PayPal Required on eBay UK - Coming Soon to eBay.com?

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Ina Steiner

AuctionBytes Blog
News and insight focusing on
ecommerce and the online auction industry
by Ina Steiner, Editor of AuctionBytes.com

March 24, 2008

PayPal Required on eBay UK - Coming Soon to eBay.com?

By: Ina Steiner

Mon Mar 24 2008 024:52:19

After banning sellers from accepting Google Checkout when it launched, eBay told its UK sellers today that they must now accept its own payment service PayPal on all listings. eBay said the policy would help reduce fraud and "boost buyers' confidence."

eBay UK is also implementing a "Payment Hold" policy in which its online payment service PayPal imposes a 21-day hold on transactions in certain circumstances it identifies as high-risk. In a write-up of the policy in Fortune Small Business when it was announced on eBay.com, the magazine wrote, "Because PayPal has sole discretion over whether to freeze funds, sellers are upset about a perceived lack of accountability."

No doubt eBay sellers outside the UK will wonder if eBay will impose this policy elsewhere. eBay.com sellers are restricted by the Accepted Payments policy but still have the option of not accepting PayPal. Is eBay UK's policy a sign of things to come for US and Canadian sellers?

Comments (45) | Permalink

Readers Comments

PayPal Required on eBay UK - Coming Soon to eBay.com?

by: Paul

Mon Mar 24 09:16:13 2008

It's time to add a bigger handling charge to S&H (or P&P) and then a corresponding discount for payment methods other than PayPal.

PayPal Required on eBay UK - Coming Soon to eBay.com?

by: Keith

Mon Mar 24 09:22:51 2008

Problems for those sellers who offer collection in person. There's no trackable means of delivery in case of a Paypal dispute

PayPal Required on eBay UK - Coming Soon to eBay.com?

by: Gaz

Mon Mar 24 10:28:25 2008

And this in the middle of the unresolved live bugs related to buyer messages not appearing on PayPal emails, and too many buyers having recently renewed cards causing a flood of echeques because their new cards are unverified.

Great stuff eBay - continue to punish the people who pay your wages, and soon you'll have no wages.

PayPal Required on eBay UK - Coming Soon to eBay.com?

by: Gene

Mon Mar 24 11:32:20 2008

They are trying this in the UK so you can bet the US is next.
Listings that have PP but ask for other will be removed if reported.

PayPal Required on eBay UK - Coming Soon to eBay.com?

by: Steve

Mon Mar 24 11:38:08 2008

Does eBay ever get tired of insulting our intelligence? I feel that this has nothing to do with fraud, but it has everything to do with putting more money in eBay's coffers. Why does eBay continue to treat the sellers' buyers like they are their own customers when they are the customers of the sellers. Ebay, the SELLERS are your customers!!! Sellers should be able to choose any payment instrument they wish including Google checkout.

Ebay wants to control every aspect of the sellers' transactions, and by forcing sellers to use PayPal that gives them a major amount of control over the transaction itself and a gigantic boost in revenue.
Since this is only being done in the United Kingdom at the moment I feel that they are testing the waters. If it flies be sure that it will be implemented elsewhere.
The layers upon layers of rules, regulations and the micro-managing just never stop at eBay nor do the innovative means of bringing in another dollar bill. Does the company have no self awareness at all? One only has to read the press and blog comments to realize that they are viewed as being avaricious and more controlling than a dictatorial government.

PayPal Required on eBay UK - Coming Soon to eBay.com?

by: donnellwells

Mon Mar 24 11:42:45 2008

IS THIS LEGAL? WHAT ABOUT ANTI-TRUST LAWS.
THIS IS FORCING US TO USE A METHOD THAT ALSO USES ANONYMOUS RATINGS TO DECIDE WHETHER OR NOT THEY CAN WITHHOLD PAYMENT FOR 21 DAYS.
THE WORD FOR THIS IS THEFT BY FORCE-
REVOLT NOW!
SINCE IT IS SUCH A REVOLTING NEW POLICY.
UNREAL!
DW

PayPal Required on eBay UK - Coming Soon to eBay.com?

by: JH

Mon Mar 24 11:50:29 2008

Easy answer...eBid.net!
Free to list, free to buy & accepts a range of pay options, including Google Checkout.

PayPal Required on eBay UK - Coming Soon to eBay.com?

by: Louis

Mon Mar 24 12:06:54 2008

I cannot believe this can possibly be legal for them to force us to use and pay for a service they own and control. An analogy would be if my ISP forced me to use their browser and charged me separately for it.
Totally unreal!

PayPal Required on eBay UK - Coming Soon to eBay.com?

by: m varrone

Mon Mar 24 13:24:48 2008

All Paypal fund transfers are based on working/business days.If the 21 day hold policy is based on working days-it will significantly extend the length of time until payment is released;as much as 5 weeks.
It is also unclear as to when Paypal will notice the seller that their funds have been held.Will notice arrive in tandem with buyer's payment or within an undisclosed period?
There clearly is no need to define ever changing ebay rules,when no other payment options are permitted.

PayPal Required on eBay UK - Coming Soon to eBay.com?

by: Beady Eye Guy

Mon Mar 24 13:27:51 2008

Donnellwells:

Yes, it's legal. While I am far from an Ebay apologist (quite the contrary) I believe they can require their service on their platform. Legally, they will change the TOS and for those who don't agree, like a credit card for example, the account can be terminated.

They can do whatever they want on their platform and we either accept it or leave I guess.

I see this getting bad very quickly.

PayPal Required on eBay UK - Coming Soon to eBay.com?

by: Beady Eye Guy

Mon Mar 24 13:33:03 2008

It's perfectly legal for them to require it. It's no different from a gas station taking cash/debit and no credit cards. If anything Ebay is hurting themselves when so many other platforms exist to sell merchandise.

What I find questionable about all this is the 21 day hold nonsense. THAT could be viewed as questionable as they aren't a bank and they aren't a licensed financial institution (payday loans for example have to follow certain rules).

If somebody wanted to challenge Ebay, it could be in this new 21 day policy. As for requiring it on Ebay, face it they can require whatever they please on their selling platform. Look at Amazon...they only have Amazon payments for sales in the marketplace. Overstock has it's rules, etc.

Legality is not in question regarding what they require it's member sellers to accept for payment. NOW if they disallowed us from processing our own transactions via our websites, processors, etc OR stopped us from accepting checks/money orders THAT could be viewed as antitrust.

PayPal Required on eBay UK - Coming Soon to eBay.com?

by: Ruth

Mon Mar 24 13:45:21 2008

No, it's NOT legal. It's called a tying arrangement and it's a violation of the Sherman Act. No buyer or seller should be required to use Paypal as a stipulation of using eBay. That violates anti-trust laws. And not allowing Google checkout tells me all I need to know about how sleazy eBay has gotten. They are trying to force shady Paypal on everyone, while at the same time blocking any real competition to it's payment service. Not ethical or legal, period.

PayPal Required on eBay UK - Coming Soon to eBay.com?

by: steve

Mon Mar 24 14:04:04 2008

Per Ruth's statement and credit for this comes from LegalDicitionary.com

When a seller conditions the sale of one product on the purchase of another product, the seller has set up a Tying Arrangement, which calls for close legal scrutiny. This situation generally occurs with related products, such as a printer and paper. In that example, the seller only sells a certain printer (the tying product) to consumers if they agree to buy all their printer paper (the tied product) from that seller.

Tying arrangements are closely scrutinized because they exploit market power in one product to expand market power in another product. The result of tying arrangements is to reduce the choices for the buyer and exclude competitors. Such arrangements are per se illegal if the seller has considerable economic power in the tying product and affects a substantial amount of interstate commerce in the tied product. If the seller does not have economic power in the tying product market, the tying arrangement is judged by the Rule of Reason. A seller is considered to have economic power if it occupies a dominant position in the market, its product is advantaged over other competing products as a result of the tying, or a substantial number of consumers has accepted the tying arrangement (evidencing the seller's economic power in the market).

PayPal Required on eBay UK - Coming Soon to eBay.com?

by: Carolyn

Mon Mar 24 15:00:11 2008

So if this action comes to Ebay.com are we ready for a class action suit? I am sure that their is a lawyer among us willing to enter into this fight.

PayPal Required on eBay UK - Coming Soon to eBay.com?

by: Beady Eye Guy

Mon Mar 24 16:11:21 2008

You guys are reading too heavily into the Sherman Act on this. Again, I AM NOT a fan of Ebay (so spare me the attitudes, please) but Ebay's argument is they allow the seller to collect checks and money orders from the consumer. A selling platform with a TOS to match is NOT breaking a law here.

Using your arguments, why can't I make Amazon take Google checkout or Paypal when a customer buys my items there? I know that when I agreed to THEIR terms of service, I accept THEIR rules for payment.

Ebay, right or wrong here (wrong IMHO, FYI) will win a legal challenge here. Mark my words...they have an easy counterargument to you, they allow you to collect checks and money orders. IF they say you can't offer a discount to those who send a m.o. or check, THEN I can see a legit case of antitrust here.

PayPal Required on eBay UK - Coming Soon to eBay.com?

by: roo

Mon Mar 24 18:46:56 2008

It seems that ebay continue to abuse it's position having a virtual monopoly, when the day comes for Google Auctions to be launched they will be reaping the rewards of such poor treatment of sellers.

PayPal Required on eBay UK - Coming Soon to eBay.com?

by: BeBopDeluxe

Mon Mar 24 20:01:37 2008

Maybe Ebay UK will have a boycott of their own! They should, as this is one more strong arm tactic to control sellers and squeeze sellers for more money.

PayPal Required on eBay UK - Coming Soon to eBay.com?

by: Ruth

Mon Mar 24 20:53:40 2008

Beady Eye Guy, you are missing the point. They are forcing ALL UK sellers to accept Paypal or they cannot sell on eBay. That is a tying arrangement, since eBay and Paypal offer totally different services. EBay is a venue where sellers list their items and Paypal is a payment service. There is no valid reason why any seller should have to accept Paypal in order to sell on eBay. Allowing sellers to also offer to accept checks and money orders is not relevent. If a UK seller wants to use eBay, they MUST accept Paypal as well. That is the EXACT definition of a tying arrangement. EBay and Paypal are two seperate companies and one should not have to accept Paypal to sell on eBay.

PayPal Required on eBay UK - Coming Soon to eBay.com?

by: Ruth

Mon Mar 24 21:09:27 2008

Here's what's wrong with this new eBay policy. Any seller who had a previous problem with Paypal will now be banned from selling on eBay. Doesn't matter if that seller has been listing on eBay for ten years, has 10,000 feedbacks and a 99.9% positive feedback rating. Won't matter. If Paypal does not want to do business with that seller, they are history on eBay. That gives Paypal WAY too much bargining power if a seller has a dispute with Paypal. I know many sellers who've had their accounts closed because of what paypal deemed to be "excessive" chargebacks. Paypal claimed they were a "high risk" and closed their accounts. That's perfectly legal. But to ban a seller from eBay over a Paypal problem is NOT legal. They cannot ban an honest seller on eBay because they had a problem with Paypal. Not legal at all.

PayPal Required on eBay UK - Coming Soon to eBay.com?

by: SandyPurrinsBytes

Mon Mar 24 21:30:28 2008

The key to this deal is eBay not allowing Google checkout. That is a perfect example of restraint of free trade and blocking competition to Paypal. Have you ever seen some of the bogus payment services that eBay allows? I've never even heard of most of them. So why on earth wouldn't they allow Google checkout? It's an actual challenger to Paypal, that's why. And what about sellers who have merchant accounts and therefore don't need or want Paypal? Is eBay going to claim those sellers are not safe to deal with so they must offer Paypal or leave eBay? Give me a break. EBay gets more sleazy and corrupt by the day.

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