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Thu May 22 2008 23:10:04

eBay Considering PayPal-Only Policy in US?

By: Ina Steiner

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As eBay prepares its response to the opposition of its PayPal-only policy in Australia, it appears the company is also considering a similar policy in the US. eBay must respond by tomorrow to the hundreds of submissions by users, companies and banks that told the Australia Competition and Consumer Commission (ACCC) they think the policy would be anti-competitive. The ACCC told eBay it would make a ruling in mid-June before the policy is scheduled to start. In the meantime, eBay appears to be gauging seller reaction to such a policy in the US.

A couple of sellers emailed me a question included in a survey they received from eBay outlining scenarios in which eBay would only allow PayPal, or would only allow PayPal and certain other methods of payments. Subsequent follow-up questions were designed to determine what incentives sellers would accept if they were forced into these situations in order to prevent them from ceasing to sell on eBay. Here's an excerpt from the survey:

For the next question, we'd like you to consider the following statement outlining a possible scenario regarding a new eBay policy. Please note that this is one of several options still under discussion, that may vary from country to country. We greatly value the opinions of select sellers like yourself and appreciate your taking the time to review it:

To make eBay a safer place to buy and sell, sellers would be limited to accepting only the following safer electronic payment methods for their eBay sales (Paper forms of payment such as personal checks, cashier's checks and money orders would no longer be allowed):

* PayPal

* Certain other electronic payment methods currently allowed on eBay, such as Xoom and Propay

* Credit Card or Debit Card payments made directly to the seller's Merchant Account (Sellers would need to acquire a Merchant Account from a bank or other provider)

* In person payment for local pickup items

Sellers would be able to accept any one of the above payment methods, or they could accept all of the above. Sellers would receive full protection from payment reversals for items sold on eBay and paid with PayPal when they ship to the address provided by PayPal. Buyers paying with PayPal would be fully covered, no coverage limit, if their item doesn't arrive or is different than described.

It's strange that eBay argues that a PayPal-only policy is imperative in Australia but not on other sites - more reason to think this is a test case to learn how to deal with a government regulators before moving on to other countries.

Update 5/23/08: eBay spokesperson Nichola Sharpe contacted me to say the survey was not asking about a PayPal-only policy.

Hmmm, in my initial reading of the sentence, "Sellers would be able to accept any one of the above payment methods, or they could accept all of the above," I took it to mean eBay would either limit sellers to one of those methods, or some combination. Now I see eBay was saying sellers could choose to accept all of those methods or pick one.

Regardless, the survey indicates eBay is moving toward a more restrictive payments policy than its current one, which already excludes competing services such as Google Checkout. Imagine excluding buyers who want to use checks: "Paper forms of payment such as personal checks, cashier's checks and money orders would no longer be allowed," the survey says.

Here is eBay's official reaction to this blog post:

"At eBay and PayPal, we regularly seek input from our customers about potential product and policy changes. We're simply asking customers to interact with/advise us on possible scenarios as we try to make the marketplace safer in various markets. And, as we have firmly stated before, in the US, we are not mulling, planning, or otherwise seriously considering a move to PayPal as the only payment method on eBay.com. There are US market-specific reasons why PayPal-only is something we simply cannot do in the US. "




Comments (32) | Permalink

Readers Comments

eBay Considering PayPal-Only Policy in US?   eBay Considering PayPal-Only Policy in US?

by: imo

Thu May 22 23:33:56 2008

IMO Ebay is more then just considering a paypal policy in the US they are banking on it.

In the last town hall meeting they alluded to the plans for seller protection FOR ALL. I was wondering how ....now I know.



eBay Considering PayPal-Only Policy in US?   eBay Considering PayPal-Only Policy in US?

by: windmilltrading.com

Fri May 23 00:07:27 2008

It's like eBay is intent on killing itself and driving all small(er) sellers away to have the site be taken by the ''buy''s of the online world.  Oh well, the more difficult eBay makes it for small(er) sellers, the better it is for the eBay alternatives like eBid, uBid, iOffer, BluJay and all the others!

On the other hand, if PayPal would lower their fees (and they could, because if they were the ONLY payment method allowed, their volume would go up which would leave room for a downward price adjustment) it might take away some of the pain.  Main reason I do not like PayPal is their skyhigh fees... (and a few other things, of course)

eBay Considering PayPal-Only Policy in US?   eBay Considering PayPal-Only Policy in US?

This user has validated their user name. by: Ming the Merciless

Fri May 23 00:16:18 2008

Ina,

Perhaps you can obtain through FOIA a copy of the Justice Department order warning ebay when they acquired PayPal several years not to engage in anticompetitive activities using PayPal.

This is a prime example of ebay "disruptive" disorder where the various personalities haven't a clue what any other of them says they're NOT considering such a thing in the USA followed by someone else suggesting such a move is under consideration.

There could be no more clear cut violation of th DoJ order and the tying clause in the Sherman Anti Trust than for ebay to require PayPal only in the US.

Further, to adopt such a requirement would drive more buyers away than their incompetance and ebay's continued acceptance of and refusal to rid the site of fraud as evidence of hidden bidder IDs have done so far.

Ebay's persistent insinuations that all these changes are necessary to protect buyers form big, bad nasty sellers is all a facade anyway, and the fact of the matter is that many, many buyers have a far greater distrust of ebay than they do of their sellers, and they already won't use PayPal.

But in a perverse sort of way I hope it happens so that it will bring what I pray will be a Democractic Attorney General and a congressional investigation down of them so fast The Donna Ho won't have time to spell Ken Lay.

America's Most Despicable Corporation.

eBay Considering PayPal-Only Policy in US?   eBay Considering PayPal-Only Policy in US?

by: anon

Fri May 23 00:17:28 2008

when will a company like Google come along and start up a rival auction site

please please please

you will hear the cheering worldwide when ebay gets knocked off it's ivory tower

eBay Considering PayPal-Only Policy in US?   eBay Considering PayPal-Only Policy in US?

by: Shelly

Fri May 23 00:37:20 2008

@Ming the Merciless

That is the problem - they appear to be in a mad rush to get all these changes made by the end of the year clearly indicating that they have been benefiting from some Politician/s running interference for all the BS they have pulled so far.

So the question is what can be done to stop them from getting their demonic claw foot in the door before some real people take over in January?

eBay Considering PayPal-Only Policy in US?   eBay Considering PayPal-Only Policy in US?

by: Denise

Fri May 23 00:43:18 2008

Sellers's in USA should do what is happening here, bang4bucks.com.au was set up by ex and current seller's so they could spread their wings and have a indepedant venue, it is moving along quite nicely in Australia after only 3 weeks, prepare yourselves as im sure there is more to come

eBay Considering PayPal-Only Policy in US?   eBay Considering PayPal-Only Policy in US?

by: tj

Fri May 23 00:52:09 2008

Only last week eBay said PP only for the US was not even a consideration…now 1 week later it’s on the table as almost certain???

eBay your no is a yes and your yes is  well nobody knows

Totall cr@p

eBay Considering PayPal-Only Policy in US?   eBay Considering PayPal-Only Policy in US?

by: Shelly

Fri May 23 01:00:40 2008

@tj

Actually if you go back to Ink and reread his post you will see that he double talked in his BS - read the part of his not making a categorical statement to the reporter.  I called it out on him too so just go through the responses and you'll see yet another big fat eBay lie.

eBay Considering PayPal-Only Policy in US?   eBay Considering PayPal-Only Policy in US?

by: Henrietta

Fri May 23 01:09:15 2008

No they did NOT say they were not considering such a thing in the US.The EXACT words were ''In the U.S., we are not mulling, planning, or otherwise seriously considering a move to PayPal-only,''

When dealing with eBay you MUST listen to what they are NOT saying as hard as to what they are saying.

The plan they are proposing is not the same one they are trying in Australia. In the USA it would not be Paypal Only, it reads ''PayPal(or) Credit Card or Debit Card payments made directly to the seller's Merchant Account (Sellers will need to acquire a Merchant Account from a bank or other provider)''

This is of course very clever because it still excludes Google Checkout which is directly in competition with PayPal while offering US sellers alternatives which are not economically viable on the site. It would be de facto exclusionary while maintaining the legal appearance of non monopolistic behavior.

I covered this here:
http://redinkdiary.blogspot.com/2008/05/yes-we-have-no-banana
s-paypal.html
here:
http://redinkdiary.blogspot.com/2008/05/ebay-pants-on-fire.html
and here
http://redinkdiary.blogspot.com/2008/05/deceptive-misleading-b
usiness-as-usual.html


eBay Considering PayPal-Only Policy in US?   eBay Considering PayPal-Only Policy in US?

by: Sandra

Fri May 23 02:03:35 2008

Most Australians are hoping this will not get through the ACCC.  If it does it will certainly spell the end for many of us smaller sellers, which I think is eBay's main aim.

eBay Considering PayPal-Only Policy in US?   eBay Considering PayPal-Only Policy in US?

by: Mandy

Fri May 23 02:20:59 2008

Don't you get that? ebay are making large losses because they are unable to increase fees anymore , at the same time buyers and sellers are running away in masses.They need to make up for those losses on another end - and that end is Paypal

of course they will create a policy which makes all sellers use paypal , for example they could simply make this policy:

You can offer any payment method but you need to be paypal verified in order to be able to LIST any item

eBay Considering PayPal-Only Policy in US?   eBay Considering PayPal-Only Policy in US?

by: dimes

Fri May 23 02:24:51 2008

According to the Antitrust law blog, the most recent court ruling in the current antitrust lawsuit against eBay dismissed the plaintiffs' allegations of 'tying', for the following reason:

''Relying on Ninth Circuit case law that  requires an allegation of tying to include a claim of “pernicious effect on competition and lack . . . of any redeeming virtue,” Northern Pac. Ry. Co. v. United States, 356 U.S. 1, 5 (1958), the court held that plaintiffs failed to sufficiently allege that any tying arrangement actually caused harm to online auction market competitors.''

However, the court denied eBay's motions to dismiss several other complaints in the suit, including Monopolization:  

''eBay also moved to dismiss plaintiffs’ monopolization and attempted monopolization claims on the grounds that plaintiffs failed to identify any exclusionary or anticompetitive conduct arising from eBay’s acquisition of PayPal and online payment policies.  The court rejected eBay's argument and held that plaintiffs' allegation –– that eBay’s acquisition of PayPal and related policies are anticompetitive because it prevents online auction competitors from breaking into the online auction market–– satisfy the initial pleading requirements.

As a result, the court denied eBay’s motion to dismiss and plaintiffs can pursue abuse of monopoly power and monopoly maintenance claims.''

http://tinyurl.com/58pruh

What an odd time for eBay to be asking about a practice that would certainly lead to further legal action, given that it has no particular reason to believe that it will prevail in the current case.

On the other hand, this IS eBay, a company loaded with managers unable to communicate effectively with the outside world.  It wouldn't be a big surprise to learn that they don't talk to each other, either.  

eBay Considering PayPal-Only Policy in US?   eBay Considering PayPal-Only Policy in US?

by: Craig

Fri May 23 02:52:38 2008

''Don't you get that? ebay are making large losses because they are unable to increase fees anymore , at the same time buyers and sellers are running away in masses.They need to make up for those losses on another end - and that end is Paypal''

Sounds like public transport doesn't it. Patronage drops, so they put the fares up. When patronage drops further due to increased prices, they up the prices again. If they stopped all this BS, customers would return, as, despite all of the supposedly competing sites, NONE are as large or global as eBay, and are unlikely to be for a long time to come. Someone mentioned bang4bucks as an example, but for me, it's web site design is too busy and not a pleasant experience.

eBay Considering PayPal-Only Policy in US?   eBay Considering PayPal-Only Policy in US?

by: tj

Fri May 23 03:52:53 2008

I truly believe the bottom line on all these changes are linked to eBays share price..make as much upheaval as possible so the stock tanks or levels ..Then buy back $4.5 BILLION worth (10%)…play around with a few more policy’s, buy back more stock..THEN start to win back the old faithful, stock goes up; eBay directors etc WIN$$$$$$$$$...quite simple really, bottom line at the moment we are not even a consideration to eBay

eBay Considering PayPal-Only Policy in US?   eBay Considering PayPal-Only Policy in US?

by: ImproveYourCheckout

Fri May 23 05:31:21 2008

eBay would have benefited from rolling out their technology so buyers could pay with credit cards and Paypal in an easy seamless way. Then it would have been a lot easier to move with seller support on such a drastic proposal. Its all very sad the direction is eBay is going. Again, actions motivated by greed and sellers bending over to accept the punishment.

eBay Considering PayPal-Only Policy in US?   eBay Considering PayPal-Only Policy in US?

by: BeBopDeluxe

Fri May 23 06:03:37 2008

Why is ebay doing this slow, drawn out suicide dance?  Why not cut to the chase and just end it?  

eBay Considering PayPal-Only Policy in US?   eBay Considering PayPal-Only Policy in US?

by: ebay flunky

Fri May 23 07:12:39 2008

I agree that ebay will roll out paypal only in the US market. And probably as soon as possible after they can push it through on Australia.

I think pushing it through Australia was the biggest road block for them, and when they can win australia to paypal only, the US market will be a piece of cake as they apparently own the republican party in this country.

I know they're going to make paypal madatory because I've had an increase in NPB (non-payer) bidders. I actually had 4 seperate bidders within 10 minutes, and not one of them even bothered to comunicate with me??

VERY STRANGE!  

I also had customers send me personal checks even though I do not want this form of ''fragile'' payment. Now, this leads me to being pressured to ship goods early to maintain my DSR score.

The buyers have no pressure to do anything specific, or to even follow the seller terms of sale. The only way to fix that is to requre paypal only payments, and that's exactly what they're going to push through. First they are trying push it on the Aussie market as that is the only stumbling block for them.

Why doesn't ebay just announce a new mission statement and get it over with? No, they got to play with the political bullshit malarchy just like they do in washington.

It all washes out the same, the player with the most money wins again. The word democracy is a USA joke anymore, there is none, it's just a dirty word.

Just let the biggest players have it all, and get it all. Whatever they want, and to hell with the rest of the peasants. What good is an economy if it only benefits the top 20%, must be pretty damn good living at the top in this jury rigged system.

SCREW THE PEASANTS!!!

F LIBERTY AND JUSTICE FOR ALL!!

F DEMOCRACY AND FAIR TREATMENT!!

It's a joke to think we live in a democracy were the biggest wallet gets all the candy. What a screwy system we have, when our law makers are the biggest crooks, and it's acceptable!

It's not so bad for them, the economy works really well for them, what's wrong with the rest of the peasants?

Go live in a cardboard box please.

Ebay Flunky.

eBay Considering PayPal-Only Policy in US?   eBay Considering PayPal-Only Policy in US?

by: Will

Fri May 23 09:18:10 2008

Seems eBay s missing the mark here.

The first problem is the buyers that don't trust PayPal. I would say about 95% of all my payments come through PayPal already. The 5% that doesn't is because of buyers not comfortable with giving PayPal their information. That 5% won't convert, they will just leave the site

The second problem is the way PayPal charges sellers for receiving money. They should charge less for people paying by PayPal balance or e-check, but they charge the same as if it was by credit card.

As for the protection, they always leave gaps. USPS is still the weakest as far as delivery information goes. If I mail international I have to charge for Global Priority or Global Express to have a chance of some form of delivery confirmation. But if I sell you a $0.99 item would you want to pay $20+ for shipping so I can meet PayPal requirements? Or will PayPal accept proof of mailing? I don't see either of these happening.

eBay Considering PayPal-Only Policy in US?   eBay Considering PayPal-Only Policy in US?

by: angela

Fri May 23 10:01:41 2008

I think most of us who were around when the "always free!" scam ended are gloating, "We told you so." Of course, the power sellers were perfectly content to let eBay nickel and dime the small sellers right off the site. This is their just desserts.

It's pretty clear that Donahoe is finished with the plan of phasing the changes in over the course of years. He is going to turn the site into an Amazon knock-off, not realizing that the market already has an Amazon that it is perfectly content with.  And, in a twist of irony, Amazon is reportedly experimenting with opening up various payment options to the sellers.  Could Donahoe be any more clueless?

eBay Considering PayPal-Only Policy in US?   eBay Considering PayPal-Only Policy in US?

by: tula

Fri May 23 13:34:30 2008

What I don't get is why eBay doesn't make the whole payment process transparent?  Look at Amazon (seems like eBay's been doing a lot of that lately).  Do you know who processes Amazon's payments?  No.  Do you care?  Not likely.

ImproveYourCheckout is correct in that eBay should build a payment interface like Amazon.  Paypal already offers transparent credit card processing for website merchants, so why not simply do that on their own site? They could still offer "regular" style Paypal payments, for those who like that and possibly continue to allow checks/money orders for those old-school types who prefer that.

eBay could do this and still get the same Paypal fee for straight out credit card payments.  Paypal fees are essentially merchant CC fees, so why don't they do this?  

I think it would make for a much-improved "buyer experience" since it would be closer to what customers now expect from online retail sites.  Many customers don't want to have to sign up for a second account (having already signed up for eBay), give out their banking info, and deal with all the hassles of using a "payment service", but these same customers will happily give out their credit card numbers to online merchants.

On the seller side, payments processed this way could be handled simply as a different category of Paypal payments.  It would only really appear different (and better) to the buyers.

I'd offer this suggestion to eBay, but they don't want ideas unless they ask you for them, so maybe someone who has the ear of eBay personnel could pass it along.

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