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Mon May 25 2009 22:31:48

Note to eBay Sellers with Credit Card Merchant Accounts

By: Ina Steiner

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eBay requires sellers who have credit card merchant accounts to use its Payflow Gateway Service (at no extra cost) to allow buyers to enter their credit card information directly and securely in eBay checkout. (Note that sellers are not required to use eBay Checkout, but those merchants who wish to use their credit card merchant account on eBay Checkout are required to use the Payflow Gateway Service.) A merchant who is going to begin using eBay's Payflow Gateway beginning in June wrote to me with concerns about what eBay and PayPal were telling him about the security features of the system.

He wrote, "What seems to me to be not widely known is that the Payflow gateway PayPal setup to be able to offer a charge card processing gateway for eBay sellers is not same Payflow gateway PayPal is already offering (in fact, many PayPal Payflow representatives are woefully unfamiliar with the eBay version; see below). It is a stripped down version, meaning the gateway has no fraud detection or prevention features and those features cannot be added even if an eBay Payflow user wanted to add them for a fee. Apparently, eBay did not spec those features as requirements or eBay and PayPal decided the eBay version of the gateway did not need them. That means, at the very least, eBay sellers that use the eBay PayPal Payflow gateway cannot require CVC numbers and use AVS on the transactions that flow through the eBay Payflow gateway.

"After spending a total of nearly two hours on the phone on four separate occasions with six different Payflow representatives, I finally received this message from Payflow support this evening: Fraud Protection is not available on the Payflow account when your partner is eBay."

I contacted PayPal and asked them some questions, here are the answers:

"Is the PayPal Payflow gateway for eBay sellers the same Payflow gateway PayPal is already offering?"
Yes.

"Does the Payflow gateway for eBay offer the same fraud detection and prevention features?"
No. eBay provides a set of strong fraud control features that best suit the individual seller. These are the same set of fraud detection and prevention features that we use for credit card fee payments to eBay. This includes velocity checks, eBay credit card blacklists, and account limits.

Please note that the seller also benefits from any fraud detection and prevention features offered by his/her credit card processor.

"Can merchants require CVC numbers and use AVS on the transactions that flow through the eBay Payflow gateway?"
Yes, by the end of June, sellers using the Payflow gateway for eBay will be able to block credit card payments that don't pass CVV2 or AVS checks. We agree this is an important control for sellers.

If you have additional questions or concerns, please post them here in the comments. You can read more about eBay's requirements around merchant accounts and its checkout system in these August 2008 FAQs.




Comments (39) | Permalink

Readers Comments

Note to eBay Sellers with Credit Card Merchant Accounts   Note to eBay Sellers with Credit Card Merchant Accounts

This user has validated their user name. by: Bill

Tue May 26 02:21:22 2009

We use web payments pro for our merchant account. I was told by PayPal that the eBay Payflow would not work with web payments pro. I then asked if I changed to web payments pro payflow if it would work and I was told no it would not work and that for the payflow for eBay I would have to get a merchant account with a bank because that is the only way for it to work.

Now what it seems like to me is that the payflow gateway that eBay has set up must not be PCI compliant and they are relying on the banks compliance. If the gateway is not compliant then when the bank runs a test they will find it to not be and then will tell the merchant that it can not handle any transactions from eBay any more because of the lack of compliance.
It seems that eBay is trying to buy some time to get payflow compliant and since PayPal knows it is not compliant already they are not going to take the chance of having it run and then loose their own PCI compliance for all of PayPal operations.
Another powder keg ready to explode because of eBay trying to jimmy rig something that is not completely ready to work.

Bill

Note to eBay Sellers with Credit Card Merchant Accounts   Note to eBay Sellers with Credit Card Merchant Accounts

by: Jake

Tue May 26 02:30:57 2009

And why is the merchant payment details of any interest to eBay other than grabbing the buyers card payment details...this smells of very fishy probing  

Note to eBay Sellers with Credit Card Merchant Accounts   Note to eBay Sellers with Credit Card Merchant Accounts

by: MORE FRAUD on the way

Tue May 26 05:50:53 2009

Another good example why you should RUN AWAY not walk away from selling on eBay. C'mon, let's just give the buyers everything for free - that is what it is coming to and it's almost there now. How ebay and paypal can be so corrupt and deal in illegal activity is beyond comphension.

Note to eBay Sellers with Credit Card Merchant Accounts   Note to eBay Sellers with Credit Card Merchant Accounts

by: ebay = penny stock

Tue May 26 08:13:52 2009

Just another glaring example of EBAY INCOMPENTENCE.

Do you really think they care about anyone or thing????? The only thing they care about is MONEY.

Note to eBay Sellers with Credit Card Merchant Accounts   Note to eBay Sellers with Credit Card Merchant Accounts

by: norma

Tue May 26 08:56:16 2009

ummmmm....this reminds me of a situation I recently had with the Ebay's Trust and Safety department.  As you know, Ebay owns Paypal.  The trust and safety department could not and would NOT give me a straight answer to my questions...they would go around in circles and depending on who received my email, I would receive a different answer to the same question!  

I wonder if these same people from Trust and Safety are now working the phones at Paypal?  Shame..I like Paypal!

Note to eBay Sellers with Credit Card Merchant Accounts   Note to eBay Sellers with Credit Card Merchant Accounts

by: credit

Tue May 26 09:49:42 2009

It is a good blog, nice content also. Thanks for sharing such a good blog.

Note to eBay Sellers with Credit Card Merchant Accounts   Note to eBay Sellers with Credit Card Merchant Accounts

by: John

Tue May 26 10:22:42 2009

This is another example of ebay / paypal illegal monopoly abuse.

Instead of complaining ebay members should contact the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights. As Ina has reported, they have looked into ebay and online payment methods before. It's chaired by Herb Kohl (Wisconsin) and his office can be reached @ Phone: 202-224-3406. Every time you feel that ebay or paypal has acted in a manner that is unfair or one sided, give that number a call and leave a complaint with the legislative aide. Tell them about ebays coercive / one sided policies and ask them to investigate. This is the Congressional body that investigates such concerns and they have been known to intervene. If enough merchants complain about what is happening to them they will investigate.

In democratic system like ours, the only way to get monopolies like ebay to change their behaves is either through the legislative process or the courts. It's a constant complaint here that no one can afford to take ebay to court. If you cannot afford to take them to court then at the very least take the time to report them to the members of Congress. If they get enough complaints they will act.

Believe it or not, such a Congressional inquiry is ebays biggest fear. A nightmare scenario. It can take years and where it ends is anybody's guess. Placing restrictions on how a company operates is very common. Other options for the committee include, fines, Justice Department oversight of all company decisions to a physical break up of the company.

Note to eBay Sellers with Credit Card Merchant Accounts   Note to eBay Sellers with Credit Card Merchant Accounts

by: fruity

Tue May 26 12:56:24 2009

Ina, I think they're positioning ebay/payflow in order to do an upsell.

ask them if the deposit of funds to US using their ebay payflow is actually delayed into a persons bank account in comparison to those using their own system.

Ask them at which points do they assume a "Master of Record" role with their ebay payflow

Sounds to me that they're doing alot more than just helping us all out. Sounds to me like they're harvesting. Hey ebay, I'm going to go talk to your parents see if they'll fine you again

Note to eBay Sellers with Credit Card Merchant Accounts   Note to eBay Sellers with Credit Card Merchant Accounts

by: voodoo

Tue May 26 12:56:27 2009

@ john

You gotta be dreaming. Do you really think that the senate really cares. If they investigated once and found nothing I would seriously doubt that they would investigate them again.

You give the elected officials to much credit. They have bigger pockets to fill.

Note to eBay Sellers with Credit Card Merchant Accounts   Note to eBay Sellers with Credit Card Merchant Accounts

by: fruity

Tue May 26 12:59:33 2009

and you know as a buyer I'd be hesistant to use any merchant account now on ebay purchases. its not like ebay is helping. some of the checkouts right now with those with merchant accounts only show paypal as the payment option. even if the merchant doesn't have paypal listed (and uses their own service). bet you didn't know that!

Note to eBay Sellers with Credit Card Merchant Accounts   Note to eBay Sellers with Credit Card Merchant Accounts

by: Another John

Tue May 26 13:00:30 2009

@ voodoo.....They have bigger pockets to fill......Yeah, their own.

Note to eBay Sellers with Credit Card Merchant Accounts   Note to eBay Sellers with Credit Card Merchant Accounts

by: Malcolm

Tue May 26 14:37:30 2009

Some of the responses from the PayPal representative are at least misleading and at worst incorrect:

1) It is disingenuous for PayPal to represent that Payflow, in its fee-based form, and Payflow for eBay are the same.  For the merchant, they are not the same, as Payflow for eBay currently lacks the ''Advanced'' (PayPal's term) fraud protection offered as part of the fee-based Payflow service.  Until fraud protection is added to Payflow for eBay, for all intents and purposes, the two Payflow services are not the same.

2) The PayPal spokesperson said ''the seller also benefits from any fraud detection and prevention features offered by his/her credit card processor.''  That is incorrect:  authentication does not occur at and is not performed by the processor.  Authentication typically occurs at and is performed by the gateway, which in this case is Payflow.  Fraud protection is typically set at and performed by the gateway.  ''Typically'' is used because some e-commerce applications, such as Infopia and CA, do offer a number of fraud protection features, but if eBay is handling the checkout, the transaction bypasses those features.

Note to eBay Sellers with Credit Card Merchant Accounts   Note to eBay Sellers with Credit Card Merchant Accounts

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

Tue May 26 14:54:29 2009

The broken record plays again:

Ebafia doesn't care whether sellers are victims of bad credit cards or not.

The ONLY thing ebafia cares about regarding non Diamond sellers is collecting seller fees.

It really is as simply as that.

"Strong and powerful" tools?" Hamsters running on wheels.

Ebafia is run by incompetent, arrogant, sociopathic adolescents who refuse to look past ebafia's bottom line when devising new programs. They really don't care about anything or anyone except their paychecks, stock options, and promotion prospects.

The ebay version will NEVER work properly and/or securely because ebafia wants ALL payments to go through PayPal.

Ming's Ebay Law #1:

EBAY LIES.

DEATH to ebay corp. in 2009.

Note to eBay Sellers with Credit Card Merchant Accounts   Note to eBay Sellers with Credit Card Merchant Accounts

by: On Lies and Secrets

Tue May 26 15:47:25 2009

Great reporting Ina!

If the ebay corporation is counting on paypal to become the profit engine of the enterprise, I think shareholders are in for a world of disappointment.  IMO, this issue with the payflow gateway of paypal has been done in a sloppy, irresponsible manner.  The chickens will come home and roost.

Kudos to John for his post. In a healthy democracy, state power is derived from the people governed and not from corporations who are extended a privilege to operate within its borders.  If any citizen feels that this democracy is not a healthy one, then I think they should exercise their civic responsibility to work and make it so. Citizenship includes rights *and* responsibilities.  "We the people" is still the rule of law.

Note to eBay Sellers with Credit Card Merchant Accounts   Note to eBay Sellers with Credit Card Merchant Accounts

by: fruity

Tue May 26 16:10:04 2009

Oh and another thing, ebay BOUGHT payflow, it was VERISIGNS PAYFLOW GATEWAY SYSTEM. So they probably just stripped it down to nothing and then put the meat of the gateway into a paid product but with the same name. I'm sure alot of people who used to use payflow verisign would probably have a better understand of the functionality that it contains that ebay/paypal wont fork over. They shouldn't even call it payflow. maybe they're calling it PAYFLOW because then when card associations or their acquiring bank processor gets complaints then paypal can just hand over the payflow docs and pretend it actually has the same security.

That statement where ebay says:"No. eBay provides a set of strong fraud control features that best suit the individual seller. These are the same set of fraud detection and prevention features that we use for credit card fee payments to eBay. This includes velocity checks, eBay credit card blacklists, and account limits. "

That's an understatement because they are policed differently. When we pay them for fees, they are the merchant w/processor. When we pay a seller and go through this payflow, payflow acts as a different role and as such, also has different OBLIGATIONS under their user agreements with those underlying processors.

Note to eBay Sellers with Credit Card Merchant Accounts   Note to eBay Sellers with Credit Card Merchant Accounts

by: fruity

Tue May 26 16:26:18 2009

Bill, do you think the PCI compliance might be why they decided not to build out prostores to be able to do checkout?

Note to eBay Sellers with Credit Card Merchant Accounts   Note to eBay Sellers with Credit Card Merchant Accounts

by: ncwood

Tue May 26 16:55:36 2009

I just tried to sign up for the Payflow gateway to link my merchant account and got as far as where it required you to select your processor. There is a dropdown with about 10 processors, mine was not among them. I talked to the folks at PayPal business support and was informed that if my processor was not on this short list, then I would have to get another processor who  worked with the Payflow gateway.

Next call was to my top-seller ebay rep. She did look into it and let me know that contrary to what Ina stated as her opening line, that eBay was _NOT_ going to require that we use the Payflow gateway.  (shrug)

Note to eBay Sellers with Credit Card Merchant Accounts   Note to eBay Sellers with Credit Card Merchant Accounts

by: John

Tue May 26 21:39:23 2009

@ voodoo

You do a dis-service to every ebay seller trying to get the company to change it's abusive practices. As someone who has lobbied government in the past I can tell you that not only do they listen but if you present it in a professional manner, they bend over backwards to help.

Note to eBay Sellers with Credit Card Merchant Accounts   Note to eBay Sellers with Credit Card Merchant Accounts

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

Tue May 26 23:45:35 2009

@ ncwood

Since none of the fingers on ebafia's right hand even have a clue that there is a left hand, I will trust Ina's reporting over anything anyone at ebafia says.

Inquiring minds want to know whether it's Curly, Mo, or Larry who monitors Auctionbytes 24/7 for ebafia and whether he/she is compensated with actual money or ebafia coupons.

The Steiners must be euphoric to know that Auctionbytes has such power over ebafia management whether ebafia will acknowledge it or not.

Note to eBay Sellers with Credit Card Merchant Accounts   Note to eBay Sellers with Credit Card Merchant Accounts

This user has validated their user name. by: Bill

Wed May 27 02:54:35 2009

Fruity,

Yes I do think that ProStores is not compliant in the way that eBay wants them to be because eBay is not compliant with their so called PayFlow.

ProStores has been going through a lot to become PCI compliant and I think they are dropping the redirect of the PCI compliance that is not available at eBay through the API that they are sending out. Vendio only has redirects on items that are listed from Vendio to eBay so the connection is already set up by Vendio when the item is listed probably through a cookie that is in the listing (that is also how they know that an item sells so they can get their fee for it). Any item that is not listed from Vendio will not redirect period so obviously the API connection is originated with Vendio. ON the ProStores redirect they have now the API is set up on eBay's side and that API is not PCI compliant so that is why they are dropping the redirect. IMHO

Bill

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