eBay's Plan to Force PayPal Rejected Down Under

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."

Re:Right, because PayPal's better...

[Anonymous Coward]

The reason why you don't get cash discounts anymore is that it's against Visa/MC/AmEx merchant terms and conditions.

It's even disallowed to require the transaction to be over a certain value to accept payment via credit cards.

Re:Can somebody explain?

[arivanov]

1. It is more counterfeit than stolen.

2. The french have actually charged eBay with both on a number of occasions.

What about those of us who SUED PAYPAL and WON

[RaigetheFury]

I was part of the massive lawsuit against Paypal back when there were plenty of scammers. One such tried to screw me and even though I provide more than enough evidence to PROVE without a shadow of a doubt this guy was scamming the system, committing mail fraud, AND on top of that was using stolen credit cards, AND i gave him his confirmed address...

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!

Re:Right, because PayPal's better...

[FishWithAHammer]

Lots of places still do minimum limits, though. "Your transaction must be at least $3.00 to use a credit card here."

Re:Can somebody explain?

[mpapet]

At best, they would argue they are a payment processor. A Bank does many other types of cash and lending operations.

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.

Birds of a feather....

[Chas]

Sorry, but EBay is just as shady as PayPal is.

I refuse to EVER give any more money to PayPal or EBay again.

Re:Can somebody explain?

[Z34107]

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.)

Re:Paypal sucks blah blah

[aonaran]

Where do you think you can get a service that allows you to accept CC payments without paying them a transaction fee?

Merchant Visa/MC accounts with your bank will charge fees too. How do you think they make their money?

Re:Paypal sucks blah blah

[Slimee]

Yeah but the thing is, with an account where I can't accept these transactions, people are still ABLE to attempt them.

It's very frustrating to cancel a transaction, send an email to the person telling them I can't accept it and to send me the money through their checking account instead. It's a process that shouldn't have to happen. If I don't have the business premier account or whatever it's called, then people shouldn't be able to initiate a credit card transaction.

Paypal tried to steal $1200 from my wife

[shadowofwind]

Paypal claimed the seller had the money, and told the seller we (the buyer) had the money, and lied and stonewalled for months. Finally they just gave the money back without explanation after a state Attourney General inquired on our behalf.

The previous time I posted this on /., I was modded down as a liar. But unbelievable as the stody is, it is the truth.

In fairness to Paypal, our experience was shortly after it was purchased by EBay, so probably EBay cleaned it up some since then.

Is this issue PayPal or Ebay?

[awjr]

From what I'm reading above, there is a major issue with dodgy sellers on Ebay. Paypal are just handling the payment and offer better safeguards than a transfer to a bank account. TFA is focusing on the fact it would cause a monopoly situation and the ACCC wants competition in the market.

What actually needs to happen is the ability to have a "one click" report item as dodgy. Ebay gains too much from providing a lax vetting process to ever get serious about it.

When governments actually get serious about this and start arresting Ebay executives and putting them in prison rather than fining them pathetically small amounts is when we will see them doing something about it.(http://news.yahoo.com/s/afp/20080604/bs_afp/franceluxurypiracytrialusebay))

Re:Can somebody explain?

[InvisblePinkUnicorn]

The real question to ask is how the government can get away with forcing any person or company (bank or otherwise) to do with their property other than they wish.

Comment removed

[account_deleted]

Comment removed based on user account deletion

Re:Right, because PayPal's better...

[FishWithAHammer]

Merchants are not allowed to set minimum or maximum amounts for transactions on Visa. I'm too lazy to find it, but I know Mastercard has a similar rule.

Right, but that doesn't mean that they don't do it. Here in Maine, I would say that more stores have minimums than don't.

Re:Can somebody explain?

[Anonymous Coward]

But they are a bank, they hold a banking licence in Luxembourg

How CC and Merchant accounts really work....

[ryanhull]

Offering a Cash discount (Discount for Cash) is not against ANY CC company or processor agreement. What is NOT allowed is charging a fee for a CC transaction, and / or a minimum / maximum limit of the transaction. Any retailer has the right to offer a discount for cash. What they can't do is list their prices in any advertisement, publication, etc without stipulating that the price shown is for cash. If it's not on the advert, then they can't charge more for a CC transaction. Furthermore, a lot of retailers DO offer a discount for cash. Usually a pittance, 1-3%, but nonetheless a discount. Also, people need to know how to use their check-card at retailers as well, so that they don't get hit with transaction fees from their bank or the retailers processing agent. If anyone has a check-card / cash-card, etc. that is labeled as MC or VISA, and is tied to a checking account, etc., make sure you choose CREDIT, and not debit as the payment method. If you choose debit, and type in your PIN, you get charges, not the retailer. YMMV. I've done POS work and have dealt with several of these terms and conditions. You'd be surprised how quickly a merchant gets rid of those minimums or fees when you complain to the CC company about their deceptive practices. When they do this sort of backhanded crap, and get reported enough times, the merchant and/or CC company will pull their merchant account, and/or fine them for violating the terms of the agreement they have in place. Works for MC, VISA, DISC. Not sure about AMEX, et al. Just an FYI.

Re:Right, because PayPal's better...

[FishWithAHammer]

Report them to your bank/card issuer! Nobody will stop doing it if we let them get away with it.

Why? I don't use credit cards there, and I understand why they do it--below $3.00, they lose money on the transaction.

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?

Misleading Title, DRAFT and PROPOSES, idiots

[Anonymous Coward]

Hey, This isn't a done deal yet.

eBay can still sit on the current situation where everyone is required to offer PayPal.

It's the banning of all other payment methods that the ACCC has PROPOSED eBay put on hold for further review.

Like aways, slashdotters don't RTFA.

Re:Right, because PayPal's better...

[AmiMoJo]

Unfortunately in the UK banks are no longer required to help you out or issue chargebacks in cases involving PayPal. The reason is that the banking code only requires them to do anything when you have a dispute with the person you had a transaction with, which in this case is PayPal. You send the money to PayPal, and then in a separate transaction they send it to the seller. So, if you problem is with the seller, they don't have to help.

I started a petition to get the law changed: http://petitions.pm.gov.uk/3partyccs/ [pm.gov.uk]

Re:Can somebody explain?

[TheRaven64]

PayPal doesn't just do payment processing. When you create an account with them (which you need to do in order to pay someone), you put money into this account and then transfer it to the seller's account. You can either do this in one step, or put the money in the account first and leave it there for a while. The seller can then keep the money in their account or transfer it elsewhere. If they leave the money in there (or if you put money in your account and leave it there for a while without sending it to someone), then PayPal do pay interest.

They give you an account, into which you can put money. They look after money for you and pay interest on it. Sounds a lot like a bank to me...

Extortionate fee system

[hack slash]

Whilst I've been using PayPal for about 8 years now and find it's very useful for paying seller, one fact irks me somewhat, with a premier account they skim money off ALL transactions you receive even if the sender is using funds held in their PayPal account.

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:Right, because PayPal's better...

[GeckoAddict]

When I worked for a large bank , the rule was that they were not allowed to specify different pricing for CC vs cash. A discount for using a particular method was allowed under the regulations.
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...

[TheOriginalRevdoc]

This was outlawed here in Australia a few years ago, so merchants are now free to charge a fee for credit card purchases (which some would call offering a discount for cash).

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 applying a small sales tax to nearly all retail sales. Estimates varied, but it was generally thought to be around 1% to 2%. It doesn't sound like much, but across every sale in the country, it's a huge amount.

Most big retailers continue to do this, but smaller retailers either have a mimimum amount for credit card purchases, or tack on a fee of around 3%.