Neil / August 17th, 2009 at 11:53 am

Just FYI, eBay Selling Manager Applications subscriptions are managed by eBay and payments are made directly with your PayPal account. When you do sign up for an application, PayPal asks you to pre-approve a certain dollar amount. This is a very nice security feature that assures a user that the application can only charge so much in a certain time span.

So, for instance, with ahTEXT Mobile Messenger, it is free to try for 7 days, and then $3.95 per month thereafter. When you sign up, you are asked to pre-approve an amount of $100. That means that eBay can bill you $3.95 automatically each month for the next two years, or until you cancel your subscription. When the pre-approval limit is reached or expires, you will be asked to pre-approve again. Again, this is a really nice security measure that should give subscribers peace of mind that eBay and PayPal are looking out them.

It’s something new that sellers have probably never experienced before, so I just wanted to give them a heads up.

Take care,
Neil @ ahTEXT

Neil / August 21st, 2009 at 6:29 pm

Hi Henrietta,

The payment system is based on the new PayPal Adaptive Payments API, not on the legacy monthly subscription service. There are actually two benefits up front.

The first benefit is for the developer. The developer can build dynamic, and very specific payment plans programmatically (on-the-fly). I’m not sure if the documentation/specification for PayPal’s Adaptive Payments is public yet, so I won’t go into too much detail.. but let me assure you, it’s incredibly awesome from the developer and business perspective.

The second benefit is for the end-user (subscriber/buyer). The fine print of each purchase/subscription cannot be hidden. In some cases, the pre-approval screen can show everything, from the billing interval, day(s) of the months you’re billed, maximum amount to be billed per interval, and the TOTAL amount that you can be billed during the entire term of a particular pre-approval agreement.

So, from a businesses perspective, there may be some thorns.. such as having to ask the subscriber to pre-approve at the end of the spending cap or period (whichever comes first). On the upside (and this does not apply to ahTEXT’s flat $3.95/month billing), if I wanted to create a more dynamic pricing plan (usage based, for instance), I could offer that to my subscribers with the new PayPal Adaptive Payments platform.

Finally, on the buyer/subscriber side in the dynamic pricing example — the upside is that I have this flexible plan I’ve subscribed to, however, there is an explicit spending cap per the agreement.

To answer your question: So please explain where the ’security benefits’ are to me, not the vendor, in authorizing a twenty five month subscription paid in advance?

1. Actually, the maximum term is 12 months. Our pre-approval amount on ahTEXT within eBay Selling Manager Applications should be $47.40 at $3.95/mo. (we planned on charging more, initially)

2. You are not authorizing a “payment in advance”. You’re authorizing a maximum cap that can be billed to your PayPal account for this specific subscription plan. Whereas the language on pre-approval page for eBay Selling Manager Apps subscriptions isn’t exactly clear, I assure you that I have personally worked with the PayPal Adaptive Payments API, and it’s completely geared towards full disclosure of the subscription to the customer.

Take care,
Neil @ ahTEXT