buyer Asks, Why PayPal Slow to Clear

by: tj

Mon May 19 06:38:49 2008

LMOL.....
What a load of tosh..everyone knows echecks are basically a fraud thats going to happen.....these clowns really show's that eBay thinks it's memebers are plain dumb & stupid...it comes across very clearly that eBay management is plain stupid

eBay Buyer Asks, Why PayPal Slow to Clear   eBay Buyer Asks, Why PayPal Slow to Clear

by: zeak

Mon May 19 07:11:49 2008

it sounds like the buyer is a bit clueless this is why the new feedback system is terrible. she has no idea how she is funding payments and she says she is a seasoned buyer. this is scary from a sellers point of veiw not with ebay but with buyers. not having a clue on how they are funding a transaction is very very scary.

eBay Buyer Asks, Why PayPal Slow to Clear   eBay Buyer Asks, Why PayPal Slow to Clear

by: Kal

Mon May 19 07:46:14 2008

Ummmm, Duh, D'oh, Uh-huh, Errr, Uh, and so on. Bunch of blabbering idiots.

I am also receiving eChecks allot now too, and when I write to the buyers to ask them if that's what they wanted to do, most have NO IDEA of what I'm talking about. I tell them it's going to take 5 to 7 days to clear before I get payment and ship their item, and I wanted them to be aware of the delay. Somewhere along the line, Paypal has changed the ''funding source'' on these people without their knowledge. They didn't even know this form of payment existed, because ''Paypal is instant payment''.

Yesterday I got an eCheck from a buyer, that has bought from me before, so I trust him. I was going to ship anyway, but Paypal would not let me generate the postage label because I had ''not been paid'' yet. Even though I had a link to generate postage, I was denied doing it. My only other option would have been to go to the USPS site and do it all manually. At this point, I just said forget it, he'll have to wait.

I can't believe the jerks that are running this company and how they set people up for failure. Then they bumble and stumble with the question and pass it back and forth like finger pointing.

eBay Buyer Asks, Why PayPal Slow to Clear   eBay Buyer Asks, Why PayPal Slow to Clear

by: Darth Buyer

Mon May 19 07:48:06 2008

Why can't the people at eBay and PayPal do their jobs???

They have had how many WEEKS to get the New Priority Mail box added?

WEEKS and MONTHS!!!

The people in charge get bonuses?!? They shouldn't even get a paycheck.

After Griff gets done evading the question, he puts on a judges robe to mock us from Colon Rule's blog.

THEY DON´T DO THEIR JOBS AND THEY MAKE FUN OF THEIR CUSTOMERS. I find this Griff (Uncle Grief) to be quite insulting and condescending. Why are these people so clueless. They act like 5th graders instead of professionals, running a Fortune 500 company.

What the hell kind of company is this???

So I should travel 1,000 miles to see them wear funny hats and evade questions?

Oh yeah - you get a pin and ''cool swag''.

These are the best people in the business? Then standards have fallen.

Darth Buyer - ''Don't underestimate the power of the Farce.''

eBay Buyer Asks, Why PayPal Slow to Clear   eBay Buyer Asks, Why PayPal Slow to Clear

by: Lisa

Mon May 19 08:13:34 2008

I feel like I'm having a long nightmare. They're protecting the buyers from the sellers? LOL It's time to wake up. WAKE UP PEOPLE! This company is being run by boneheads without spines.

eBay Buyer Asks, Why PayPal Slow to Clear   eBay Buyer Asks, Why PayPal Slow to Clear

by: Fish Noir Foul

Mon May 19 08:55:25 2008

4 days to clear is the best case.
I've had it take 6 & 7 days.
I was not aware buyers did not know they were using eChecks.
I guess that explains some of low DSRs even though I shipped same day payment cleared.

The maddening thing about eBay is they used to do things better in many different areas then changed to less efficient ways to the betterment of no one.

Even sellers that 'Game' aspects of the NEW system would likely be better off just using old ways the way they were meant to be used.

The only reason I can see for all this monkeying around is to put on a Dog & Pony Show for analysts to obscure some major Enron-type of debacle.  

It just smacks of desperation. The question is--- What are they so desperate about?

eBay Buyer Asks, Why PayPal Slow to Clear   eBay Buyer Asks, Why PayPal Slow to Clear

by: Gravy

Mon May 19 09:29:00 2008

And the winner is.... Ebay!

Lower those DSR's. The lower they are the more profitable your account is to Ebay.

eBay Buyer Asks, Why PayPal Slow to Clear   eBay Buyer Asks, Why PayPal Slow to Clear

by: Lars

Mon May 19 09:31:59 2008

Ebay will be sued. There is no way they can have such a hand in everybodys business and not be liable for the destruction they have cause Ebay sellers, and competitor companies, such as Craigslist and Google Checkout.

It's a matter of time and I hope the punitive damages wake management up. This is not the Untouchables as they seem to make themselves out to be.

eBay Buyer Asks, Why PayPal Slow to Clear   eBay Buyer Asks, Why PayPal Slow to Clear

by: Mary Ann

Mon May 19 10:22:23 2008

The caller should have been able to log into her paypal account and review her balance and backup funding source to see if it was working. Maybe her credit card reached it's expiration date, or something. It's pretty self-explanatory once you are on the paypal site. She didn't seem to even have a clue as to what her paypal account looked like.

The increase in echeck payments is a function of ebay no longer blocking them. I always use an echeck if I can. Why give paypal my money any sooner than they need it? Paypal is very clear in it's communications to buyers and sellers as to the status of the payment, and notifying both parties when it clears.

As a seller I have always accepted echecks and have never once encountered a buyer who didn't know they used it!

eBay Buyer Asks, Why PayPal Slow to Clear   eBay Buyer Asks, Why PayPal Slow to Clear

by: Peter Leeflang/CEO of Leeflang Archives Corporatio

Mon May 19 10:32:59 2008

1) Regarding Paypal's lack of clarity towards buyers that they are using an echeck to fund:
After filling a Paypal survey, I got calle dby Amanada of Paypal. She let me elaborate on my negative points regarding our buyers abandoning Paypal and tellinmg me so.
I explained that one of the main issues is that Paypal does not clearly show a user that money is with drawn from a bank account, nor do they ask permnission with each transaction to do so. It is all in the small print, often tey use default settings a user d oes not remember having set, it is not always made clear to buyer how much is taken out nor how long it will take to clear etc. Same with seller, especially when issuing refunds.
My suggestion was to make clear to buyer and seller every step of their transaction how much is taken from where and when shoudl it clear, not just in a post-transaction email, but online in dialog. That prevents nasty suprises.

2) The truth is that Paypal used to clear international ec hecks rapidly (often in 4-6 days) and now it does not anymore. A UK echeck will take at least 10 days (nor 9 as stated anove)!

3) Sellers fear echecks because Paypal does not guarantee them really (unless you are 'seller protected' with them, which not everyone is and even with protection it takes ages to get your money back).
Thhe reason for thsi fear is that Paypal can still take echeck money back WEEKS (2-3 weeks) from a seller's bank account. I had this various times. It usually happens if a buyer has a dispute with Paypal and closes down his bank account. Closed bank accounts result in buncing echecks, which Paypal apparenmtly v doe snot present to teh banks until weeks after they were cashed.

4) As to the reason for slowness in clearing echecks, I wager it is a mic between Paypal's accounting system being a fossil in today's technology, so slow and inefficient, and an attempt of Paypal to make more money on the 'float', so holding funds longer.

eBay Buyer Asks, Why PayPal Slow to Clear   eBay Buyer Asks, Why PayPal Slow to Clear

by: BidFinders

Mon May 19 10:58:20 2008

It's interesting that the caller in the example implied that this echeck delay wasn't there when she first used PayPal at checkout years ago.

I used to see an option to pay with a credit card when checking out with PayPal - I preferred that method as my credit cards give me cash back, so I can save 2% on my purchase.  It seems like a year ago that option disappeared and the funds must come out of my PayPal money market account now - certainly to save PayPal credit card fees.  I don't like the change as a buyer but could not figure out how to use a credit card to pay since I had funds in my PayPal account. It seems one day the option to use a credit card just went away...

eBay Buyer Asks, Why PayPal Slow to Clear   eBay Buyer Asks, Why PayPal Slow to Clear

by: Patricia

Mon May 19 11:35:12 2008

This gave me great insight into the minds of ebay's new management.  In a word, I'd call it ''terrifying''.  I sat back absolutely amazed as I read it.  Then this:

''THEY DON´T DO THEIR JOBS AND THEY MAKE FUN OF THEIR CUSTOMERS. I find this Griff (Uncle Grief) to be quite insulting and condescending. Why are these people so clueless. They act like 5th graders instead of professionals, running a Fortune 500 company.''

Yes, its so easy to pawn off their own frailties on us...sure, the sellers can take it.....NOT!  Ebay, you have an awfully big shovel and you're digging your grave very very fast!

eBay Buyer Asks, Why PayPal Slow to Clear   eBay Buyer Asks, Why PayPal Slow to Clear

by: Patricia

Mon May 19 11:37:23 2008

I have no idea what the user's real problem is and whether it is with paypal or her.  However, whenever I'm notified that a buyer has paid with an echeck I always write the buyer to let them know that I will be sending their item just as soon as their echeck clears.  Its tipping them off that I know that's how they paid.

eBay Buyer Asks, Why PayPal Slow to Clear   eBay Buyer Asks, Why PayPal Slow to Clear

by: Matchboxcarguy

Mon May 19 11:39:56 2008

Like Tonya H. said ''you can't make this stuff up.''

I hope they are paying Griff very well. He, more than anyone has been the ''face'' of eBay for a long time.

Constantly having to cover for these total morons would have to get to you after a while....

eBay Buyer Asks, Why PayPal Slow to Clear   eBay Buyer Asks, Why PayPal Slow to Clear

by: Laura

Mon May 19 12:08:22 2008

@BidFinders
Yes, you have to a zero balance in Paypal account in order to use your credit card. Still not easy to find or use.

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