eBay Australia Makes PayPal Mandatory

An anonymous reader writes "Australian press are reporting that eBay is using Australia as a guinea pig to trial a new policy where all other modes of payment are barred except for PayPal. If successful, eBay will roll it out to other markets."

Re:Definitely time to look for an alternative :(

[packeteer]

I no longer use my paypal account. After getting burned bad by paypal i was done. My paypal account was linked to my ebay account. My paypal account was emptied and left with a negative balance. Had i used ebay again paypal would have just took all the money. Remember people they are not a bank. They are just some people holding onto your money. How would you trust someone you dont know to hold your money?

Maybe you think my story is isolated but read online. Paypal routinely freezes peoples accounts only to never let them have their money.

Check out paypalsucks.com

PayPal is not a Bank

[freedom_india]

Firstly, although PayPal may have a banking license in switzerland, it is not a bank per se and the Australian Reserve Bank will not guarantee my money with paypal if any.

Secondly, As a bank i have recourse to my money when i demand it. Period.
With paypal i have to jump through many of their fraud hoops which assumes, as a recepient, am guilty of money laundering unless i prove myself to be innocent. That is not how a bank operates. And if a bank will not pay a lawfully presented demand for payment, i can force the bank into liquidation single-handedly. (Long before that the Reserve bank will intervene, but that is beside the point).

Thirdly, PayPal does not follow banking laws in opening accounts with it. Not even in fact the [in]famous SNOW accounts of Citi in early 1980s in US (Negotiated Order of Withdrawal).

Fourthly, if PayPal goes under, who will repay my money with them.

I think the ARb should intervene and either force Paypal to be a "bank" (which is unprofitable for them), or close down.

Sourer Grapes

[pilsner.urquell]

I have a bother that worked for eBay from the beginning. He loved it until they bought PaPal and credits the move with his eventual leaving eBay.

Re:I refuse to buy from sellers who dont take PayP

[freedom_india]

Not exactly. When a credit card holder disputes a debit, the bank contacts the merchant first and asks him to verify the debit he made. It also gives the merchant details about who disputed what, etc, plus a specific time.
Within the time, if the merchant cannot produce proof, the cardholder's complaint is sustained.

At NO time has the bank the legal authority to debit or even block access to the funds in merchant's account.

This is different from paypal, which is under no obligation to contact you, can and will block your account, and withdraw funds from it without due process.

And that is why paypal is different from a bank.

Not just Australia

[mattbee]

In the UK (3x as many people as Australia) I got an email to say that Paypal *must* be offered as a payment option, not that it must be the only payment option. So I imagine they are testing different policies in different smaller markets. It makes sense to try to streamline it and get a few more % of each sale - eBay is still complicated compared to Amazon's sales process and Amazon seem to get away with taking almost 10%.

Is this illegal?

[lewko]

I understood that by law, merchants are required to accept legal tender to pay a debt. In other words, there's no way they can prohibit people paying cash once a debt exists (i.e. they have one the auction).

Admittedly the above is from my recall of High School business studies, and IANALADHAT (I am not a lawyer and damned happy about that).

meanwhile...

[SharpFang]

eBay Poland is still dead.

After introducing fees for their auctions, they dropped from their 3rd place with a good chance to become 2nd to being somewhere along with the two last places - auction sites that are subject-specific, collector auctions. Very few desperate sellers use it, and over 90% offers 'from Poland' are listed as 'e-book, electronic delivery only, free shipping world-wide', foreign auctions.

Anti-Trust issues?

[Anonymous Coward]

Ebay is pretty much THE auction site on the net, and they own paypal. this sounds like leveraging a monopoly in one market to effect an advantage in an unrelated market and anti-competitive behaviour to me.

the EU has given microsoft plenty of shit over the years for anti-competitive behaviour, it will be interesting to see if/what kind of flack ebay attracts over this.

Wow, that'll stop me using eBay, period.

[Peregr1n]

I use eBay occasionally but my email address and bank details are barred from PayPal, so if this happens I won't be able to use eBay at all.

I'm barred because I (as a seller) was scammed and left £300 out of pocket - when I tried to complain to PayPal, I couldn't even get through to a human being, and they automatically assumed that I was the fraudster, and shut down my account. Ironically, they were slower at shutting down the scammer's account on both eBay and PayPal, despite my attempted warnings, and they went on to scam a few other people before they were finally barred.

By the way, is there a decent alternative to eBay, or have they got a complete monopoly?

Isnt this a violation of competition laws?

[jonwil]

How is this NOT a violation of the trade practices act?
Anyone know the right way to get the ACCC to investigate this?

Re:Legal status of Paypal?

[eiapoce]

Can anybody explain to me in what way entrusting funds to Paypal offers any real and accessible legal protection against fraud?

That's the point. In a normal situation the Ebay feedbacks should protect against scammers and the police should prosecute the scammers. Handling the "protection" job to anyone else than public enforcment is BAD.

Re:Alternatives

[falsemover]

I buy all my "fashion" from second hand clothing shops and "op shops". Far cheaper than ebay as I don't get stung with postage for each item.

Oh, my girlfriend would "never" buy second hand clothes. She thinks I'm a tramp for doing it. But hey, I spend about $300 per year on clothes as compared to about $3k.

Re:Definitely time to look for an alternative :(

[johnw]

The similarities between Paypal (not a bank) and eBay (not an auction house) are quite marked. They both seem to want to desperately defend there "not a ..." position because it means they can have the benefits without the responsibilities. Like so many others I have long refused to use Paypal because of their shifty behaviour. Until Paypal is a proper bank (with all the safeguards that that requires) and eBay admits to being an auction house (ditto) I won't be using either.

Re:Is this illegal?

[xaxa]

There is no debt. There is an offer to sell, and the offer requires payment with PayPal, but there's no debt. IANAL either.

Re:From the horse's mouth

[MikeFM]

PayPal sucks for seller's too. They have the bad habit of doing things like deciding to lock your account and refund all your recent transactions without adequate explanation or any means of recourse. Who knows if they actually give this money back to the buyers or if they just keep it.

I for one refuse to use PayPal ever again. I think we need something better than credit cards for buying and selling online but PayPal isn't the solution. It's became very evil since eBay bought it. I've considered creating my own alternative but I think to compete with PayPal and credit cards any alternative needs several major backers such as Amazon and iTunes if it is to have any hope. I'm surprised none of them have formed together to form an alternative as it'd seem they could easily boost their profits by cutting the expense of PayPal and credit card processing fees. If they saved a dime per transaction with the volume they do it'd be a fair savings.

A free, easy to use, well advertised, auction/store + online cash alternative to eBay + PayPal is a killer app waiting to happen. Lots of people hate eBay and PayPal. Lots of alternatives exist but none I've seen are both easy to use and well advertised.

Re:From the horse's mouth

[eiapoce]

I tell you what's up with me.

I honestly sell my used stuff on ebay, and I am constantly discussing matters with buyers. If a problem arises ebay does either nothing or its best to screw me, This happens when I am the buyer and when I am the seller. And when selling even if a problem does not arise I am supposed to pay twice at least for the same item: Listing Fees, Final Value commission, Paypal submission fee.

By reklessly complying with those rules I managed to make 150 positive feedback and a couple of negs... guess where the negs come from? Paypal costumers. Ebay/Paypal on the other hand managed to make 200+â out of me wich is extraordinary unfair since their costs are just website hosting/band and staff. Also they are dropping the feedback system wich will lead the marginal utility of selling through them 0 (Call it costumer un-fidelization)

See any reason to be "not satisfied"?

Not Greed, fraud protection.

[Anonymous Coward]

Again people over overlooking the big picture. Search eBay Australia, you will see that most of them are putting their banking information or requesting bank deposit. This payment method has zero recourse, if the seller decides to keep the money and not send you the item, you are screwed. The rest of the world more or less prefers paypal anyway, but Australia is unique in that their preferred payment method is a source of fraud.

Any maybe it wasn't noticed by the feebay crying crowd, but Australia's sellers last year were forced to accept paypal if they offer paypal to anyone because their standard payment phrase was "paypal only for non-australians" which again was because they would sometimes have oodles of payment terms.

Mature Audiences section can't use paypal.

[lordbry]

If some of you will recall, ebay doesn't allow you to use paypal for the Mature Audiences section. Does this mean they are planning to get rid of adult items?

Bye bye, eBay

[ajs318]

I have always used postal orders, made out to CASH, when paying for goods bought from eBay. I feel this is the safest form of payment because of all the gaps in the trail. The seller doesn't need to know any more about me than where to send the goods, and I only need to know where to send the money. The clerk at the post office where I bought the postal order doesn't know where I am going to send it, and once the PO is in the post, there is nothing to link it back to me. The clerk at the post office where the seller cashes the PO doesn't know where it came from; and once the goods are in the post, there is nothing to link them with the seller. If any unauthorised party intercepts either transaction, the recipient can reasonably say they know nothing about it. After all, I have no control over some stranger who decides to put something in an envelope and write my address on it! Sometimes, that level of plausible deniability is very important.

If they start insisting on PayPal, I will cease using eBay. I do not want my transactions monitored so closely, thank you very much. Part of me is even surprised that eBay have not started a delivery company {or bought up an existing one} and started trying to strong-arm people into using that .....

Double dipping in my walet!

[Anonymous Coward]

I will stick with craigslist. at least there I deal with most people in person and there are no fees.

Re:double dipping?

[marcop]

You forgot that you also have to pay Paypal a fee to receive the money. Receiving and getting of funds to and from Paypal are two separate fees. It may be free to transfer funds to a bank account from Paypal, but there is no way I am going to give them my banking information. Therefore to get a check from them they will charge $1.50.

Re:From the horse's mouth

[geminidomino]

Google products would be far better if the results weren't clogged full of ebay spam...

Identity Risks

[Whiteox]

A month ago I got an email from Paypal to update my credit card details as my card went out of date.
I proceeded to update the details, when I was informed that people can pay me with paypal, but I couldn't withdraw any funds unless I fax them 2 forms of identity.
I immediately baulked at this. They are asking for details reserved for Banks etc when they are not a bank. In fact they are a private escrow company without complying with anything.

But my problem is that I do commission sales for people who have no idea how to sell on-line. Big, single items worth hundreds or thousands. So now I have to prove my identity with these documents, just to be able to draw money out of the account.
The whole thing sucks and I'm definitely going to say "PayPal NOT preferred" from now on.

re: recommending Craigslist

[King_TJ]

One big concern I have with Craigslist is, eBay apparently invested heavily in them already. I used to wonder why they'd possibly see any benefit to dumping a bunch of money into what's essentially a free version of newspaper classifieds. (I mean, Craigslist has pretty much NO mechanism to collect money, and no rating or "feedback" functionality on the site, seemingly making it useless to something like the eBay business model.)

But now I'm wondering if this was a "plan B" for them all along? If eBay goes "sour", they could leverage Craigslist as an alternative? They probably bet, all along, that most of the people who'd defect from eBay over issues like "mandatory PayPal usage" would wind up on Craigslist. They could institute policies of charging monthly subscription fees to post on Craigslist or something - and keep on taking money, even from the people who thought they were dodging them.

Re:Definitely time to look for an alternative :(

[petermgreen]

What I wonder is why they moved from britan to luxembourg. Was it simply a better tax situation or are there some loopholes in luxembourg banking law that they want to exploit.

also that only applies to the european branch of paypal. The US branch is afaict where most of the horror stories come from.

Re:From the horse's mouth

[electrictroy]

Right now, in the U.S., paypal is not required. You may accept check, money order, credit card, or some other internet pay service.

If Ebay Did make paypal mandatory, that would be a violation of Antitrust/monopoly laws, because it stifles competition & limits customer choice to zero. I'd start calling my various contacts within the U.S. and Pennsylvania government to see if I can talk them into Prosecuting Ebay in a court of law. Ebay's done a lot of dumb decisions lately, and pardon my French, but they are _______ me off. This would be the final straw to make me stand-up and demand justice & punishment.

I use Ebay like a garage sale, selling-off used but still "like-new" items.

But they have steadily made me feel unwelcome, as if they don't want my business, and I'm sick of it. Time to tear-down that arrogance the same way AT&T, Microsoft, and the CD Cartel were brought to task. Remind them of their true position in society (servant to the customer).

Re:Definitely time to look for an alternative :(

[donstenk72]

I am currently £400 in minus on my Paypal account because they refunded a conman without my permission. It has been like that for 3 months now. Since I could not use that account anymore I am now using Google Checkout. What do you recommend I do when Paypal start asking for the money back?

Re:From the horse's mouth

[Reziac]

I can't speak as a seller, but as a buyer I was impressed with the security and policies from Kagi (the first online payment processor I used to pay someone, many years ago). I did get their seller contract to look at and it seemed straightforward and very specific. http://www.kagi.com/ [kagi.com]

Anyone have any good, bad, or indifferent experiences with 'em to relate?

As to eBay's new Paypal requirement, I think this is solely a move to ensure that eBay ALWAYS gets a cut from the payment processing. If some people lack the required resources, or prefer to use other payment methods, oh well, they weren't profitable to us anyway!!

Re:From the horse's mouth

[electrictroy]

(shakes head)

It should be obvious.

Requiring paypal only (not check, money order, nor credit card) limits the SELLERS' (who are the true customers of ebay) to zero choices. i.e. No choice. And that is a violation of various anti-monopoly laws within the United States (and likely the European Union too).

Re:From the horse's mouth

[Poruchik]

Google checkout is NOT allowed on ebay as one of the payment options. I was warned about it when I tried to put it in my listings.