EcommerceBytes-NewsFlash, Number 1952 - January 09, 2009     1 of 5

eBay Payment Changes Move It Closer to Amazon Model

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eBay is making changes to its checkout system that will ultimately force buyers to enter payment information through its checkout system. The changes could mean the end of deadbeat buyers and give eBay the kind of insight has through its practice of processing payments on behalf of merchants. It appears eBay will continue to allow some third-party checkout systems for the immediate future.

When eBay implemented its ban on paper payments in October, it disallowed most online payment services previously allowed under its Accepted Payments policy. AuctionBytes reported on Thursday morning that PayMate would be integrating with's checkout system in February, and eBay announced later in the day that MoneyBookers would also be allowed on Currently eBay sellers are limited to offering eBay's own PayPal service, third-party service ProPay, or credit cards through the sellers' own merchant accounts.

By integrating ProPay, PayMate and Moneybookers into the checkout process, eBay will know whether a buyer has completed payment. On Thursday, eBay announced that sellers who have their own merchant accounts will be required to sign up for a Payflow Gateway account in March to connect their account to eBay. This will allow buyers to pay sellers directly to their Internet merchant account by entering their credit card information in eBay's secure checkout instead of sending information via phone or email. eBay will make available Payflow Gateway accounts for those sellers with a merchant account at no additional cost. (The move will also help to make sellers compliant with credit card industry standards known as PCI-DSS.)

eBay sellers commonly complain of deadbeat buyers and the unwieldy process of filing Unpaid Item reports, as well as the retaliatory negative feedback they receive from non-paying buyers. By integrating electronic payment services into its checkout system, eBay could keep a fixed-price listing from ending in cases where the buyer does not immediately pay during the checkout process (as is the case on retail websites and marketplaces such as and Overstock).

eBay made additional announcements in Thursday's post: in some cases it may remove a seller's negative feedback for refusing to sidestep customs fees at the buyer's request (see website for details), and it reminded sellers of new policies and the deadlines for compliance.

eBay said it would hold a Town Hall meeting on January 14th from 3-5pm Pacific.

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About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to

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