|Fri Jan 9 2009 00:25:20|
eBay Payment Policy May Eliminate Deadbeats
By: Ina Steiner
eBay is making changes to its payment flow that will ultimately force buyers to enter payment information through its checkout system. It looks like the end of the deadbeat buyer when the changes are rolled out completely later in the year, since eBay would know automatically if a buyer has not paid a seller.
While it may look like the significant news in today's eBay announcement was the addition of PayMate and Moneybookers into eBay's Accepted Payments Policy, the big news is that sellers with their own merchant credit-card accounts will have to integrate with eBay's checkout through its Payflow Gateway.
ProPay is currently the only third-party system integrated with eBay's checkout system. When buyers choose to pay via ProPay from sellers who offer it as a payment method, the buyer is taken to a secure ProPay page during the checkout process where they actually enter their credit card information. eBay sends all the information necessary for ProPay to process the transaction on behalf of the seller in a seamless process.
The significance of these changes is that eBay can force buyers to pay immediately upon checkout - even if the merchant has their own credit-card merchant account.
Further thoughts: What happens in an auction situation? Ed at the BuildaSkill blog noticed that eBay's Griff had revealed in an interview that eBay would, as part of an effort to eliminate the unpaid items problem, automatically take money from the highest bidder's account or credit card and put it into the seller's account (for auction format listings). The revelation drew mixed reactions from sellers on the eBay discussion board.
It looks like it will take some time for these changes to roll out - the gateway won't be available until March, and eBay still allows third-party vendors to offer their own checkout system, though it already told them in June it would be doing away with them. More on this in tomorrow's Newsflash newsletter. (updated on 1/9/08)