EBay Abandons Plans For PayPal Monopoly

An anonymous reader writes "eBay's has lost its fight to ban all payment methods except PayPal. When Paypal originally announced the scheme it was to be global, but they began with a dry run in Australia to test the reaction of government and consumer authorities. In the public slanging match that followed between eBay and the regulatory ACCC, eBay spammed users claiming it was fighting for 'safety benefits for consumers.' Fortunately the consumers won. Conceded eBay vice president Simon Smith, 'While we disagree with the ACCC's draft notice, we have decided to withdraw the notification to stop any further confusion and disruption among the eBay community.' Nevertheless eBay insists PayPal is now always offered as a payment option. Have big corporations finally learned that they can go too far? More chillingly, if eBay had launched the scheme in America would they have gotten away with it?"

Paypal only

Then I would leave e-bay, after being there since 1996

Re:Paypal only

I was there since 1997, but I stopped selling on ebay several months ago. Their new policies, higher prices and impossibility for sellers to leave any negative or neutral feedback has driven many people away. Just read the ebay forums, the Front Porch, and you will see hundreds of angry people. What's even worse, go to Seller Central forum and browse the last pages... ebay had moved to the back of the list some important threads where people were complaining about the new policies. Last Feb. when sellers called for a boycott and stopped selling for a determined amount of time ebay posted hundreds of thousands of fake listings to show that their numbers were not down (it's all documented in the forums). Nowadays, me and many other ex ebayers moved to iOffer.com and it's like heaven compared to ebay. No listing fees, lower final value fees, proper feedback (and you can transfer your rating from ebay), free pics and free store. As of this week there are over 4 million listings on iOffer.com

Re:Paypal only

Well, the purpose of negative feedback is to stop being getting screwed over by bad actors.

There are several ways that a buyer can scam a seller. They can, for example, claim that the item is not as described, and then return something else (e.g. buying a new diamond ring and returning a cheap cubic zirconia, or buying a new laptop and returning an old one). eBay and PayPal will honour proof of postage as "proof" that the correct item was returned, even if it wasn't.

In those situations, negative feedback was the only recourse that a scammed seller had.

Re:Paypal only

I do think that the buyer was fair to give you negative feedback.
He had just won the auction, and you said that you decided that you dont want to sell it after all.
Posting a auction requires you to accept a legal agreement which outlines that.

Re:Paypal only

Then I would leave e-bay, after being there since 1996

Amen. I personally have experienced the famous Paypal shaft. Froze my account for no reason and blackholed all my communications, just like so many other people. When I finally did get access to my money again after many months of frustration and runaround, I closed the account I was stupid enough to give them access to and left Paypal for good.

Paypal is an unregulated scam.

Duh, Yea!

More chillingly, if eBay had launched the scheme in America would they have got away with it?

Yes:P There aren't any wildly accepted payment processors you can go with with ebay. While I don't like the arbitrary way Paypal handles accounts, its hard for me to go back to mailing a check or money order with its convenience. I doubt enough Americans would care one way or the other sadly.

Just cancel your eBay account

I quit eBay (Canada) the day that they forced Canadian sellers to accept Paypal. Also, the fact that they'll withhold payments to me for 21 days without paying interest didn't go over so well either.

Shame to let all that good feedback go but I won't bend over for corporate raping.

Re:Just cancel your eBay account

I have sold a lot of stuff on Ebay too, but I quit in favor of Craigslist. This Ebay maneuver was just a calculated way for them to muscle sellers into giving Ebay a bigger piece of the pie. It's the 'ol "gain monopoly then exploit" plan. There needs to be a name for it. There probably is but I can't think of it...

Also here's the obligatory grammar gripe. "Have big corporations finally learned that they can go to far." Where is this "far" place and how do I get there?

Re:Just cancel your eBay account

> Also here's the obligatory grammar gripe. "Have big corporations finally learned that they can go to far." Where is this "far" place and how do I get there?

"A. You can NEVER go to far."

"B. If I'm gonna get busted, it is NOT going to be by a company like eBay!"

(see also: "Goto-far Statement Considered Harmful")

As an Australian

I applaude the ACCC on this move but I wish somebody would have told me this was going to happen sooner. I requested them to shut down my eBay account in protest a month ago. eBay rationalized this by saying they were acting in the interests of consumers despite consumers said very clear they were against this.

This was about monopoly and eBay getting paid twice per transaction (more money for them). They spammed me MANY times trying to say "this is for your own good". I had customer representatives hassling me all the time when I requested my account be closed and they were going "you can sign up to paypal" and I said "I dont want a paypal account" and after 5 repeated attempts, they still havent shut it down but say "its in the process of being shut down"

A few questions

I understand that the real aversion to this plan comes from the "mandatory" part, but why is PayPal a bad thing? Personally, I like having a middleman shield my credit card information from the seller, and I like some of the other protections that using PayPal can afford.

And, frankly, what's so wrong about having a specific method of payment used throughout a website? If eBay had their own internal payment system identical in every way to PayPal, would there be as much fervor?

Re:A few questions

eBay already has their own internal payment system identical to PayPal in every way. It's called PayPal.

Re:A few questions

And, frankly, what's so wrong about having a specific method of payment used throughout a website? If eBay had their own internal payment system identical in every way to PayPal, would there be as much fervor?

A specific method of payment is not the issue here. The issue is that eBay owns PayPal, making the whole "we're doing this to protect YOU" argument rather spurious at best.

eBay takes a commission on each item sold through their site. Paypal takes a chunk of every transaction that goes through. So it works like this. Person A puts up an item for sale. Person B is the winning bidder. Person A now owes eBay X amount of money based on the final price of the item. This comes out of what they receive in payment from Person B. Person B sends the money through PayPal, which takes a percentage of the transaction, Y. If the item sold for Z dollars, person A will only ever see Z-(X+Y). Essentially, eBay gets paid twice for the same auction. THAT is where people are getting (rightfully) peeved.

Re:A few questions

PayPal has a long history of closing accounts, dipping into bank accounts that are associated with accounts, freezing assets without recourse and generally being really shitty corporate citizens [somethingawful.com]. Their status as an effective middleman is middling at best.

Re:A few questions

I have a separate bank account with "totally free checking" at a local bank and only use it for Paypal. Nothing else. When I need to use Paypal, I deposit money in that account by check from my other bank or using their ATM out front and walk in and deposit it. If some of the horror stories I hear about Palpal freezing accounts or people being scammed happen to me, I will only loose access to a couple of dollars.

Re:A few questions

You do all that to avoid being stolen from, and you still do business with paypal? If your fruit vendor threw a nasty one at you every fifth visit would you just start wearing a raincoat?

Ebay auctions are not a necessity of life

> More chillingly, if eBay had launched the scheme in America would they have got away
> with it?

Probably, because while people like you would have whined and moaned about the evil of it all you would have kept right on doing business with them. You recite high-sounding phrases about your rights, but you value convenience more.

Try to get a grip. There are lots of other ways to buy and sell things. If Ebay management wants to act like a pack of fools it's between them and their shareholders. They need customers more than the customers need them.

In the US...

The outright banning was perhaps a red-herring, i.e. an "It can be worse" program to distract people from other anti-competitive measures they were taking at the same time.

People will remember only that they were considering to ban the competitors outright, they have withdrawn that. Hence, they have succeeded. The public (the news media) will now ignore the more important changes -- the new requirement that paypal be offered on all listings.

Think of the auction bidding strategy that involves conspiracy: the highest bidder will confer with a third party to "accidentally" make an obvious bidding error, like bidding 100000 on a $100 item. The high-bidding conspirator will withdraw their bid (based on it being an obvious error), with the second-highest bidder getting the item for a ridiculously low price.

Banning non-paypal services outright is the distracting (erroneous bid). Making it mandatory to offer a Paypal option on all listings is the lower bid that still gets the item (eBay merchants' payment processing business).

They've also basically gotten away with it by banning their potential biggest competitor (Google) early.

Justifications are only to save face. The real reason they want to ban new non-Paypal services should be obvious.

By having pay-by-PayPal-through-eBay's-site required to be an option for all actions, the other payment methods will begin to be marginalized.

Because they will be less convenient.

By "not banning them" eBay will pretend to be placating them and allowing competition, where in fact, it will be harder for competitors to compete than before.

Now by withdrawing their "ban on alternate payment services", many people have by now forgotten or won't notice other changes...

They'll think eBay learned their lesson and will play nice, when it couldn't be farther from the truth.

Australia is a good common ground.

Australia is a good test bed for consumer goods. Australia is relatively isolated with a limited population of first world consumers. The Australian consumer is typically a spoilt one (with no offense intended, it's just a marketing term for the consumer-climate) This means bad ideas sink very quickly and only the very best ideas will gather the momentum & critical mass for financial survival.

Australian law lays between the consumer-driven EU laws and the company driven-US laws.

The ACCC is an independent government body specifically designed to prevent US-style corporate bastardisation. It's significantly resistant to US-style lobbying and has the power to stop company mergers, monitor and investigate pricing, regulate telecommunications companies, make unfair company policies illegal to enforce and works via a complaint system. (Meaning that individuals have the power to enact a government body to look into unreasonable practices.)

The ACCC is the reason why the iPhone is available on all competent Australian telecoms, why banks had to pass on savings to consumers and why ebay couldn't impose their paypal policy.

The smaller nature of the Australian population allows for this kind of organisation to exist, so I'm not confident this would scale without corruption to larger countries.(There is also an organisation which deals specifically with corruption.)

As with any system, there is an appeals process, many companies don't take this route (such as ebay) as the ACCC are usually just enforcing the existing fair trading & trade practices laws.

Re:Australia is a good common ground.

Technically, not correct. It is true that only three networks are offering the iPhone. However, as per ACCC policy, they have to offer a way to buy the iPhone by itself, unlocked and able to be used on any network. For example, Optus is selling the iPhone on the prepaid plans and offers an unlocking service (at a cost - just factor that into the price if you don't want to use Optus).

The ACCC could not force Apple to offer the iPhone to multiple networks; they could have just approached, say, Telstra. However, the ACCC could force Telstra to offer it unlocked, even if they were the only reseller.

My guess is that the terms & conditions offered by Apple to sell the iPhone weren't attractive enough for the 2nd tier providers (the ones who don't actually have their own networks fully in place; 3 [three.com.au] is sort of in-between; they have their own network covering major urban areas, but fallback to the Telstra network elsewhere). Of course, these terms & conditions are secret, so unless you're a major telco executive, there's no way to know.

All I can say is...

It feels great to be an Australian.

Umm.. it's not a freaking charity people ...

If I run a grocery store, I'm allowed to say what kinds of checks I'll take.

If I run a coffee shop, I get to decide who'se posters stay on the bulletin board.

If I run an actual, physical auction house, I'm allowed to say "all payments run through the house." In fact that's what all physical auction houses DO say.

There's nothing "free as in speech" about a service like eBay. It's a commercial enterprise. They could demand payment in chickens and the ONLY right anyone has is to simply say no and not use them.

Re:A dumb end to a dumb arguement.

That doesn't work when the only option presented to users is paypal, the eBay system wont let you finalise auctions until PayPal processing has occurred and eBay start removing listings that don't conform.

And no, you didn't get first post you idiot.

Re:A dumb end to a dumb arguement.

EBay is a medium to connect buyers and sellers, nothing more.

That's the mantra eBay has often chanted (usually in the context of somebody wanting to hold them responsible for some fraud that has been perpetrated), but the fact is that they have gradually done everything they can over the years to insert themselves between buyer and seller, and to be directly involved in every phase of the transaction. They have already previously tried to ban or at least discourage other forms of payment -- this is nothing new. They tried several years ago to force all sellers to complete transactions through eBay's own "Checkout" system, and only backed down after mass bitching by some very high volume sellers. They try to intimidate you into using only eBay's own on-site message system to contact bidders instead of e-mailing them directly.

The problem with these measures is, while still technically "optional," eBay does nothing to encourage such "rogue" behavior, and many (maybe most) users, both sellers and bidders, who have come aboard after these "options" were implemented are under the impression that they are mandatory because eBay pushes them constantly while burying the more seller-centric options in obscurity. Consequently, many bidders no longer understand the "eBay is only a venue" schtick, and believe that they are dealing directly with eBay. After all, when your messages all come through the eBay site, and you pay by clicking on buttons on the eBay site, you lose track of the fact that there are thousands of individual sellers who are the actual merchants. I've had problems with more than a few bidders who refuse to answer my e-mails or to pay me directly instead of through eBay's Checkout because they think it's not "official" otherwise, and that I am trying to pull some sort of scam on them.

Re:A dumb end to a dumb arguement.

A - EBay is a medium to connect buyers and sellers, nothing more.

B - This was a non-issue from the start.

Dream on...

A - Ebay is a money making machine and de-facto monopoly on online auctions.

B - Ebay owns PayPal - their auction interfaces are strongly interlinked and incentives in PayPal "Buyer protection" are predominanty shown on every(?) auction.

Look at 10 auctions and count non-PayPal (quick - CC) payments accepted - I found NONE!

They can easily effort dropping enforcement of PayPal - they get it anyway.
Maybe it was dumb to try it in that manner.