Imagine that you’re Alice, proud owner of the new shoe shop at your local Westfield. Bob is buying a pair of brogues. As Bob opens his wallet, suddenly Frank Lowy appears. “There’s some terrible con-men around,” he intones gravely. “Let me handle that.” He grabs Bob’s cash and pockets a fiver. “I’ll give you the rest next Wednesday,” he says, and disappears.
Alice, understandably, is mightily p-ssed off.
Sellers on eBay have been mightily p-ssed off overnight too, because the world’s biggest online marketplace has just pulled the same stunt. From 21 May, all eBay sellers must offer PayPal as a payment method. And from 17 June — unless the buyer is physically collecting the item from you or for a few big-ticket categories like real estate and motor vehicles — they must pay you via PayPal.
eBay owns PayPal. So apart from their fee for handling the sale, they’ll now also get a PayPal transaction fee. Meanwhile you don’t get your money for days. Unlike an overnight bank transfer, moving funds from PayPal to your bank takes 5 to 7 working days — despite being more expensive. You could leave the funds with PayPal, but you don’t get paid interest.
Now PayPal isn’t necessarily evil. Indeed, for small businesses setting up an online presence, it is often the most cost-effective way to accept credit card payments, and the easiest to set up technically. But clearly there’s a big question here about anti-competitive behaviour.
PayPal also has a poor reputation for dispute-handling. The internet is littered with stories about people’s accounts being frozen without warning, about consumer credit rights being ignored because PayPal claims its terms of service override them — at paypalsucks.com and here for starters.
eBay is spinning this as being “for your protection”. Their announcement uses words based on “safe” six times, “protect” 12 times, and “secure” twice. But then bullies demanding a percentage of your business takings has always been called a protection racket.
Requiring customers to use other services which you own? ACCC, are you watching?
Maybe this anti-competitive change by eBay is just the leg-up that Australian online auction house OZtion needs.
Stilgherrian blogs at stilgherrian.com
It’s actually a great move that eBay has made. Paypal in general is much more secure and simple. All the smart users have it already, so its about time everyone did.
I won’t buy anything on eBay unless I am able to pay via Paypal. For a buyer, it is safer and easier than any other method. Having said that, it seems extraordinary that Paypal will soon be the only way to pay for a purchase. Many buyers are completely happy with bank deposit and other payment methods and I know that Paypal is very expensive for sellers, so surely buyers (and sellers) should be offered a choice. It would suit me to see Paypal availability being enforced for every sale, but other payment methods should also be available for those who choose to use them – the operative word being ‘choose’. As an intelligent adult I hate to be told “we’re forcing you to do (x) for your own good”, but when the enforcer stands to benefit directly (and secretly), it really makes my blood boil. Oztion must be rubbing their hands with glee as eBay buyers and sellers desert them in droves!
Paypal is not good for consumers or sellers – it’s expensive and prices the little guys out of the ebay market! I’ve set up a facebook group: “Not happy EbAY! Protest against Ebay.com.au changes to selling!” to try and persuade ebay to give these changes the boot!
http://www.facebook.com/group.php?gid=11805383588
Paypal is a good tool for buyers but has a real downside for sellers – not just the matters in the article but also very dogey exchange rates on O/S purchases. Ebay/Paypal is way too greedy!
I have used both PayPal and bank deposit to buy and sell stuff on eBay, and want to continue to use both. I use bank deposit in Australia to avoid the exorbitant PayPal fees, and PayPal for overseas transactions or on request. If eBay takes away my choice, I will seriously be considering switching to Oztion. I am old enough to look out for my own “safety” and “security”, thanks very much eBay.