Critical Test for eBay's PayPal-Only Policy

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

May 09, 2008

Critical Test for eBay's PayPal-Only Policy

By: Ina Steiner

Fri May 9 2008 10:45:50

The Australian government must decide whether eBay's proposed PayPal-only policy is anti-competitive and, if it is, whether the benefits outweigh the cons. Its decision could be a litmus test for eBay, which has not ruled out the possibility of rolling out such a policy worldwide.

PayPal President Scott Thompson told AuctionBytes this week that while the Safe Payments policy in Australia is not a "foreshadowing of things that we intend to do elsewhere," he left the door open to such a move. "We certainly have not announced any plans to bring Safe Payments - other than PayPal-required for listings in the UK - we haven't announced Safe Payments anywhere else in the world, and we're not in the position to do that today."

Australia's top banks joined eBay sellers in weighing in on the case. The latest developments in the story are covered in today's AuctionBytes Newsflash newsletter.

I found the timing of eBay's March promotion to top sellers significant. It offered free Final Value Fees and rewards of up to $10,000 for sellers who offered PayPal in their listings. I don't remember ever seeing a promotion like that one.

Comments (33) | Permalink

Readers Comments

Critical Test for eBay's PayPal-Only Policy

by: Terry

Fri May 9 11:33:41 2008

Its about time Paypal should be the only payment service. Just wish it was started on the USA site first.

It's ebay's site, they can make whatever rule they want, and should be allowed to enforce it.

Sellers are not forced to sell on ebay, but they think they have the right to tell ebay how they want it.

If they have a problem with ebay and Paypal, moved on to all those other auction sites that have 1. No Traffic.
2. No Sales. 3. No bids 4. No web server space. 5. No nothing.

Also, think of all those Hobby sellers that will get a Form 1099, from Paypal each year to include that income on thier Income Tax form.

And I'm still listing on the BEST site there is today anywhere in the world.

Critical Test for eBay's PayPal-Only Policy

by: Steve

Fri May 9 12:22:31 2008

Wrong Terry, eBay can not make up any rule they want. What they are trying to do is called a tying arrangement and it is illegal (at least in the United States) under the Sherman act.

I love you folks who say "if you don't like it move own". People have every right to use any service that is public and this is one that they pay to use ebay. They ARE NOT eBay employees. Just because they stand up and cry fowl when a monopoly tries to take away their payment options for no other reason but to increase the company's revenues doesn't mean they should move on. These same people built this company with their hard work and dedication.
Simon Smith's statement "We're not allowing people to offer unsafe choices, just like in this democracy you can't go out and buy heroin on the streets" is about the worst analogy I have ever heard. It ranks right up there with "It's for the children!"
Ebay's move is pure greed.

Critical Test for eBay's PayPal-Only Policy

by: Shadow Fire Promotions, Inc.

Fri May 9 12:29:11 2008

While we certainly disagree with ebay being the best at anything, we DO agree that it's ebay's site to do as they please, although it's up to lawmakers to decide if they are stifling competition, which we believe they are.

However, your comments on other sites having no traffic, no sales, no bids, no web server space, and no nothing could not be further from the truth. First off, if they didn't have sales and web server space, they couldn't run. If they had no bids, people wouldn't go there. There's a startling lack of logic there.

People go to ebay not because it's the best, but because it's big and they don't know of anywhere else. We don't sell on ebay, except on rare occasions, and certainly nothing of high dollar value, because we can make better money elsewhere. However, as ebay DOES cheez off it's members that have been faithful, they will learn that not only are there other auction sites, but that selling it yourself on a website isn't that hard.

All auctions, with the exception of reserve auctions, which are illogical in and of itself, have an inherent risk of not getting the price you want. Reserve auctions are illogical, since it (at first glance) misleads people to believe they can get something at a low price, but you don't and have to bid to the price a seller wants. Does it generate more traffic? Sure. Is it logical in terms of selling? No, because if you don't want it to sell for lower than a set price, then just list it at that price. It's the exact reason we don't use auctions. Our merchandise is far too valuable to list at an auction. Additionally, between fraudulent bids, non-paying buyers, and the bs system of ebay making you wait for payment, (or in the case of the often-hacked, very insecure Paypal), holding payments, it's just not worth it.

Need evidence that Paypal is an unsecure payment method? If you have an e-mail address that is published anywhere online, whether it's ebay or anywhere else, see how many spoof mails you get from Paypal. Whereas we have been using other payment systems for many years (WITH a published e-mail!) and have NEVER been spoofed with any other payment system. Oh, and of course, ebay's frequent blackouts, and their ridiculously lax refund system. It's quite clear that ebay has to insist you use their payments only, because the bottom line is that they know they cannot be the best. They lack the knowledge and they lack the ability to be the best. When you are the best, you have nothing to fear, because everyone will use you, even amongst heavy competition. When you are not the best, and are at the bottom of the heap, you have to force people to use you, because you know there is no way people would use you given a choice otherwise.

Critical Test for eBay's PayPal-Only Policy

by: Ming the Merciless

Fri May 9 12:41:59 2008

I wonder which ebay division 'Terry' works for.

Keep it up, ebay. Keep your minions posting insults directed at your customers (sellers). It also is illustrative of the caliber and character of employee ebay prefers to hire which is typically a reflection of the executive corporate culture.

There are now so many nails in the ebay coffin that the wood has already begun splintering.

Critical Test for eBay's PayPal-Only Policy

by: tula

Fri May 9 12:56:08 2008

I think it would be great for eBay to mandate credit card only payments, however I don't think that sellers who have their own merchant accounts should be forced to use Paypal. I know that some merchants give you discounts for volume, so forcing Paypal would cost them more money. I'd also like to see Paypal registered as some form of bank with federal oversight, to help prevent abuses. The reason monopolies are frowned upon is because once there's no competition, it opens the door to abuse by the monopolistic party (which some have argued is already occurring).

That said, I've never had any problems with Paypal, either as a buyer or a seller, but I know others have. It certainly is the easiest way for me to make and receive payments on eBay. This is an entity that handles a whole lot of money (including mine) every day, so I'm watching this situation closely.

Critical Test for eBay's PayPal-Only Policy

by: eBay scare tactics

Fri May 9 13:17:32 2008

eBay's PayPal only policy is an attempt to increase their revenue nothing more.

eBay is using fraud and security as a scare tactic in an attempt to monopolize the online marketplace.

If it was truly about fraud and security eBay would have been following up on the millions of reports from it's users all these years to combat this problem, instead eBay/PayPal has turned a blind eye to these reports solely because they profit from them.

There is much more going on behind the scenes than eBay/PayPal is willing to admit. Find out what is really going on behind the scenes look into the facts eBay does not want you to know about.

Critical Test for eBay's PayPal-Only Policy

by: angryjim

Fri May 9 13:36:47 2008

Terry - your last name would not happen to be Goebbel$, would it? And by chance you would not happen to be employed at the eBay mini$try of propaganda out in $an Ho$e?

If eBay is just a "venue" as they claim to be they really should have no interest in how payments are made by users of their site. I think it is time eBay decided whether they are either a commerce website or a payment service company. There is an all too obvious conflict in them trying to be both.

The greed of this company knows no bound$. Heil Donahue!

Critical Test for eBay's PayPal-Only Policy

by: Lisa

Fri May 9 15:29:12 2008

Amazingly enough, there is life after eBay. I boycotted eBay back in February and have not been actively buying or selling there. Now when I want to purchase something, I search the web for it. I have found some amazing deals - much cheaper than eBay. Etsy is one example, but I could name more. I am extremely happy with my purchases elsewhere. BEST OF ALL, I've made sales elsewhere!! No eBay fees, WOOHOO!!!

Critical Test for eBay's PayPal-Only Policy

by: VE

Fri May 9 16:08:40 2008

Greedbay.
1. No Traffic.
2. No Sales. 3. No bids 4. No web server space. 5. No nothing.

Ebid
1. More & more traffic each day going to Ebid.
More & More traffic after each greedbay change.
2. I am getting sales more on Ebid than on greedbaybay at the moment. My sales dont go geographic areas on Ebid as they have been doing for a long time on greedbay.

3. No bids, I must have had bids to have sales on Ebid.
4. No Geographic locational sales on Ebid, My items are being found throughout the U.K. and International Countries.
5. Great Customer Service on Ebid, with no rebotic responses.
Less fees. Only pay if item sells.
No paying over & over for the same item to be shown on Ebid, unlike greedbay due to the new best match search, Geographic locations.
Various payment options, no forcing of a payment service owned by the same company.
Reports are dealt with quickly.
Friendly helpful board posters.

IMO as ebay evolve from an auction site into an Internet Mall advertising Big Companies goods, Ebid will go from strength to strength.

Critical Test for eBay's PayPal-Only Policy

by: mark

Fri May 9 18:19:14 2008

eBay has good reason to fear a major development in Europe: the single Euro payments area or SEPA. Bank transfers in for example Germany are extremely efficient and free of charge already. Real time electronic bank transfers is what many Europeans are used to these days. So why use Paypal in Europe? With SEPA payments between countries will become even more streamlined (and still free!). My guess is that eBay tries Australia now to use that experience for Europe. As soon as SEPA is a fact Paypal simply becomes totally obsolete in Europe.
http://en.wikipedia.org/wiki/Single_Euro_Payments_Area

Critical Test for eBay's PayPal-Only Policy

by: Janet

Fri May 9 18:49:47 2008

Wow! Just read some of the responses to Ebay's proposal, the ones from the banks and banking associations are eye openers. for example, the fraud rate with Paypal is 10 times the rate of internet payments in Australia. Reading those well thought out responses was well worth the time. I suggest that people read them.

Critical Test for eBay's PayPal-Only Policy

by: Kev

Fri May 9 21:00:13 2008

After reading Scott Thompson deny eBay plans to extend these changes to the places such as the UK, then why did I see a rep from eBay on TV here in Oz recently saying that was exactly what they planned to do. What they are proposing is actually illegal under the Trade Practises Act here which is why eBay is asking for immunity from prosecution in their submission.

Critical Test for eBay's PayPal-Only Policy

by: ewert123

Sat May 10 10:47:56 2008

From an article in the New York Times..

http://www.nytimes.com/2008/04/17/technology/17ebay.htm
l?_r=3&ref=business&oref=slogin&oref=slogin&oref=slogin

Mr. Donahoe outlined some more coming changes to the site. In Australia, the company is testing a program that requires sellers to accept only PayPal payments. Mr. Donahoe said that if the test was successful, the company would introduce it in other countries “in months, not years.” Mr. Donahoe said the intent was to cut down on fraud on the site, but critics say the change will entitle eBay to a double helping of fees on each transaction

Just testing then? Yeah right!

Critical Test for eBay's PayPal-Only Policy

by: Jack

Sat May 10 13:24:46 2008

TINYURL, *PLEASE*

Critical Test for eBay's PayPal-Only Policy

by: Ming the Merciless

Sat May 10 15:10:07 2008

Even though these statements were made in Australia, issuing false and misleading press releases (and one of them must be prima facie false and misleading)is a violation of the SEC regulations. Such statements could affect ebay stock prices. It's one of the things that got Ruth Handler sentenced to prison.

This documentation should be forwarded the SEC (Securities and Exchange Commisssion) in Washington, DC for their inspection.

Should we be surprised? No. Ebay is replete with unseasoned but overeducated amateurs who are clueless about anything except enriching themselves.

They do not now and perhaps never will understand that ebay doesn't work like Amazon or Wally World. Simply taking certain business models from two very, very different operations and plopping them on ebay is a prescription for failure.

They just don't get that they're bleeding BOTH sellers and buyers and probably won't until buyers figure out they're being ripped off in the new buy.com venture and buy.com discovers their business model is incompatible with ebay requirement.

Of course, ebay probably cut them a secret sweet deal that exempts them from DSR and neutral/negative feedback consequences.

I wonder how the PESA suckups are feeling about ebay now?

Critical Test for eBay's PayPal-Only Policy

by: Fruity

Sat May 10 15:32:36 2008

Who are they kidding, they'll just let BEST MATCH disadvantage people who dont use PP, then it will force the hands of the sellers.

Critical Test for eBay's PayPal-Only Policy

by: quietone

Sun May 11 21:40:08 2008

I too stopped buying or selling on ebay almost 2 years ago, have not missed their antics one bit! If I want to buy something, I look on the net, never give a thought about going to ebay anymore!
As far as being stuck using Pay pal only, I will not be in this position, but if I did still buy on ebay, I would not be forced to use a payment method I choose not to.

Critical Test for eBay's PayPal-Only Policy

by: Fruity

Mon May 12 03:18:36 2008

AUSSIES!!! You need to go find in your country one of the free talk radio broadcast sites, like blogtalkradio.com

Say what you want the world to hear!! The US wants to hear you!

Critical Test for eBay's PayPal-Only Policy

by: lowvolumeseller

Mon May 12 10:36:30 2008

Against the PP forcing issue, absolutely.

When will the ACCC finally make their decision?

Critical Test for eBay's PayPal-Only Policy

by: ex-ebayer

Mon May 12 13:08:32 2008

Ebay is ridiculous. Paypal is a greed monster which ebay wants to "grow" to devour the entire on-line payment system market.
The ACCC will have no choice but to rule against their petition not to have the rules apply to them. Australians are up in arms and evacuating the ebay titantic in droves.
I left ebay for ola.com and ecrater and won't be back.
Remember: the worst is yet to come on the 19th when all sellers will be subject to even worse buyer fraud. Ebay won't do anything about it and people will have no choice but to leave for safer places to sell. The feedback extortion has already begun from those who were confused about when the new feedback system started.
This time ebay has gone too far to go back and sellers who want to believe it will somehow work out will be scammed so often and severely that they will have no choice but to grow the new sites with all of us who know better than to risk selling at ebay.

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