PayPal isn’t compulsory on eBay UK (if you’re a big enough seller)
July 7, 2008
eBay UK sellers must accept PayPal. It’s the rule. It’s been the rule since 3rd June. And it’s to increase buyer protection and confidence, so that’s alright. Right?
Not quite. Not if you’re one of the really big sellers, whom eBay will keep happy even if it means ploughing up that famous level playing field.
Questioned on the PowerSeller Board about Dell’s lack of a PayPal offering, pink Joe had this to say:
When we made the Paypal change, our seller support teams contacted our largest accounts to discuss this. A very small number of sellers, including Dell, who use a different checkout process were unable to adapt their technologies in time. So we created a new policy such that if a platinum powerseller met certain conditions, we would work with them to migrate their systems. Those conditions include that the seller must offer their own payment protection policies such that buyers have access to the same cover as Paypal would provide and that they migrate quickly. It is that, and not the country, that allows Dell to list without Paypal for a short period of time.
Smaller sellers who want to use their own merchant accounts to process card payments rather than PayPal will be extremely unimpressed with this. As several people have commented on the original thread, not accepting PayPal seems more like to be about “wouldn’t” than “couldn’t” adapt technology. Plenty of other sellers were, after all, expected to change their technologies to ensure that their buyers had PayPal’s protection, and eBay announced the change in March: four months should be long enough for Dell to change a computer system, shouldn’t it?
What’s more, buyers learn that “all eBay UK listings now offer PayPal”. How is it improving the buyer experience if a few of the very largest sellers and the most well-known names are allowed to flout the rule?
Thanks to Whirly for the heads-up.
TipIt sends PayPal cash via Twitter
July 2, 2008
Micropayment services, and especially those which allow readers to tip bloggers, are a dime a dozen these days, but TipIt is the first one I’ve seen that allows PayPal tips to be sent via microblogging service Twitter.
TipIt’s core service is fairly straightfoward: you put a ‘tip jar’ link on your website; your supporters can tip you tiny or less-tiny amounts of money; when their total tips reach £2/€3/$4, they’re told to pay by PayPal; assuming that they do pay, TipIt take a percentage for processing fees (currently just over 5%), and you get your share of the rest. According to the company, around 70% of tippers make good on their promises: you wouldn’t want to rely on it to pay the mortgage, but it might cover your webhosting.
But TipIt also offers the ability to transfer money via Twitter. Just tweet “d tipit @TARGET AMOUNT MESSAGE”, and you’re back in the same “email to remind you to PayPal” loop. It’s not perfect, far from it, and I’m betting it will be just the first of many such providers, but it has enormous potential.
Via TechCrunch.
Best in show hardware: Credit card swiper for PayPal
July 1, 2008
I visited a lot of stands at eBay Live! this year but USBSwiper.com definately won my vote for the best new hardware product of interest to eBay sellers.
The USBSwiper does exactly what it sounds like, it enables you to swipe a credit card in a USB dongle and deposits money into your PayPal account. It works with both PayPal Payments Pro and PayPal PayFlow Pro so functions equally well in the UK and the US.
Rather than typing the details of cards into the virtual terminal it enables the card information to be read by the USBSwiper in the same manner as every cash register up and down the country prior to the introduction of chip and pin.
If, as a seller, you visit tradeshows and want to accept credit cards on the spot for customer orders all you need is your laptop, a WiFi or mobile internet connection and the USBSwiper. In addition it avoids the need for a separate merchant account for accepting credit cards, which is a boon for the small business as the only cost to process the funds are the PayPal charges.
There’s a set up cost of $49.97 (~£25.00) for the hardware and $197.00 (~£100.00) for the software license. From then on the solution costs just $4.95/mth (~£2.50) making ongoing costs negligible.
This really is one of the products sellers have been begging for for years and definitely a point of sale tool that businesses operating primarily online should consider for offline transactions.
Google puts the boot into eBay
May 31, 2008
As part of eBay’s request that the ACCC approve their request to implement a PayPal only policy on eBay all interested parties were able to make submissions which the Commission would consider when forming their decision.
Following eBay’s response (and after the deadline for public submissions expired on 3nd May), one more 38 page anonymous report was submitted, which set out in detail why they considered eBay’s move to be anti-competitive.
It didn’t take too long though for one eBay user to expose the culprit, examining the hidden (but easily accessible) meta data of the document he found the phrase “ACCC Submission by Google re eBay”. The document has been replaced with an amended version with Google’s name removed.
This has to be embarrassing for Google, all the major banking institutions that made submissions did so publicly, and it looks much worse have your intentions revealed in this manner than it would do to be up front in the first place.
(Thanks go to Richard for spotting this story)
PayPal confirm genuine emails are spoofs
May 26, 2008
I received an email from PayPal last week, notifying me of a payment reversal by the buyer’s bank. I wouldn’t normally quote such things in full in public, but I don’t think I’m betraying any confidential information here because the email is strangely lacking in any sort of information at all:
We have placed a temporary hold on the funds until our inquiry is complete.
We are contacting you to learn more about this transaction.
To help in our investigation, please reply with the following information within seven calendar days:
#. Details about the item you sold
#. The buyer’s name and address
#. Whether or not the item has been sent. (If you have not yet sent the
item, please do not send it.)
#. A phone number where you can be reached for more information
#. Any email correspondence you have had with the buyer
If you have already sent the item, please also provide:
#. Name of the delivery service used
#. Date of posting
#. Tracking number
For transactions of $250.00 USD or more, please let us know whether you
would be able to provide a proof-of-receipt in the form of a signature
from the buyer.
I was really not sure whether this was a real email or not. So like a good eBayer, I forwarded to spoof@paypal.com. Then I signed in to my PayPal account, and sure enough there was a reversed transaction. Was this a real PayPal email, or just a spooky coincidence? I erred on the side of protecting my PayPal account, and replied to the email with the information requested.
This morning, I had two emails back from PayPal: one from customer support thanking me for the information I’d supplied, and the other from spoof@, thanking me for forwarding the spoof email and confirming it wasn’t genuine.
At this point, I started to wonder whether it was me or PayPal who had gone mad: but Jane the demon bead lady confirmed in our forum that exactly the same thing had happened to her.
I can understand that PayPal might not want to send out confidential financial information in emails, but the above email is completely inadequate. How many sellers are going to see it lacking any kind of credibilty, assume it’s a spoof and delete it, only to have PayPal return the payment to the sender a week later because the seller hasn’t complied with the information request. At the very least, this should say “please sign into your PayPal account and supply us with the information requested through our website”, rather than using email for investigations.
As for spoof@paypal.com, it’s long been my suspicion that they tell us that everything is a spoof, just to be on the safe side. If genuine emails can and are being flagged as phishing, then really what’s the point of having spoof@ at all?
In the meantime, any sellers receiving such an email should sign into their PayPal account to check whether a payment really has been reversed before replying to *or* deleting the email.
eBay responds to ACCC re PayPal only policy
May 26, 2008
eBay has made a response to the ACCC (Opens in PDF), regarding their move to compulsory PayPal for eBay Australia transactions. The response makes three main points
1) PayPal only on eBay will not significantly reduce competition in online payments as payments on eBay do not comprise a significant proportion of all online payments and PayPal’s membership base will not increase significantly by making it complusory on eBay. They point out that “eBay buyers and sellers who do not wish to pay PayPal fees are able to avoid doing so by listing and purchasing items through competing services”. An additional point is that buyers still have choice of which underlying payment method to use such as bank transfer, debit card, credit card or PayPal balance.
They quote Oztion’s report that their membership has risen 22% since the PayPal announcement, saying “there is evidence to suggest that a number of sellers will choose alternative sales platforms in response to the implementation of the Project, providing a strong incentive for eBay to maintain a competitive offering”.
2) eBay state that use of PayPal will actually increase protection to users. They say “PayPal users automatically obtain the benefits of the security and protection mechanisms offered through those [credit/debit card, Bank funded] payment methods plus the additional layer of security and protection benefits offered by PayPal.”
eBay also highlight that even their main competitors acknowledge “that the information-sharing between eBay and PayPal gives PayPal an advantage in reversing fraudulent transacfions..” as justification for insisiting on PayPal only.
(3) eBay reject a number of claims made in submissions, such as PayPal is not the largest and longest established online payment provider, PayPal will not become a monopoly for eBay payments, it will merely be an intermediary to process transactions made via other payment institutions, and that they don’t discriminate against high-volume and/or low-margin sellers as they offer micropayments and volume discounts.
eBay’s submission suggests that PayPal will not become an online payment monopoly, and that buyers and sellers have choices of venues to buy and sell on. They insist that payments via PayPal not only offer additional security to alternatives, but enable eBay to protect buyers and sellers from problematic transactions through monitoring buyer and seller behaviour.
In conclusion eBay said changes would not be substantially lessening competition, and in any event, any lessening of competition would be clearly outweighed by the significant public benefits that would be likely to result from it.
The big question is will the ACCC grant eBay’s request to go PayPal only, and if so how long will it be before the policy migrates to other countries around the eBay world?
Are eBay banning cheques in the US?
May 23, 2008
Auctionbytes has an interesting story this morning regarding a recent eBay survey of US users. One of the questions apparently reads:
To make eBay a safer place to buy and sell, sellers would be limited to accepting only the following safer electronic payment methods for their eBay sales (Paper forms of payment such as personal checks, cashier’s checks and money orders would no longer be allowed):
* PayPal
* Certain other electronic payment methods currently allowed on eBay, such as Xoom and Propay
* Credit Card or Debit Card payments made directly to the seller’s Merchant Account (Sellers would need to acquire a Merchant Account from a bank or other provider)
* In person payment for local pickup items
Sellers would be able to accept any one of the above payment methods, or they could accept all of the above. Sellers would receive full protection from payment reversals for items sold on eBay and paid with PayPal when they ship to the address provided by PayPal. Buyers paying with PayPal would be fully covered, no coverage limit, if their item doesn’t arrive or is different than described.
eBay have said that they have no plans to replicate their Australian PayPal-only policy in the US, but as many eBay-watchers have said, those statements seem to have been very carefully couched in get-out clauses.
A move to all-electronic payments would surely make buying on eBay safer for buyers, though it would also drive away those who don’t have access to credit and debit cards, and those who choose not to use them online. Allowing the use of other payment providers than PayPal might help to convince sellers that this isn’t purely about eBay’s bottom line.
eBay typically only consult users like this when something has been decided and they’re just tweaking the details, so I’ll be expecting an announcement from the US on this before the end of this year.
PayPal: Two weeks for eBay to respond
May 9, 2008
eBay have just two weeks today to respond to hundreds of concerns lodged with the Australian Competition and Consumer Commission (ACCC) regarding their proposed exclusivity deal with PayPal. With some 350 odd submissions it’s going to be a busy time for them.
Many of the submissions are from eBay users complaining that they want choice for eBay payments, and in fact the crux of many complaints is simply that they’ll have to pay PayPal fees on top of their eBay fees. In reality this is a lessor concern for larger businesses trading on eBay as they’ll already be paying banking or merchant account fees for each transaction anyway.
One of the most interesting submissions come yesterday, from the Australian Bankers Association (ABA). It addresses two main points - firstly the exclusion of PayPal’s competitors from a large segment pf the market, i.e. eBay. Currently they state 50% of transactions on eBay’s Australian site occur through PayPal, with the next most popular payment method being bank transfer, followed by cheques and money orders. As in the UK whilst there are alternative payment methods they are either used very rarely or are banned from eBay as an unsafe payment method.
It’s the second point that is most interesting though, the ABA assert that exclusivity on eBay for PayPal will give it a “slingshot” effect and unfair advantage for non-eBay transactions. As buyers will be forced to sign up for a PayPal account when using eBay they’ll naturally then find it more convenient to use PayPal rather than sign up for alternative services in the future.
The ABA state “Even banks, which might otherwise be expected to develop their competing services with comparable features to PayPal may be deterred from doing so”. Once PayPal gains an unassailable market position their market share is predicted to be 65% of all Australian ecommerce transactions, should exclusivity on eBay become ratified.
In conclusion the ABA say “Clearly, the public benefits are exaggerated or illusory” and finish with the warning that PayPal would be “able to increase fees and charges to eBay users.” In reality (for the UK at least) PayPal have lowered fees in recent years, although it’s a legitimate concern.
It’s worth noting that other site with third party sellers such as Amazon have their own exclusive payment method and they too are opening up their payments for off-Amazon transactions. If their off-Amazon business becomes substantial they too could face similar issues in the future.
Whatever the outcome of the ACCA ruling it’s going to an interesting time for the online payment industry.
Demand Draft appears as payment option on eBay
April 24, 2008
eBay have inadvertently changed the payment methods displaying on listings to read “Demand Draft” instead of “Postal Order/Bankers Draft”.
A demand draft isn’t something I’ve come across before but appears to be a guaranteed cheque drawn on a buyers account but not generally available in the UK. Hopefully we’ll get our Postal Orders and Bankers Drafts back soon.
(Thanks to Eddie from AuctionChex for the info)
What is a PayPal echeque?
January 11, 2008
Jan asked today, on TameBay “What is an echeque?” and I guess it’s time to explain. According to Paypal an echeque is “an electronic funds transfer that withdraws money directly from your bank account. It’s just like writing a cheque, only it is done electronically.”
Basically it’s a way for users to fund payments if they don’t have a valid credit card on file with PayPal. The downside is that it’s not an instant payment. When you send money with an eCheque from a UK bank account, the transaction is held as pending for seven to nine working days, until the electronic funds transfer clears your bank.
Now the good news is that once an echeque has cleared it will never be subject to a chargeback in the way that a credit card can be. For the seller it’s a much safer form of payment albeit a slower one. Of course if the payment turns out to be fraudulent or the buyer opens a dispute with PayPal the payment may still be reversed. However with a credit card it’s much easier for a buyer to simply dispute the payment and have the funds reversed outside of the PayPal processes.
Sadly PayPal have never managed to get echeques working reliably. Sure the funds arrive but the email messages are often incorrect. As Jan found out often emails have suggested echeques will clear in four working days, but that’s only in the US. Although UK emails have frequently stated four days it still takes seven to nine working days for the payment to clear. This is simply a bug that PayPal are working to correct.
Why do buyers pay with echeques so often? The answer is because they often don’t realise they’re about to. If their credit or bank card has expired the payment will default to an echeque. Also if a buyer doesn’t wish to use their PayPal balance (if they have one) the only option is to send an echeque. To avoid this and use a credit card the entire PayPal balance has to be withdrawn from your account before you can make a credit card funded payment.
The biggest problem with echeques is having waited seven to nine working days for them to clear, sometimes they don’t. It still takes seven to nine working days to find out that they payment has failed, and then the buyer has to repay.
The beauty of buying on eBay is the speed at which transactions can be processed and that’s why PayPal fits the eBay marketplace so well. By delaying payments and then if they fail having to start the payment process all over the transaction can easily take three or four weeks to complete. That’s a terrible buyer experience and even worse often the seller isn’t informed that a payment has failed. PayPal don’t appear to send emails or indicate in recent account activity that the payment has not cleared so it may be some time before the seller and buyer realise they need to initiate another payment.
PayPal echeques are easily their worst product. PayPal is a fantastic payment processor with relatively low fees, it’s easy to open an account and almost everyone is eligible to send and receive payments through them. Echeque payments just don’t live up to PayPal’s reputation and for all of the reasons above I believe 2008 should be the year echeques are discontinued.
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