eBay Australia announces Safe Payment Initiative

DaveyOn 04.09.2008 at 6:32 pm Said:

Oh, boy… This company has not only shot itself in the foot, it is trying for vital organs here soon.

I think there has been one other Aussie on INK so far–I hope we hear from them about conditions Down Under and impacts of this change. I have no idea what Australian financial or anti-trust law is like.

While not marked for the US (my guess is the political and anti-trust fallout would be too hard to manage), this will scare a lot of people as a precendent.

Paypal is great for buyers, honest or not. It can become a payment method of convenience or a magic carpet for scamming or abusing sellers (complementing the yanked ability for sellers to leave negative FB).

For even reputable sellers, Paypal is anything but safe. The US Seller Protection Program is as leaky as a sieve, with many ways for sellers to lose their funds to scams and dishonest buyers, especially with international shipments if the seller is not a Powerseller. The forums are full of sellers getting their first wakeup call, incredulous about what Paypal can do and does.

Kevin_TOn 04.09.2008 at 6:38 pm Said:

QUOTE: “Plus, eBay data (note to self: how do I get my hands on this data?) shows that in 2007 people who paid with PayPal were four times less likely to enter a dispute than people who paid with bank deposit.”

Is that based on flat numbers, or percentage of transactions?

PayPal has never particularly gotten a foothold in Australia as a significant proportion of buyers (and domestic sellers) have preferred to use direct deposit. If the quote is based on flat numbers, I wouldn’t doubt that the proportions are similar. If so, Ebay benefits as they earn an additional commission on both the sale, and on the postage charges by forcing all transactions to use PayPal. There are no direct fees on using direct deposit with Australian banks.

In June we will see how many sellers (and buyers) drop from the Australian site because they do not wish to deal with PayPal, and how many Australian sellers list in US dollars so that they can accept a broader range of payment options.

I am yet to decide how this announcement will affect my own business model. It will effectively substantially increase my fees on my Ebay Australia auctions, as I don’t currently use PayPal on those listings. There are many other implications about this announcement I am yet to absorb and address.

Regards, Kevin (in Australia)

Cliff AlipertiOn 04.09.2008 at 8:19 pm Said:

Hi Richard,

Thanks for this blog. There was a little gap in the postings for a few days and I thought it might be a bad sign, but I see you back regularly now, so great!

I just read this tonight and was glad to see you post it because I thought it was a potentially controversial topic that a lot of people might miss because it only applies to the Australia platform.

I’m with Davey on the notion that “this will scare a lot of people as a precendent” as my first reaction was “Uh oh!” but Davey is probably (hopefully?) right about the anti-trust fallout such a move would bring in the U.S.

I’m not a person who bashes PayPal, I love it and have been an enthusiastic user as a buyer and seller for over eight years now, but in terms of U.S. transactions I don’t see it being any safer than checks or money orders (I don’t know if there are special situations in Australia where it is safer than those methods) or even the good ole banned US dollars cash that I used to accept.

I think in the end moves such as this don’t cut down on disputes, what this move does is give eBay total control over disputes, and I think that may be what this is about.

Which does bring me back to my original thought of “Uh oh!”

Scott @ TradingAssistantJournalOn 04.09.2008 at 8:50 pm Said:

Richard,

I think I will have to side with Davey on this announcement. This seems to be a very arrogant and foolish move when merchants are exploring secondary channels in greater numbers every day.

PayPal has its benefits and yet also presents numerous problems for sellers and buyers alike. Some are PayPal fans, others are not. But to limit payment options for both buyers and sellers on any online ecommerce site in this way seems counter productive.

Buyers and sellers can find options now easier than ever before. Restricting those options to only one payment method would seem to encourage both to look for those other options more quickly. Is ebay really trying to encourage both to look elsewhere?

If this policy spills over to the USA or UK, I would say that Stephanie Tilenius was right when she intimated that we hadn’t seen nothin yet!

The resulting firestorm of implementing this type of policy in the USA or UK will be vast and intense.

Kevin_TOn 04.09.2008 at 9:31 pm Said:

Scott,
Ebay UK has already taken the first step of requiring PayPal to be a payment option on all listings (applicable later this month).

http://www2.ebay.com/aw/uk/200803.shtml#2008-03-21143719

Kevin

Chris @ TameBayOn 04.10.2008 at 1:27 am Said:

“I’ve been told that there are no plans to go to a PayPal-only model for eBay in other markets – US included”

And did you believe that? Haven’t they warned you about eBay speak yet?

If you look at the marketplaces around the world they start off without PayPal, when they get to a million or so items on the site they add PayPal, when they get established users are pushed more and more towards PayPal and now we have eBay Australia going PayPal only.

“No plans” is simply another term for “no timescales”. It’ll happen one day soon. The question is will it be a bad thing?

MechelleOn 04.10.2008 at 2:24 am Said:

I would love to see eBay.com pull that one - I knew last year when they began positioning this BS in the UK with the “select category - you know high dollar” listings they were evaluating the reactions to see how much of a stink it kicked up- must not have been to much, because they have it going that far here now.

I don’t know the marketplace laws in AU or the UK, but this PayPal only scheme just won’t fly here.

They have already effectively washed the minds of eBay vendor’s consumers with the PayPal is the only safe payment method message on every freaking screen. eBay is hanging on by a cuticle rip as it is with their market manipulations in their current set up. As I stated before they have only been buying their way out of having their unethical business practices exposed. However,, this type of action would probably take a rather large lump out of the 5 billion they are sitting on right now while they wait for their projected 2008 3 billion to roll in. eBay you might want to take pause and consider where you’re located - San Jose (Santa Clara) CA US- Regardless of what your little AU pilot study reveals I suggest you recognize the variables in the two separate locations before try and bring that hammer down.

This blog is like talking to a freaking wall- even if eBay was actually staring and reading every word they are to arrogant to consider reality and choose to spend their days in some enigma of oblivion.

bonniOn 04.10.2008 at 2:43 am Said:

And when someone sells an expensive item with PayPal, are they going to get their account frozen and have to go through the monumental hassle of “proving” they’re legitimate?

Also, what’s being done to protect sellers from unscrupulous buyers who claim an item is “not as described” and send back not the item but an empty box, and then are given their money back by PayPal, leaving the seller out the money AND the expensive item?

Is PayPal going to start CONSISTENTLY accepting Australia Post Registered mail as proof of postage? Will they start to accept Australia Post international insured post for international transactions?

There are so many problems with this isn’t not even funny, and it’s yet more proof that eBay are totally out of touch with their sellers.

bonniOn 04.10.2008 at 2:46 am Said:

Oh, as to the question of anti-trust laws, I’m told that many people are already submitting complaints to the Australian Competition and Consumer Commission (ACCC). We’ll see how that turns out, I guess.

In the meantime, Australia does have several other options, including a small but growing Australian-based auction site (just Google it, you’ll find it quite quickly).

KittyOn 04.10.2008 at 4:49 am Said:

eBay is doing this because the laws in Australia allow it to do so. Once it monopolizes the payment method, could a huge fee increase be far behind?
Unfortunately I think the answer will be yes.
I’m in the USA and I hope anti-trust laws will prevent this situation from happening here.
Even though most of my customers do pay in Paypal, choice in shipping and payment methods are the hallmarks of a free market.
EBay must choose whether it is just a venue, or take control of the site. Manually remove all the fraud.
Make us buyers and sellers feel like we are getting something for its high fees and manipulative searches.

implogOn 04.10.2008 at 7:13 am Said:

There is a PayPal Discussion board at the Aussie site. You’ll find the postings strangely similar to the eBay US boards in thought, word and deed.

http://forums.ebay.com.au/forum.jspa?forumID=1008

Randy SmytheOn 04.10.2008 at 7:43 am Said:

Amazon requires Amazon payments for purchases on their platform but they’ve done this from the beginning. eBay is adding on all these layers of regulation to the marketplace that was celebrated for being “just a venue” Is it any wonder people are upset.

It like bringing the law to the Wild West

Patricia 1On 04.10.2008 at 9:31 am Said:

Ebay has a long way to go to compete with Amazon. I still buy on Amazon - not Ebay because 1) customer service is a reality there, and 2) I can charge directly to my credit card and not have to deal with online payment handlers. On the one time I had a problem with a seller, I simply left my phone number and Amazon called me back directly within 30 minutes and assured me that if my item wasn’t received they would refund my money. Ebay is light-years away from anything remotely resembling service like that no matter what they try to do otherwise. In these respects - they still ARE only a venue and nothing more! No matter how badly they bash their sellers with policies and regulations - they still depend on automatic policies to do the job for them and they do NOT stand behind either the customer or the seller.

Patricia 1On 04.10.2008 at 10:10 am Said:

Richard - perhaps they want both - but they don’t want retail from ebay. I buy from solid retail companies and now I like the idea that they are all online. Recently bought a new vacuum from Walmart online and my Wacom drawing tablet from Best Buy online. I believe in companies that will be there when I have a complaint…no hassles. In that respect, Amazon provides that security….ebay does not. However, when I broke my corningware baking dish circa 1963 I went to ebay and got a replacement in new condition. Same with my corningware teapot - which isn’t even made anymore…back to ebay. That was such a pleasurable transaction that I actually wrote the seller twice to let her know how utterly pleased I was to find that pot and pleased with her service. Right now I’m replacing pieces of my Oneida silverware circa 1963 and getting those on ebay as well. THESE are the things that made ebay famous and what we sellers are fighting for. I want ebay to stay out of retail and leave it to the big stores who do it so capably! I don’t think that’s so hard to understand. Ebay has no customer service to speak of and a really dubious reputation for scammers and fraud - they need to be working on improving that aspect of their business instead of looking toward a retail situation.

JJHOn 04.10.2008 at 10:35 am Said:

I want the ebaY that’s more like 1998. Unless you were there, selling at that time, you can’t know what it means. So, lets compromise. I’ll take the ebay of last year, before all these bonehead policy changes.

I DON’T WANT RETAIL FROM EBAY! I can go anywhere for that. I want buyers to find the unique items I sell, not be confounded by “best match”.

This whole “Buyer Experience” thing is really starting to look like what it really is, an attempt to make more money for Wall Street Investors. Plain and simple greed.