Issue #156  2/6/2009
eBay Forces Buyers and Sellers to Use PayPal Virtually Exclusively

In another recent move that has infuriated its dealers and some of its bidders, eBay has instituted new policies for most categories, including photography and art, that appear to be monopolistic in real world practice. Sellers are now forced to offer payment options only from a "choice" of three: the eBay-owned "PayPal", which charges dealers a higher rate than most credit card merchant services; "a credit or debit card processed through an Internet merchant account", which is extremely difficult and expensive to set-up, making it virtually unattainable for most small dealers; or "ProPay". ProPay? Yes, we've never heard of it either. Yet apparently eBay finds this tiny unknown more acceptable and secure than GooglePay, even though it will be virtually impossible to convince buyers to sign up and use such a limited service.

EBay claims, "Safety and convenience are at the core of eBay’s policies toward payments. This policy is designed to promote safe online shopping, and to encourage online payment methods that are safer, easier to use, and offer high levels of protection for users."

Dealers say they are being forced to use eBay's PayPal, which has become the only part of the company to still increase its revenues, as eBay's last quarter net income fell 31% overall. As one eBay dealer told me, "I'll take a check any day over PayPal." Overall costs of PayPal for dealers who use it have grown steadily, and dealers feel that the only reason for this move is eBay's greed to lock in additional profit and more firmly establish PayPal's supremacy over competitor GooglePay.

EBay has threatened dealers with expulsion who try to circumvent the new payment rules, which rule out all checks, money orders, wires and offline merchant services--and, of course, GooglePay.

If you want to see the additional mess of eBay problems as some eBay dealers do, you might click on the following: http://genuineseller.com/ebay-2008-year-in-review-what-a-mess/ .