Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Tue Feb 13 2018 13:02:49

eBay CEO Says Payments Switch Will Be Like a Big Bang

By: Ina Steiner

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eBay CEO Devin Wenig described the company's forthcoming move to becoming a payments intermediary, saying it would more like a "Big Bang" than like the gradual transition it had made when rolling out its Structured Data Initiative. eBay won't "beg" buyers and sellers to change, he said, and the new way of paying for items will not be optional.

The CEO was responding to questions during a presentation at the 2018 Goldman Sachs Technology and Internet Conference on Tuesday.

eBay had announced 2 weeks ago that after its Operating Agreement with PayPal expires, it would become a payments intermediary. Wenig told Goldman Sachs conference attendees that eBay would announce a date within 12 months of the end of the Operating Agreement (July 2020), "and beyond that date, to transact on eBay, you will need to have new Terms and Conditions in your eBay account and those will include payments. It will be the only way you can transact on eBay."

"It's not going to be optional. We're not going to hold peoples' hands and beg them to move over. We're basically going to say your eBay account is now your full end-to-end eBay account for all your activities including payments. And that's the way it works on every other marketplace."

He acknowledged it would be a significant change for eBay's community, and it would be a significant change for eBay economics as it had already announced. At "steady state," which is when customers have migrated, "it'll be an additional $2 billion of revenue and $500 million of operating income" for eBay, Wenig said. "That's quite a significant change."

Wenig was asked what the reaction to the announcement had been from users. He said it has been "really positive," since buyers will still be able to use PayPal to pay. "Buyers are going to get more choice," he said, as eBay will be able to offer them a lot more choice, including local options. He used the example of Apple Pay in the US. There are a lot of local payment options not currently offered across the 190 countries where eBay operates, he said.

As of sellers, "if we can unify their account; give them one piece of information that links payments to their transaction history; and lower their costs - that's a home run."

So far so good, Wenig said, adding - "Obviously the devil will be in the execution. but I think everybody understands what we're trying to do."

Update 2/13/18: eBay executive Bob Kupens reiterated today that eBay would begin intermediating payments in 2018 "as part of a multi-year journey in streamlining our end-to-end experience." That means some of you may start to see some changes this summer, but beyond limited testing (no more than 5% this year and 10% next hear), the big event won't occur before 2020 due to eBay's contract with PayPal.

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This user has validated their user name. by: eXtinctBay

Tue Feb 13 13:22:48 2018

''Obviously the devil will be in the execution. But I think everybody understands what we're trying to do.''

Yes, Devin, we do understand what you are trying to do. Continue to fleece your sellers for more fees.

''At ''steady state,'' which is when customers have migrated, ''it'll be an additional $2 billion of revenue and $500 million of operating income'' for eBay, Wenig said. ''That's quite a significant change.''''

No where does it mention that eBay will pass along some of this savings to their sellers, as first reported when this was announced.

Of course, we do not expect that fees would ever be lowered. This company needs all the help they can get!!

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This user has validated their user name. by: Ina

Tue Feb 13 13:26:53 2018

The "execution" line caught my attention too.

FYI, he did mention lower seller costs - including what he said in 2nd to last paragraph about impact on sellers" "and lower their costs."  

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by: pace306 This user has validated their user name.

Tue Feb 13 13:28:09 2018

Piece of garbage LIAR that he is.

""It's not going to be optional. We're not going to hold peoples' hands and beg them to move over." THERE IS YOUR SO CALLED PARTNER - DO IT OR ELSE

"It will be the only way you can transact on eBay." BUT WE ARE STILL "JUST A VENUE"

"He said it has been "really positive," NO IT HASNT - YOU OBVIOUSLY DONT READ YOUR OWN FORUMS

" Obviously the devil will be in the execution" ... that DEVIL - OBVIOUSLY DEVIL WENIG ... DUH

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by: Studiolines This user has validated their user name.

Tue Feb 13 13:31:06 2018

@Extinctbay
Will believe the seller savings when I SEE THEM

As of sellers, "if we can unify their account; give them one piece of information that links payments to their transaction history; and lower their costs - that's a home run."

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by: Studiolines This user has validated their user name.

Tue Feb 13 13:34:38 2018

"And that's the way it works on every other marketplace."

Does not work on every other site that way either.

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This user has validated their user name. by: eXtinctBay

Tue Feb 13 13:40:01 2018

@Ina

Sorry, I missed the part where DW mentions lowering seller costs.

But I (or most anyone else) still do not believe it will happen. If they lower fees in one area, they will increase them in another. Or make up more rules which will, in essence, take money out of our pockets.

This history holds true with every Seller Update.

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by: Sierra This user has validated their user name.

Tue Feb 13 13:48:33 2018

Oh, I understand what you're trying to do, Devin; I just hope you get it right the first time.

Unlike many of those who post here on e-commerce bytes, I don't hate eBay or wish them a speedy demise, but I'm also not thrilled with this change.  

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by: FeelingFroggy This user has validated their user name.

Tue Feb 13 13:54:18 2018

Hopefully Ebay will road test this for more than a new york second. I for one agree with Sierra about the demise.

As for the payment part...BRING IT ON. I have enough to worry about without worrying about ebay lowering fees ( ha ha )

All we want to do is sell our product with the least amount of hassle. We don't drain our paypal account daily or monthly. So the time of payment isn't a concern for us. Those that worry about it are living from sale to sale. They need to get a job.

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by: cardfinds This user has validated their user name.

Tue Feb 13 14:37:17 2018

BTW Feelingfroggy, good for you that you don't have to drain your paypal account monthly to pay your bills. Not everyone has that luxury as I am a one man operation which relies on ebay to make my living, so THIS IS MY JOB. I don't have to drain my paypal account daily to pay my bills but don't insult other people might have to!!!!

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by: Bidderboy This user has validated their user name.

Tue Feb 13 15:02:40 2018

Here's the main thing - in the past eBay has not demonstrated itself to be competent nor trustworthy when implementing changes. The uneasiness in the eBay community is due to past experience. It's not the change that has me most concerned. It's eBay's record of technical glitches and over-reaching. This time it will affect our ability to receive payment in a timely and accurate way.

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by: I Must be Crazy This user has validated their user name.

Tue Feb 13 15:04:12 2018

''Obviously the devil will be in the execution. but I think everybody understands what we're trying to do.''

This is where eBay consistently falls short.

Understanding what you are trying to do isn't going to cut it. It's obvious what you're doing; creating a new revenue source. The existing business model is not growing so this is a way to increase profits.

While there is nothing wrong with a company wanting to make money, what does that mean for the customer (Us...the sellers specifically). If it is simply eBay inserting itself into the flow of cash from the buyer to the seller, thereby providing no real benefit other than enriching itself by floating OUR money, then it is a losing proposition for us. It seems there needs to be something that makes the process worthwhile for sellers. Lower costs, maybe? Although I am not clear on how that can be accomplished. Paypal, Mastercard, Visa, Money Gram, all of these companies charge fees for their services. Will eBay not be paying such fees? Perhaps they will receive a discount of which they will pass on a 1/10 of one percent to sellers? Who knows, but I for one don't really grasp the benefits for either side of a transaction. The current process works fine for the most part.

I think, eBay is doing nothing more than getting their hooks onto the money first. They will deduct their fees on a per transaction basis and sit on the net remittance for a period of days. Sure they will throw sellers a bone with some negligible savings, but other costs and fees will certainly rise that will far outweigh any benefit.

Do I want to see eBay fail? No. I hope they succeed. What I don't want is to continue to work harder, while they don't do the job they should be doing, (managing the platform, keep things running, and bring buyers to the site). This latest incarnation is not going to add anything to those measures of performance.

In fact, if history is a guide, it will make things worse.

As a side note: Someone should tell Devin to lose the tough talk. You will do what is going to work for your sellers, who are after all, the only reason eBay exists. You might be able to baffle Wall Street, but it is all BS to us.

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by: pace306 This user has validated their user name.

Tue Feb 13 15:18:00 2018

Its not about "wanting eBay to fail" - its simple betrayal by your supposed partner - time after time, over and over again.

Theres nothing in this announcement thats GOOD for sellers - its whats good for eBay, and eBay ONLY.

When that point in time comes - eBay will have ALL your money, period. They and ONLY they will get to decide how much and when to give it to you. Does that make you (Sierra (as an example) feel all warm and fuzzy?

When in the last DECADE has eBay been honest, transparent and forthright??? Maybe ask the TRSP people who lost %10 "just because" how they feel about their partner "doing what they want when they want"?

Ask the sellers who do "No returns" about a partnership with eBay - or maybe ask that guy who sold an iPhone 7 and got back a Startac how HE felt??

eBay can now (by holding your funds) say "EVERYONE does 30 day returns - or you dont get your money" ... and if that doesnt work for you - what will you do - sue them?

eBay having your money should FRIGHTEN you to death. As well, aping Amazon to assert control - should give you NIGHT TERRORS.

(BTW Im not picking on you Sierra :) )

I know (after being here since 1998) how vicious, rotten, and nasty eBay can be ... if eBay holding your money and forcing you to do what they want is a "good thing" .. pray tell what is a BAD thing?

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This user has validated their user name. by: iheartjacksparrow

Tue Feb 13 17:28:38 2018

Devin says, "And that's the way it works on every other marketplace."

Sorry, no. I sell exclusively on eCrater, and sellers have the option of choosing to accept credit cards through Stripe, payments through PayPal, or checks or money orders. I've never been told to accept a particular payment method or "get lost."

As for Devin's "big bang," I guess that's the part where sellers exit in droves and eBay blows up.

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This user has validated their user name. by: Marie

Tue Feb 13 17:44:10 2018

Ebay isn't the first to do this and they won't be the last.  Amazon and Etsy have required their payment processing to be used, as a seller you have no choice on these sites.  You will use their payment processing programs or you will not be selling on their sites.

Right or wrong, Ebay is just following in their footsteps as soon as they can within the confinement of their agreement with PP.  Since Ebay will have about 2 years or so before it goes site wide, one can only hope that they work out all the bugs before everyone has to deal with the program.

I have no idea if I'm going to like this new payment process.  Ebay has not released much in the way of details on it.  That may be because they have not yet formulated the details, I don't know.  But as time grows closer to implementing the 5% of sellers that will start this off, hopefully they will share the details of the program.

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by: pace306 This user has validated their user name.

Tue Feb 13 20:00:45 2018

Marie :)

Im open to all opinions ....

I find it "funny" that they make a major announcement .. probably the biggest in years (as to the functionality of the system) and yet theres no details ?

Doesnt that strike you as funny? (in a bad sort of way?)

Certainly - they have them - they wouldnt have (even as stupid as DW is ...) created the agreement without details ...

So by definition - either they dont have them (dont believe that), OR they dont want you to know them (evil eBay hiding details like they hide listings) .

Im not "against" eBay taking fees out upfront - Amazon does it - and its fine .... the "real quesiton" at least for me - will eBay use it as a "stick" to hurt sellers more then they are NOW?  I know that you dont know - no one does - since eBay is hidding them - its just sad that your partner ... see Bob Kupcakes blog ... who swears on a stack of bibles a mile high .. SWEARS its all in the sellers best interests ...... Im simply floored at the new level (low level) of eBays lies.

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This user has validated their user name. by: RKTOYS

Tue Feb 13 20:02:20 2018

Really stupid use of "Big Bang" by Dummy Wenig.  The Big Bang was not instant.  Actually, the Big Bang is more associated with rapid expansion (particularly from zero), something that eBay has struggled with due to, well, fools like this that apparently can't read or speak English.  If he wanted instant, there are far better analogies like "flipping a switch" or "waving a magic wand."  As is, the "big bang" that I was picturing was this thug leveling a revolver up against a seller's head and pulling the trigger.  Go fall down a well, Dummy.

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This user has validated their user name. by: toolguy

Tue Feb 13 21:38:46 2018

"Big Bang"

Gun parts are a good selling item on eBay!

They finally let my item be seen and it sold with in 24 hours. . .

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

Wed Feb 14 00:14:35 2018

I really hate to to make an ad hominem attack, but Devin Wenig is a lying, arrogant SOB of the first magnitude. At least The Ho never made any pretense of wanting to improve things for small and medium sellers which is the best thing I can say about him.

On the other hand, this B school jargon spewing corporate thief spoon feeds lies and puffery to Wall Street and seems to get away with it.

He doesn't get away with it here.

Perminate Link for eBay CEO Says Payments Switch Will Be Like a Big Bang   eBay CEO Says Payments Switch Will Be Like a Big Bang

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

Wed Feb 14 00:15:40 2018

@Toolguy

I thought you said ebafia NEVER hides your listings.

Are you back on the weed?

Perminate Link for eBay CEO Says Payments Switch Will Be Like a Big Bang   eBay CEO Says Payments Switch Will Be Like a Big Bang

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

Wed Feb 14 00:16:47 2018

@RKTOYS

Wenig knows as much about cosmology as he does about ecommerce.

Zero.

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