Thursday, May 15th, 2008

Shop now… Pay Later

Today, PayPal announced that PayPal Pay Later is now available on eBay.com for most purchases where PayPal is a payment option. For a limited time, buyers who pay with Pay Later can make no payments for 90 days for any purchases between $50 and $199.

Chris George, from PayPal’s financial product team, wrote a post on the PayPal blog summarizing what it means for eBay users.

Pay Later is incredibly easy for buyers. All you have to provide is your date of birth and the last 4 digits of your Social Security number, and you are approved in about 30 seconds. Once approved, existing PayPal customers can continue to use Pay Later as a funding option in their account. But Pay Later is an option even for buyers who don’t yet have a PayPal account.

To read the full story, click here.

Cheers,
RBH

Tagged: ebay, ecommerce, online purchase, paypal, safer payments

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20 Responses on this post. Click to add yours.

MsFishOn 05.15.2008 at 12:02 pm Said:

If buyer defaults on pay later payments, does Paypal come and take it back from the seller?

JJHOn 05.15.2008 at 12:38 pm Said:

Does the world really need more of a “Debt Load”?

If you can’t afford it, DON’T BUY IT. But, since this is between Paypal and the buyer, and [I assume] I get my payment immediately, that’s the buyer’s problem.

permacrisisOn 05.15.2008 at 2:14 pm Said:

All you have to provide is your date of birth and the last 4 digits of your Social Security number

If they’da done this at signup, ebay fraud would be almost non-existent. And there would be NO BAD BUYERS-

Well, let me rephrase that. There would be FEWER bad buyers… but they would all be crazy as an outhouse rat!

MechelleOn 05.15.2008 at 6:16 pm Said:

of course it means if the buyer defaults on PayPal payments that it is actually the seller who was defaulted on and we will take the hit not paypal - do we really need to ask these questions anymore? don’t we all know that everything eBay/PayPal does only results in a negative financial loss for us?

HenriettaOn 05.15.2008 at 6:36 pm Said:

I too would like to know the chargeback implications. Not much merchant information in that announcement.

HenriettaOn 05.15.2008 at 6:38 pm Said:

Glad to see you back RBH we missed you and were very bored. Mr Lieberman and the divine Ms N don’t seem to play well with others.

DaveyOn 05.15.2008 at 8:53 pm Said:

I’d like to echo the desire to get more details on how this scheme affects Paypal disputes, chargebacks, and potential fraud. If the buyer defaults and does not pay, what exactly DOES happen to the seller, on a shipment to a confirmed and unconfirmed address. I would assume being that you need a SSN, that this program is only open to US buyers, then?

Why are we nervous? Well, there is the obvious reason that somehow sellers will take the risk on default, and will be outside of the timeframe of filing a UPI and getting FVF refunds at 90 days.

HenriettaOn 05.16.2008 at 1:13 am Said:

Richard is there any comment (in view of Usher’s statement last week) on the seller survey received this week from eBay which asks:
“For the next question, we’d like you to consider the following statement outlining a possible new eBay policy:

To make eBay a safer place to buy and sell, sellers will be limited to accepting only the following safer payment methods for their eBay sales:

PayPal

Credit Card or Debit Card payments made directly to the seller’s Merchant Account.”
Thanks

Tony GOn 05.16.2008 at 1:18 am Said:

Obviously is eBay is making the credit decision and GE money is extending the financing, then they are taking the default risk. They are also reaping the rewards of financing so it would not make sense any other way.

Sellers will be unaffacted except for more buyers hopefully.

Kevin_TOn 05.16.2008 at 5:03 am Said:

The obvious question has been asked by just about everyone above. My first thoughts while reading was “What happens if the buyer defaults?” and “Will payments be reversed from seller PayPal accounts 90 plus days after the sale has been made?”

Sellers are a selfish lot, aren’t they - asking petty questions when they should be cheering Ebay’s innovations.

Cheers, Kevin

AmberOn 05.16.2008 at 6:47 am Said:

Ah, Henrietta, But it’s not Paypal ONLY!

LOL

I figured this was coming “sooner rather than later”

or if you prefer

“in months not years”

As most ebayers cannot get a merchant account, it will effectively make the site Paypal only except for the larger powersellers.

MechelleOn 05.16.2008 at 12:01 pm Said:

They already have paypal buyer credit- why would they announce this as though it is something new if it is the same thing?

I’m sure they would benefit from it, but the question is- in the situations where the buyer defaults on the payment who then will take the hit? If the buyer defaults PayPal isn’t benefiting are they?

Richard Brewer-HayOn 05.16.2008 at 12:39 pm Said:

@ MSFISH, HENRIETTA, DAVEY and KEVIN

Tony G hit the nail on the head above. PayPal Pay Later is issued by GE Money Bank. When a buyer commits to making a purchase through Pay Later, they enter into an agreement with GE and the seller receives the payment regardless of whether or not the buyer defaults on payment.

Full press release is HERE.

Cheers,
RBH

Kathy_the_green_fishOn 05.16.2008 at 12:50 pm Said:

Thank you for assisting me in finding another reason to leave. PayPal wants me to accept a payment from an unknown, unverified, non linked to any bank or credit card account?
I can get a social security card on the street for $50.

Where is the verified protection?

implogOn 05.16.2008 at 1:04 pm Said:

Richard:

Someone posted that you should guard your career from any negative, shall we say, fall-out from your association with the current eBay brain trust.

It is good advice.

You do not want to go down as the mouthpiece or apologist for the coming debacle.

The eBay decision makers have greatly devalued the eBay brand and eBay goodwill. Don’t let them devalue you. They may be nice folks to sit with in the eBay Cafe but caution is in order.

Take copious notes, speak ideas and perceptions into your recorder and save it all. Then write a book about end times at eBay.

MechelleOn 05.16.2008 at 1:12 pm Said:

I’m not sure how PayPal buyer credit works interms of reversals and charge backs, but essentially that is the question- can when using paypal buyer credit the buyer do a charge back? and can that be done with pay later thing? Does the use of paypal command the acceptance of pay later as it does with credit cards?

Here is the policy on charge backs and the consequence and liabilities for the seller- is this what we can expect with pay later as well?

Risk of Reversals, Chargebacks and Claims.
When you receive a payment, you are liable to PayPal for the full amount of the payment plus any Fees if the payment is later invalidated for any reason. This means that, in addition to any other liability, you will be responsible for the amount of the payment, plus the applicable Fees listed in section 8 of this Agreement if you lose a Claim or a Chargeback, or if there is a Reversal of the payment. You agree to allow PayPal to recover any amounts due to PayPal by debiting your Balance. If there are insufficient funds in your Balance to cover your liability, you agree to reimburse PayPal through other means. If the transaction is eligible under the Seller Protection Policy in section 11, PayPal will cover the amount of the Reversal or Chargeback and waive the Chargeback Fee, if applicable.

MechelleOn 05.18.2008 at 1:41 am Said:

I would actually like to know if eBay/PayPal are exuberantly dealing out credit that I will be liable for when the buyer defaults?

Also, Can a buyer using either PayPal Buyer Credit and Pay Later file a charge back?

Also, are both of these required of the seller to accept as payment?

Is eBay/PayPal out courting the consumers who are no doubt in default, broke, have no other means of payment, and under going foreclosure because I will be liable for the transaction in default and/or charg backs?

Is eBay/PayPal offering out credit essentially in my name to people who are likely to default on their credit loan?

implogOn 05.20.2008 at 2:56 pm Said:

Richard:

I’m wondering if you and your colleagues would agree that this eBay shopper is having an “excellent buying experience”.

(At least “Feedback Left For Others” is still “transparent”.)

President Norrington, Mr. Burke, your thoughts?

http://feedback.ebay.com/ws/eBayISAPI.dll?ViewFeedback2&userid=pichicago&ftab=FeedbackLeftForOthers

MechelleOn 05.20.2008 at 3:30 pm Said:

[Sentence edited: see Comment Policy] I wonder if he would have been pleased with same day freaking hand delivery.

I have had someone pay after 4 days of winning the auction- on a Saturday evening and email me Sunday more asking if I had shipped her package yet- and she was US and should certainly know you can’t ship from Saturday afternoon until Monday - OMG - this is going to be a lovely