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eBay's Plan to Force PayPal Rejected Down Under
Posted by
CmdrTaco
on Thu Jun 12, 2008 09:13 AM
from the monopoly-schmonopoly dept.
from the monopoly-schmonopoly dept.
Jm_aus writes "eBay's plan to force all users to use PayPal only has been rejected by Australia's competition regulator, the ACCC. This followed 650 submissions from eBay users as well as from Australian banks, other payment services, the Australian Reserve Bank, and (anonymously) Google, which aired a lot of dirty laundry about PayPal's unresponsiveness and failure to sign up to the local banking code of conduct. Apparently the public benefits from eBay's 'Bad Buyer Experience' elimination program are likely to be 'minimal.' There is a period for appeals."
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Technology: Aussie Reserve Bank Eyeing eBay's PayPal Policy 63 comments
Bulldust writes "Regular readers will recollect the recent story that eBay is forcing Australian users over to PayPal or COD as the only forms of payment in June 2008: eBay Australia Makes PayPal Mandatory. It now appears that the Australian Reserve Bank will consider throwing its weight behind users, should the eBay policy be deemed to breach trade practice and competition laws."
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Right, because PayPal's better... (Score:5, Interesting)
As a buyer, I really want to use my credit card directly. PayPal, last time I used it, only covered a $200 return or so. I went straight through to my credit card company (which is linked to my PayPal account) and did a chargeback through them. PayPal sent me a nastigram saying if you keep that up, we'll cut you off.
Yeah, thanks but no thanks EBay.
You're in luck mate! (Score:5, Funny)
Just fill out the form at gday.ebay.mate/safecredit.asp and we'll get you started faster than a kangaroo can steal your vegemite sandwich.
Parent
Re:Right, because PayPal's better... (Score:5, Informative)
I started a petition to get the law changed: http://petitions.pm.gov.uk/3partyccs/ [pm.gov.uk]
Parent
Re:Right, because PayPal's better... (Score:5, Interesting)
I did my homework, and that's why they have my credit card on the back end (which, thankfully, can tell them to get stuffed). You're right about linking to any account that keeps cash on hand in it. PayPal also has a long history of locking cash in its customer accounts. Really, they're just terrible to everybody involved. I don't believe I've bought anything with my account since that time.
From a seller's point of view: The EBay style of charging the seller commission, then charging the seller a percentage of PayPal too kinda gets me. Sure, they're treating them like the separate company they used to be, but come on. I suppose you get what you get for having something less than a true credit card merchant account (which costs).
As an aside rant, I'm sad that nobody does a cash discount anymore. I'd happily pay you on a 2% reduction to save you the 3% or whatever my CC company charges. Well, really to save myself 2%, but you'd profit as a vendor!
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Re:Right, because PayPal's better... (Score:5, Informative)
It's even disallowed to require the transaction to be over a certain value to accept payment via credit cards.
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Re:Right, because PayPal's better... (Score:4, Informative)
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Re:Right, because PayPal's better... (Score:5, Interesting)
That's against the terms of the merchant agreement to require a lower limit.
What you might be thinking of is the similar "Minimum $3 charge if using credit card". Your quote implies that if you buy a $1 item, you can't pay by credit card. My quote says if you want to buy a $1 item, you will be charged $3 for it instead if you use a credit card.
It's a very subtle thing - it implies a cash discount (buy item for $1 via cash, or $3 via credit card), but it also isn't (if you buy 3 $1 items, it's $3).
What I want to know is if merchant accounts don't allow cash discounts, why don't they go after the tons of people who advertise prices, then say "price is after 3% cash discount"?
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Re: (Score:3, Insightful)
That's against the terms of the merchant agreement to require a lower limit.
I know. But up here at least, it still happens.
What you might be thinking of is the similar "Minimum $3 charge if using credit card". Your quote implies that if you buy a $1 item, you can't pay by credit card. My quote says if you want to buy a $1 item, you will be charged $3 for it instead if you use a credit card.
That would also be against the rules of the CC companies. And that's not what I'm talking about. I'm quite literally talking about a hand-lettered sign on the register saying "Your transaction must be at least $3.00 to use a credit card here, sorry for the inconvenience."
Re: (Score:3, Informative)
It looks like that's still the rule. Page 10 of the Visa Merchant Card Acceptance Guide [visa.com]
Always treat Visa transactions like any other transaction; that is, you may not impose any surcharge on a Visa transaction. You may, however, offer a discount for cash transactions, provided that the offer is clearly disclosed to customers and the cash price is presented as a discount from the standard price charged for all other forms of payment.
And Page 9:
Always honor valid Visa cards in your acceptance category, regardless of the dollar amount of the purchase. Imposing minimum or maximum purchase amounts in order to accept a Visa card transaction is a violation of the Visa rules.
Mastercard regulations [mastercard.com] are similar:
5.9.3 Minimum/Maximum Transaction Amount Prohibited
A Merchant must not require, or indicate that it requires, a minimum or maximum Transaction amount to accept a valid and properly presented Card.
5.9.1 Discrimination
A Merchant must not engage in any acceptance practice that discriminates against or discourages the use of a Card in favor of any other acceptance brand.
Re:Right, because PayPal's better... (Score:4, Interesting)
In response to the Anonymous Coward, they are allowed to give cash discounts, but it has to be clearly stated to the customer before hand. A couple of the local computer stores here do this, but they have labels all over the store saying "All prices are 2% cash or debit discounted"
Source:
For the US (I'm in Canada, but I can't find the doc on visa.ca). See Page 9/10:
http://usa.visa.com/download/merchants/card_acceptance_guide.pdf [visa.com]
Parent
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Re: (Score:3, Interesting)
I was once told I couldn't use my credit card for a small transaction (there was no posted minimum either). I wasn't sure at the time about these things so I didn't put up a fuss and paid cash. I checked into it, once I learned that they were violating the merchant rules I filed a complaint with my bank (the card issuer).
I received a reply a few days later that Visa was looking into it. Strangely enough, I have
Re: (Score:3, Informative)
It's a bad rule that shouldn't exist, IMO, and serves only to force business owners to make a tradeoff: take a loss or have a sign there that gets a customer to buy a pack of gum?
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If they feel they can't profit on taking a CC transaction below a certain amount, they should either: Find a processing provider with better rates, not take CCs at all, or raise their prices such that larger purchases offset some of the cost.
Their profit margins aren't my concern, and it's silly to be expected to carry cash to make small purchases.
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The main reason for doing this was to make the costs of buying by credit card transparent. Under the old system, credit card providers charged a fee to the merchant, but the fee was hidden from the consumer. The merchants had to absorb this cost by raising prices slightly across the board. That meant that the banks were effectively appl
Re:Right, because PayPal's better... (Score:5, Insightful)
To give an example of their total fee structure: after selling a small item for $30, you're only going to see around $24.50 for it after fees, and then you still have to pay to ship it.
Parent
Re:Right, because PayPal's better... (Score:4, Interesting)
There's also the fact that there are services equivalent to PayPal that charge 1.5%+$0.30, so its service simply can't compete on value. That's precisely why eBay are now choosing to force sellers to offer it - in order to prevent them from using more economical options.
Parent
Re:Right, because PayPal's better... (Score:4, Informative)
Really I don't object to them charging a percentage on transactions - it's still cheaper than a full merchant account. What I very much do object to is them charging twice what Google Checkout does for an equivalent transaction. What I object to even more is being forced as a seller to use PayPal - incidentally does anyone know who in the UK I should make a complaint about this to? It reeks of anticompetitive behaviour, as the Australians have realised.
eBay actually has Google Checkout listed as 'Not permitted' on their Accepted Payments [ebay.co.uk] page, and anyone who has ever tried to email eBay's support team to question this will know how hard it is to get an answer (they normally just spout irrelevant canned responses until you give up) but I did finally get an email from eBay explaining that I am allowed to use it but that I must offer it alongside PayPal and outside of the eBay checkout process.
I won't even go into PayPal's dubious dispute processes and lack of safeguards - they are well documented elsewhere, but again the argument of "don't use them" is rendered moot by eBay's policies.
Parent
Can somebody explain? (Score:5, Interesting)
Re:Can somebody explain? (Score:5, Funny)
Parent
Re:Can somebody explain? (Score:5, Informative)
2. The french have actually charged eBay with both on a number of occasions.
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I'm just hoping that all countries everywhere enact similar rulings. Paypal gets on my damn nerves.
Re: (Score:3, Interesting)
eBay has done its homework on PayPal and knows it cannot turn nearly as huge of a profit as it does if PayPal has to comply with all of the banking regulations.
Re: (Score:3, Informative)
FYI: You can start your own payment processing service like any business. Where you are going to get screwed, is when you need to connect to banks for electronic funds transfers. ACH rates are low, but getting into the network is not cheap or easy.
Payment processing is one of the monopolies absolutely no one cares about despite the broad harm to consumers. F*i*r*s*t D,a,t,a and V^i^s^a.
Re:Can somebody explain? (Score:5, Informative)
Because PayPal is not a bank. It doesn't offer loans, it doesn't pay interest, it doesn't have a required holdings (no loans = 100% cash on hand), etc, etc.
PayPal is as much of a bank as Chuck E. Cheese is a bank for handing out those game tokens and tickets. It's just a convenient way for you to give money to eBay before you spend it on an actual good (the appeal of which I have yet to understand.)
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When did I sign this contract? When I was born? Am I agreeing to this contract every second (since birth) that I do not quit my job, take all of my property on a plane, and spend my life savings moving to another country? Is that how the contract works in a "democratic society"? If so, where is this explanation written down, and how does it justify the violation of everyone's natural rights a
Re: (Score:3, Interesting)
There is no such right. Read up on Wikipedia [wikipedia.org] as well, if you'd like.
I'm perfectly happy giving up my right to take someone's stuff"
You don't have such a right. See above.
And furthermore... (Score:5, Funny)
*ahem*
"Like fuck you will"
That was an extract from the actual brief, word for word, honest
Paypal sucks blah blah (Score:3, Interesting)
And the only way to be able to do that is to sign up for an account where they take a percentage of all of my transactions.
How does that commercial go? "It's my money and I want it now!"
But seriously, I'm tired of paypal, I just wish it would go the way of the dinosaurs because it's such a frustrating site to use to transfer funds.
Re: (Score:3, Informative)
Merchant Visa/MC accounts with your bank will charge fees too. How do you think they make their money?
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Don't get me wrong, I love PayPal (Score:3, Interesting)
What about those of us who SUED PAYPAL and WON (Score:5, Informative)
They still sided with him. However, I knew this was a possibility and I moved the money out of paypal, and blocked them from charging me back through my bank who happily sided with me.
About 6 months later I joined the lawsuit, and provided all of the evidence to them for exhibits. If you didn't know we won... and won big. Not happy with the default settlement offering I filed for the full settlement and received my check a few months later. I framed it... and I will NEVER do business with Paypal again.
I don't care if Ebay bought them. They do not follow banking guidelines, they consistently have proven themselves untrustworthy and generally don't abide by the law OR their own policies.
If Ebay goes to Paypal only, I think they'll soon realize the size of the mistake they will make when other auction sites blow past them at 90mph!
Birds of a feather.... (Score:3, Informative)
I refuse to EVER give any more money to PayPal or EBay again.
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Ebay is Dead to Me, Paypal is Evil (Score:4, Insightful)
On the other hand, I never liked Paypal. As far as I could tell its sole purpose was to make it easier for sellers to scam buyers, since the only protection given to buyers is something on the order of $100. I know some people who bought Apple laptops on eBay, never received them, but were unable to get all of their ~$2000 back. If it happened to me, I'd do what another poster said today and stop the payment to Paypal from my credit card, but if it were me I wouldn't have made the purchase in the first place.
Verfied Accounts (Score:5, Interesting)
Re:Verfied Accounts (Score:4, Interesting)
Once you add bank to an existing account, it opts to directly withdraw from the bank rather than credit card, you CAN'T make the credit card default.
In Australia, this means I get charged bank fees for using my regular bank account, (maximum 5 transactions a month free, than small but annoying fees)
The credit card obviously has no fees - they are happy with the interest you pay as a dipshit consumer in debt (which I'm not)
Paypal have done this so that people can't do ccard chargebacks as easily.
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Re: (Score:3, Interesting)
I wonder how often they let you re-verify an account. Seeing as how they deposit several cents into your account totally free as part of the verification process... I smell an untapped profit opportunity! :)
Paypal tried to steal $1200 from my wife (Score:5, Informative)
The previous time I posted this on
In fairness to Paypal, our experience was shortly after it was purchased by EBay, so probably EBay cleaned it up some since then.
Never been burnt, yet *knock on Woody Allen* (Score:4, Interesting)
I moved back in 2003. That prompted me to move to a new bank as well. I was fortunate enough to have put my old bank account into Paypal when I verified my account. When I moved I sure as hell didn't update the info. It remained that way until this Spring when I accidentally forgot to change the payment method from PayPal's default of a bank account to a CC. They realized that my account was closed at that time and unverified my PP account. I had to give them my new bank account info. I hated to do it but I had to complete the purchase. I'm seriously considering signing up for a new account somewhere, using it for 6 months and then closing it just so I can get back to the way it was.
It's amazing that I've never actually gotten burnt considering how much I've used PP. The vast majority of the equipment I buy is networking gear. I'm pretty careful who I buy from. If I have any feeling that it's not a good seller I move on. I won't buy from anyone on the West coast (too much counterfeit Cisco hardware comes from China into the West coast). I'll even read all the seller's reviews and go back through their past auctions and the buyers to see if it looks legit. I guess being careful pays off. I'm definitely not a PP or eBay shill. I lost a fair bit of money in eBay stock and I think the wannabe bank PayPal should rot in litigation hell, but I never have been burnt.
Already too late for me (Score:3, Interesting)
I used to use eBay and Paypal quite a bit and for the most part I've had good experiences. For quite a while I kept a significant amount of money (nearly $10,000) in my Paypal money market account, earning a fairly decent interest rate (one of the higher rates I could find at the time). I was aware that Paypal was not FDIC insured but I was fairly confident that Paypal wouldn't collapse. I had one eBay purchase where Paypal backed me up and I got a refund (except for shipping). I really didn't have any serious complaints.
After hearing the news about eBay trying to force the use of Paypal, I had to rethink my position. I was concerned that such a decision would negatively impact their business and made me less secure in keeping my money there. More importantly, I felt I could no longer "invest" in the Paypal business model. Their interest rates had also been dropping so I started looking around at bank accounts. Surprisingly (or maybe not so, in hindsight) I found one that had a better interest rate and transferred my money. Paypal was more convenient and I'm sorry to miss out on that, but Paypal has lost my business (over $10,000 worth) and I'm not going back now.
So, what is the alternative? (Score:4, Interesting)
Maybe an alternative to eBay is needed. Amazon is okay for books and music, but what about other stuff? eBay actually seems like quite a good way to sell some stuff, if it just wasn't for PayPal.
Extortionate fee system (Score:3, Informative)
So basically they can charge a lot of money just to make one person's account balance go down and another go up - that's never happened when I've done a bank transfer within the UK.
Daylight fucking robbery.
Re:elimination program? (Score:5, Interesting)
If my personal experience is any indication, it's the process whereby upon reporting being victimised by an eBay "power seller" eBay threatens to find you guilty of being a "bad buyer" and threatens to place sanctions on your eBay and Paypal accounts unless you pay up. The workaround I found was to change all my eBay user info to the crooked seller's email address and a fictitious physical address and I canceled my paypal account.
It probably helped that I did this within an hour of eBay finding in favor of the dishonest seller (item was a Chinese counterfeit and did not function properly, also they attempted to charge for two items when I only bought one item). This was about three months ago, I've not heard anything about the matter since. Obviously, eBay lost me as a customer.
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