eBay makes PayPal mandatory

Let's say you sell an item for $10 on ebay.

You are out about $0.35 for the listing fee, another $0.50 or so final value fee. Then about another $0.65 paypal. It is just pathetic.

The government needs to step in and force Paypal to become a bank and operate by the rules. The fact that they probably have more money in transactions than most banks, yet there is no oversight or protection is a little scary.

tekz999 said:

Are you guys aware that ebay take commission 4 times per transaction?

1. listing fee
2. final value fee
3. paypal credit card processing fee
4. -0.2 to -0.3 currency conversion rate withdraw

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bmugford said:

Let's say you sell an item for $10 on ebay.

You are out about $0.35 for the listing fee, another $0.50 or so final value fee. Then about another $0.65 paypal. It is just pathetic.

The government needs to step in and force Paypal to become a bank and operate by the rules. The fact that they probably have more money in transactions than most banks, yet there is no oversight or protection is a little scary.

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I'm curious. If they become a bank, then would all of us automatically own a US bank account?

I am not sure the the legalities of that, but I know right now that Paypal probably processes as much money in transactions as most major banks. However, they offer no FDIC protection or government oversight. They can arbitrarily hold funds with no method of appeal.

PowerUp said:

I'm curious. If they become a bank, then would all of us automatically own a US bank account?

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Some points are here are simply incorrect, so I feel I have to correct them. I do hate ebay and Paypal, so I will start with that. First of all, Paypal does pay a competetive interest rate on your balance. Second, ebay is not trying to destroy shareholder value, they are trying to keep their value by doing as little work as possible and taking as few chances as possible, so they will just leach off of the powersellers, until they can't suck anything more out.

About the scammers. It is not that ebay does not do anything about them, it is that they are doing exactly what they want to do about them, which is nothing. People think that this is counterintuitive, until you hear ebay bragging about their low fraud rates, I think last I heard it was .5%-1.5%. If they started catching the scammers, the percentage would shoot way up, probably over 5%. Also, scammers seem like they use special features more often to prop up their fake sales, and these fees are non-refundbale to ebay. So ebay wins that way too.

Their fees can actually be huge, more than listed above, if you use extra pictures or any of their special features. I used to sell very expensive items on ebay and with special features, I would often times pay 20-30% of sales just to ebay and Paypal for fees. I also hate how they try to trick the sellers into calling every fee increas a decrease, as if we are not smart enough to see a higher number than before.

I have been warning about ebay and Paypal abuses for a while and knew that they were moving towards this step. I think that I even mentioned it on this board a while ago. It is completely illegal, the textbook defintion of monopoly abuse, far worse than anything Microsoft ever did. You are not allowed to use your monopoly in one market (online auctions) to dominate and get a monopoly in another market (online payments). Once ebay became a monopoly in online auctions, they had a requirement to offer choices for payment. They have been slowly moving away from that, by banning Bidpay, then Western Union, then anyone except for themselves. This move will probably mean that the governments will finally break up ebay and Paypal, which I originally thought would be the only way they could lose their dominance. Their management is so horrible, that they could lose control on their own, but the gov't should still step in at this point.

I like this point. Ebay doesn't want to catch the scammers because it would look like a negative for them. By not doing anything they can cook the books on fraud rates. You might be onto something there.

Sleepys said:

About the scammers. It is not that ebay does not do anything about them, it is that they are doing exactly what they want to do about them, which is nothing. People think that this is counterintuitive, until you hear ebay bragging about their low fraud rates, I think last I heard it was .5%-1.5%. If they started catching the scammers, the percentage would shoot way up, probably over 5%. Also, scammers seem like they use special features more often to prop up their fake sales, and these fees are non-refundbale to ebay. So ebay wins that way too.

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Err Guys, most of you are forgetting one very important point.
eBAY is a Commercially run Website not a GodGiven Right.
Talking about government intervention is Madness
You don't want another Snowe style Bill controlling internet usage.

I think eBay profits will increase in time because of this policy.
Confidence of the average eBay/Paypal user will increase due to the better control of transactions.eBAY has better chance of tracking and ensuring safe transactions via PayPal than any using alternative methods.

eBAY owns/control PayPal ,it does not have access to all the other methods people use online to track the transactions.
Requiring exclusive use of Paypal for eBay transactions is no different than Australian Government Requiring Exclusive Use of their own issued banknotes and coinage for payment of goods/service. No-one in Australia can print their own banknotes and than expect them to be usable by others.

Any store can issue their own internal coupons/voucher/ StoreCash/ChargeCards / Whatever ,but will not / cannot expect to accept the same things issued by the oppostion store across the road.

If you don't like their policies ,LEAVE.
If that affects eBay profits,then eBay will/may re-consider the policy
My prediction is an initial 10-20% user reduction ,than a general increase to even higher level of usage than at present.

What would you think of a retail outlet that refuses to sell to customers who don't pay with a credit card issued by that same outlet ?
Oh well you can shop elsewhere after all.
But I think that when you run a business consumer convenience should be on top of your list. Problem with the big monopolies, they tend to forget who feeds them

Barefoottech said:

Err Guys, most of you are forgetting one very important point.
eBAY is a Commercially run Website not a GodGiven Right.
Talking about government intervention is Madness
You don't want another Snowe style Bill controlling internet usage.

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This argument is ridiculous. No one has forgotten that ebay is a commercially run business. You seem to be forgetting that they have a monopoly in online auctions. It is illegal for a company to use a monoploy in one market to gain a monopoly in another market. Ask Microsoft how their decision to use their OS monopoly to try and get a monopoly in browsers panned out. What ebay has done is even worse though, because they are purchasing companies and then trying to control the new markets through their monopoly. If you think that companies should be able to build monopolies and then buy more monopolies, then you will be living in a world with very few choices.

Barefoottech said:

eBAY owns/control PayPal ,it does not have access to all the other methods people use online to track the transactions.
Requiring exclusive use of Paypal for eBay transactions is no different than Australian Government Requiring Exclusive Use of their own issued banknotes and coinage for payment of goods/service. No-one in Australia can print their own banknotes and than expect them to be usable by others.

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Now you seem to be forgetting that ebay is a commercial operation, whereas the Australian Government is governmental. That is a huge difference.

Barefoottech said:

If you don't like their policies ,LEAVE.

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That is easy enough to say, if you never want to sell anything of significant value on an online auction ever again (except maybe domains). Ebay has a monoploy on online auctions, and so since there are no other viable alternatives, they have to play by a different set of rules. That is just the way the law is. They will only be able to tip toe around it for so long.

I like to have choices! I have used paypal with all my ebay transactions, but I still liked having the option of using other methods when paypal randomly freezes my PP account.

I am not a fan of the way either one handles their customers, however I continue to use both. I hate it when you have to use something simply because you need it, there aren't any other choices out there.

NPQueen said:

I am not a fan of the way either one handles their customers, however I continue to use both. I hate it when you have to use something simply because you need it, there aren't any other choices out there.

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Funny you said that. Reminds me of how I hate going to WalMart yet I have to because it's the closest store and has everything you need.

Anyway, I doubt this is going to work. Maybe in Australie for a while, but I doubt it will go far.

choice is good ........ choice creates competition .......competition helps to keep prices fair

I used to do a lot of business on ebay and I have to say that only about 70% of the customers paid via paypal, the rest all payed via cheque etc... However for domains and information paypal is the gerneral payment method.

I think ebay likes to make one mistake after the other, the thing is they are not going to make much more money by making people use paypal because most do anyway. However it will lose a lot of business in certain countries if it applies it to all operating countries especially europe.

As for Domainers...well it isnt going to affect the Domain industry...because people generally pay via paypal for domains anyway. I wonder if people will want to go through with big transactions on paypal...NOPE...

Sleepys said:

That is easy enough to say, if you never want to sell anything of significant value on an online auction ever again (except maybe domains). Ebay has a monoploy on online auctions, and so since there are no other viable alternatives, they have to play by a different set of rules. That is just the way the law is. They will only be able to tip toe around it for so long.

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Not in Australia is eBAY a Monopoly
Several Online Auction sites

the forced paypal thing goes ahead on the 21st of may in Australia, everyone is opposing it manly for the fact that ebay/paypal is double dipping in fees and lack of flexibility in payment(eg.bank deposit, money order) . Paypal are favoring towards the buyer greatly buy increasing the buyer protection to AU$20,000.

This might be bad news for a lot of people. Getting refunds from PayPal is like pulling teeth from an alligator...you might get it out but your going to have scars. But since they own PayPal it only makes sense from a business perspective.

Well, I guess i Just won't be able to use ebay anymore. I'm certainly not going to be forced to use Paypal. I DON"T TRUST PAYPAL! I prefer to use merchantinc.com (paypal alternative) like this site that is much safer and more user friendly.

I was doing good pushing ebooks, untill they changed their download policy. The affiliate platform change ruined a site of mine with 500+ afilliate links. Than the final blow with the feedback and 8% final selling fee was it. Paypal and ebay are a joke, what we need is google auctions with google checkout!

I stop using eBay two years back cos they charged me -$24.90 each month off my debit card. Yup, negative twenty-four dollars and ninety cents! Thats the amount that appear in the invoice they sent. :hehe:

Question. Isnt this against some law to do with gouging. Basically if you become banned from paypal your screwed from using ebay. What a waste. I hate ebay.

I think this decision is going to hurt ebays profit in the long run

I think they will end up losing a lot of customers over this action, lets face it, if someone had the brainchild to set up something similar with costs below ebay's and the word got out then surely people have the right to decide whom they give there custom to.

If they want to stay with ebay and be forced to use paypal so be it.

Freedom of choice