Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Fri Mar 2 2012 10:23:47

eBay Moves toward Amazon Model of Payment Processing

By: Ina Steiner

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In a radical shift, eBay is removing third-party sellers from the payments process in Germany, it announced this week. Online marketplaces have different ways of handling buyer payments - Amazon.com processes payments on behalf of its third-party sellers, for example, while eBay lets buyers pay sellers directly, though it controls which payment methods are allowed.

As EcommerceBytes reported in September, eBay Germany began testing a new process in which it processes payments from shoppers, and then forwards the payments to the seller - a similar, though not identical, model to one Amazon.com uses for third-party sellers on its marketplace

eBay Germany spokesperson Maike Fuest told us at the time that the marketplace was running a pilot test with new users on eBay.de and eBay.at (Austria). According to a report from the AIM Group this week, the test is coming out of pilot mode in Germany (but not Austria) and will be enforced for business sellers later this year.

Not only will eBay sellers in Germany have to wait for their reimbursement for transactions from eBay, they will also pay higher fees, according to AIM Group. "EBay will finance some of the extra cost by raising (by two percentage points) the sales commission payable by professional sellers (not private sellers) to EBay on transactions," AIM Group wrote.

But presumably sellers will not pay PayPal fees for transactions in which the buyer is paying eBay Germany, not the sellers themselves.

Many online sellers do not like waiting for payment until items are shipped for a number of reasons, including cash-flow issues. Sellers on Amazon.com accept its payment-processing model in part because it reduces communication with buyers, and it prevents the problem of deadbeat buyers who order items but fail to pay the seller.

After reading about eBay Germany's pilot test in September, one seller asked on the AuctionBytes Blog, "Would a single, unified, and integrated payment procedure help to identify, eliminate or restrict the habitually troublesome buyers who are slow-payers or non-payers?" But many others were skeptical the policy would benefit them.

It's been a big week for sellers on the eBay platform as the company announced its first seller release of the year. New policies challenge sellers to act more like a retailer and less like an auction or casual seller, with carrot-and-stick incentives for them to offer generous return policies, quick handling time, more professional looking photos, and less communication with buyers.

eBay sellers call such moves the company's attempt at "Amazonification," and many question why eBay would want to go head-to-head with Amazon rather than exploiting its roots as a C2C marketplace.

This week's announcement from Germany could eventually have consequences for eBay sellers worldwide and could push many smaller sellers off the platform, and it has the potential to change eBay's "venue only" status.




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by: Patricia This user has validated their user name.

Fri Mar 2 12:14:20 2012

I hope they're joking!  I've sold on Amazon...they take care of accepting the payments and then deposit them into my account...BUT they make few if any errors and it really does take the pressure off of a seller getting paid.  With Ebay it will be constant "glitches" whenever they need our money!  The fool no one!

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This user has validated their user name. by: Philip Cohen
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Fri Mar 2 12:34:51 2012

Well, if the Ho takes eBay’s payments business away from PreyPal, by eBay doing it themselves, that effectively will be the end of PreyPal: Visa’s V.me will finish off PreyPal outside of its previously protected position on the eBay marketplace.

Then, who know what is in the vacuous brain of the eBafia Don? If he’s considering an IPO for PreyPal: he’d better hurry up and do it before V.me gets going. Regardless, I doubt such an IPO would be such a success: You can judge by eBay’s share price performance that Wall Street recognizes that eBay is going nowhere under the current headless turkey, Donahoe.

"When Do We Start Calling eBay A Payments Company?"
A tale of two clunky, unprofessional commercial entities: eBay and PayPal

http://bit.ly/wpl5DT

eBay / PayPal / Donahoe: Dead Men Walking

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by: 10 year seller This user has validated their user name.

Fri Mar 2 12:46:56 2012

''it prevents the problem of deadbeat buyers who order items but fail to pay the seller''

At least this should help eliminate negatives from people who don't even pay. A crazy idea that never should have been allowed.

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This user has validated their user name. by: Ric

Fri Mar 2 13:37:47 2012

While we have been rolling with the body blows eBay has been inflicting upon sellers since 2008, a move to this payment process in the US would be the straw that breaks the camel's back.

It is bad enough that we have to regularly increase prices to cover eBay's constantly increasing fees as well as postal rate increases.

We have adapted and survived eBay's onerous policy changes which are designed to destroy small sellers, we still maintain TRS and 20% discount and we expect to be able to do so even with the Spring Seller changes.



The problem with slow pay and no pay buyers would not go away because the company would now be collecting payments from buyers. eBay corp does not have the mind set to educate buyers. As eBay's Jim Griffith said the other day '' Buyers have indicated they do not want to be educated''.



We will not accept paying higher fees and having PayPal dole out our payments on whatever timetable suits them, and we certainly will not accept higher fees for being forced into that process.

If they were to impose another increase in PayPal fees accompanied with a delay in transmittal of payments, the double slap inflicted by eBay corp would push us right out of the eBay marketplace. That would mean no more selling on eBay, no more buying on eBay, and immediate closure of our PayPal accounts.

We have been with PayPal and eBay long enough to know that over time they will gradually increase the delay with which they clear payments to seller accounts so they can hold on to our funds longer.

I am a one man operation. I have the time to acquire inventory, create listings, process orders, ship on a 1 day turn around and handle customer service.

What I do not have time for is following each and every payment in PayPal until they get around to processing the payment into my account,or monitoring tracking status to compare against release of payments. Given the inevitable glitches which are synonymous with eBay and PayPal, I do not have the time it will take every time payments are delayed because their systems fail to function properly.



A move by eBay/PayPal to a delayed payment model would be the motivation needed to get me to stop feeding the hand that bites me once and for all... no more eBay, no more PayPal.

Until they force me to pull the plug, I will continue to compile email addresses of every eBay buyer and utilize that database more aggressively to divert eBay traffic to our listings on other sites.

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by: Tired of eBay's Bullsh*t This user has validated their user name.

Fri Mar 2 14:05:48 2012

@ Ric

Me2. It is bad enough dealing with the BS eBay inflicts -- much of which is possible because of the power it wields as owner of Paypal, but this is too much.

Coming soon I suspect...

Mandatory 60 or 90 day returns ... which will probably mean eBay holds your money for 75 to 100 days.

I could live with eBay automatically transferring funds via ACH into my bank account 2 days after I upload tracking number. But that's my limit, more than that and I close my store and go exclusively with Ruby Lane and Google Checkout.

- Tired of eBay's Bullsh*t

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

Fri Mar 2 15:33:30 2012

Ebafia's sociopathic management and their death march toward the highest e commerce prices on net means the end is that much nearer.

They're committing suicide one fee increase at a time.

DEATH TO EBAY CORP.

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by: Patricia This user has validated their user name.

Fri Mar 2 15:35:37 2012

Long ago I started putting information about my website and business cards into everything I've sold on Ebay.  It does work and takes almost no extra effort!

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by: pace306 This user has validated their user name.

Fri Mar 2 16:37:15 2012

This is the issue Ive been speaking about for months - but no one listens. eBay in order to duck the oncomming law suits created by the illegal Paypal holds, will follow Amazons lead in taking the money for you - and then giving you what they feel is yours, when they feel like giving it to you.

Paypals outlook for the future (it was decided over a year ago) can not and should not rely on the ''whims'' of eBay.

Ebay buyers/sellers consume too many resources (cs agents etc) and the future they think is micropayments by large companies ala Lowes.

SR1 is nothing compared to what is comming ...

Be prepared - get your own website, share one with someone, get a Yahoo store, do SOMETHING - or you will never forgive yourself when the ''ebay winter'' comes!

Perminate Link for eBay Moves toward Amazon Model of Payment Processing   eBay Moves toward Amazon Model of Payment Processing

by: 10 year seller This user has validated their user name.

Fri Mar 2 16:57:58 2012

Ebay is using small sellers money to fund the transition into a new platform that will dis-allow small sellers.

The large retailers on ebay don't want the competition from small sellers who have much better feedback and customer service that they do.

It's very funny to see the ebay ''BEST VALUE'' pictures above my ended auctions. My prices are always better.

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by: Tired of eBay's Bullsh*t This user has validated their user name.

Sat Mar 3 03:01:02 2012

@ Patricia, "Long ago I started putting information about my website and business cards into everything I've sold on Ebay.  It does work and takes almost no extra effort!"

Been said here many times, but worth repeating...

If you do nothing else, GET A DOMAIN NAME and make sure that every box you ship contains something in it with your domain name, be it a biz card, pen, or whatever.

Even if you have no technical web know-how, even if you are (for the moment) only selling on eBay, make sure your customers have your domain name.

Go to GoDaddy.com right now and get a name, set your GD control panel to "point" to your eBay store (for now). If you open a store at Amazon, Ruby Lane, or wherever, it takes all of about 60 seconds to re-point your domain.

If someday you build a webstore form scratch ... well, you'll be that much ahead with traffic.

A domain name is the best $10/year you'll ever spend.

Forget about EVER listing your eBay store URL on anything -- list your domain name.

- Tired of eBay's Bullsh*t

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This user has validated their user name. by: Nan
Web Site

Sat Mar 3 10:29:07 2012

@Patricia
@Tired
>>>If you do nothing else, GET A DOMAIN NAME and make sure that every box you ship contains something in it with your domain name, be it a biz card, pen, or whatever.

Yes Yes Yes!
Also, find a free program that will let download a template to   create your own invoice/packing slip (I use MS Office, Excel has a bunch).  Where you can put your own business name, logo, email and domain name.  Use it instead of the eBay or PayPal packing slip.

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This user has validated their user name. by: TrentDep

Sat Mar 3 10:45:57 2012

I really shudder to think of the abuse this will nurture - as it is, my Paypal funds are ( sort of ) safe from Ebay's prying hands - this model would put a complete end to that...

Paypal avoids a lot of consumer ''problems'' because - well - they're not teally a bank, after all... Can you imagine the abuse once they are nothing but a holding company for Ebay transactions?

Ebay has avoided the 1099k fiasco so far - they do not issue payments, and therefor were able to avoid reporting requirements...  Considering that Paypal was absorbing all of the cost of processing the 'ks, with much of the activity originating from Ebay, it makes sense to integrate them for this reason alone.

Toss in the ability to hold onto my funds to cover whatever the latest mandated return policy might be, and this was fruit just too ripe to resist for a company seeing diminishing returns.

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This user has validated their user name. by: Nan
Web Site

Sat Mar 3 10:48:07 2012

Re eBay Payment Processing.

I'm sure eBay will tell us it is a great idea for sellers because they will take the headaches out of collecting payment from the buyers, slow payments, late payments, no payments at all.  

I'm an Amazon seller, and Amazon does it very well, it runs smoothly, it's headache free, I can collect my money as often as I want and I have no problem with it.

But that's Amazon.

eBay is no Amazon.

Amazon's payment processing service has been the same for years with no changes.
eBay will change it once a month and cause sellers to scramble to adjust.

Amazon consistently charges the same processing fee, and I can adjust pricing for it and be done with it.

eBay will add all sorts of provisions (riders, if you will)  for Powersellers, for FLD's, for free shipping, for full moons. . .

Thanks Ina, for bringing this out in the light.  I'm sure they though it would get buried in the new SSR2012.

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This user has validated their user name. by: Tula

Sun Mar 4 14:42:10 2012

@pace306:
"taking the money for you - and then giving you what they feel is yours, when they feel like giving it to you."
--Sounds like the government, LOL!

The thing that concerns me about this is the higher fees. Why, if they're trying to get more commercial or professional business sellers, would they raise the fees on that group and not on the casual sellers? That's how things work in the rest of the industry.

I wouldn't mind this if it was handled as smoothly as Amazon's and didn't cost me more money. Why should fees go up when it's essentially the same process as Paypal is doing now? It would be saving eBay money since they wouldn't have to deal with merchant account integration any more. Plus they would then have full control over the unpaid item issues. I would definitely welcome not having to deal with NPBs. I'm a bit leery, though, of the returns issue. With eBay holding all the payment control, it's far to easy for them to automatically refund things. I guess I'll just wait and see if it comes to the US.

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This user has validated their user name. by: Philip Cohen
Web Site

Sun Mar 4 15:37:59 2012

@Tula,

I see you are having trouble recognising an eBay  fee "decrease" ...

eBay / PayPal / Donahoe: Dead Men Walking

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This user has validated their user name. by: Bijoux Dragon
Web Site

Tue Mar 6 10:56:07 2012

One thing here caught my eye  ''...while eBay lets buyers pay sellers directly, though it controls which payment methods are allowed.''

This is at best a quarter truth.  At my Ruby Lane and Ruby Plaza shops, customers regularly send checks and money orders, some pay through Google and one Canadian customer sends Canadian dollars (I live near Canada and visit there - saves me getting cash).  Ebay restricts all of these methods, thus controlling the payments I am accept and preventing many of the popular payment methods.

Amazon processes smoothly and with no errors - I have sold there for 8 years with never a mistake.  Ebay cannot even get through a year of monthly invoices without errors.  'Nuf said!

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by: Moonwishes This user has validated their user name.
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Tue Mar 6 15:08:37 2012

Every time I see yet another ebay idea that is bad for sellers (they all are), I'm so glad I jumped ship 3 years ago and sell on ecrater. I use PP and GCO but would prefer another choice for payment processing. I lost an order today from a customer that couldn't get PP to work for her with her credit card and she has an account with them. Having only two options for electronic payment processing is one of the few things that I would change about ecrater, otherwise it is a great place to sell on without any ebay stress. I too agree with having your own domain name prior to leaving ebay so that the minute you turn your new website on your customers will come to you and not ebay.



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