eBay finishes PayPal Acquisition

Aidenn writes "As some may remember, eBay was in the process of merging with PayPal. It is finally finished. eBay has information here. news.com has a more complete story."

Comments

Will they revamp paypal?

[captainstupid]

I got the email from EBay yesterday, but they failed to address all of the issues with PayPal. They do mention that they'll phase out their BillPoint service, though.

One would hope that they'd completey revamp PayPal's customer service. EBay is a highly visible company. Hopefully this will encourage them to start treating PayPal customers better.

Re:Will they revamp paypal?

[turnstyle]

Personally, my experience with PayPal has always been very good. I use it to sell my software. Whenever I've called their free support number, I get a human within a few minutes -- and a human that can answer my questions.

Ebay owns them, lets hope service improves

[neoform]

Heres to hoping EBay will finally fix PayPal's terrbile policies when it comes to fraud detection.

Less Competition

[pgrote]

As the dotcom boom hits bottom you look around and notice that fewer and fewer services have competitors anymore. That's the way it has become in on-line payments. There are a couple of alternatives that may still unseat PayPal as the major player in the space, but now that eBay has them I doubt it.

Low barrier of entry means this and the auction space are ripe, but getting traction in it is hard.

What concerns me the most is the service aspect of the deal. PayPal has a bad reputation, but there is hope it will it will improve.

---
Go Daddy President Interview

Re:Less Competition

[King_TJ]

Another alternative I don't see used much, but which I've been relatively happy with myself, is c2it. (www.c2it.com)

They charge absolutely no transaction fees (well, at least so far -- but I'm sure that'd change if they got popular enough).

Honestly, I think much of PayPal's bad reputation would have been mirrored by any of these alternative online payment services, had they grown as large and as quickly as PayPal did.

It's easy to claim your cust. service is "much more responsive" when you only have 1/20th. the number of users.

Re:Less Competition

[dmoynihan]

As a guy whose website derives 80% of its revenues between Paypal and eBay I'm a little concerned about this merger. One great thing about the soon-to-be-defunct Billpoint service was that you could send an invoice for a "non-auction" item (overseas customers who didn't want to sign up for paypal but still hoped to pay by credit card), a feature I use a couple times a week.

The merchant account thing is getting a little better, though it's still a PITB to set up ("picture of my inventory? I sell digital goods..."), probably bank of america has the best deal currently.

I guess there can only be one Internet money though.

finally...

[MarvinMouse]

Now that there is a reasonably reliable company running PayPal. I am just going to wait for a few more to jump on the bandwagon.

Maybe now, electronic cash will become far more acceptable, and smaller vendors will be able to open shop online without having to bow down to Visa and Mastercard's absurd policies. (or having to demand cash payment, which makes online business meaningless really.)

EBay has shown auctions can be done effectively online, now maybe they'll show that E-Cash can be done as well.

The need for a better cash

[argoff]

IMHO the problems I've heard of for both ebay and paypal only highlight the need for a better digital cash system.

What we need is something that is trustworthy, anonymous (private from the prying eyes of 3rd parties), indenpendent of a government monetary authority or any centralized authority, easy to send and transfer electronicly, and with general predictability and liquidity in value.

for anonymity I was thinking there might be some kind of a scheme where you could reveal the identity of the selling party if you were willing to sacrifice the value of the digital cash they gave you.

Also, perhaps there's some type of a need, like computing cycles, storage, or some type of computing service that would have market value that could be actuated by this form of digital cash.

any thoughts?

Re:The need for a better cash

[delphi125]

for anonymity I was thinking there might be some kind of a scheme where you could reveal the identity...

I don't think you think "Anonymity" means what I think it means!

Re:The need for a better cash

[Peyna]

If it were truly anonymous, then revealing the identity would be impossible.

Re:The need for a better cash

[argoff]

I don't think it can be totally anonymous, at least for transactions that involve a physical exchange of goods. For those transactions, all you would want is anonimity from 3rd parties like the government.

For other transactions, you would probably want just enough of a leash to prevent fraud.

But

[Anonymous Coward]

Did they buy it using paypal?

Re:But

[Nighttime]

... and was there a last minute bidding frenzy?

E-Bay - Grey Commerce Beast

[szyzyg]

Speaking of which - I wonder if e-Bay will ever become big enough to start standing up to those Microsoft complaints? My Old Windows Licenses aren't doing me any good....
. And of course fix those neutral ratings against Microsoft's e-bay account

I Almost accepted a job with paypal last weel - Nice people, nice offices, lousy commute, but I really declined because it would have made me a small part of an already large venture, now that this is through I'd be an even smaller part of this grey commerce beast. (It was one of 4 offers)

In a related story...

[dubiousmike]

Ebay tried to pay Paypal using Paypal. Becuase Paypal flagged the transaction as "suspect", Ebay's checking account with a balance of $1.2 mil has been frozen. Multiple calls to Paypal's customer service have gone unanswered and industry experts believe it may take up to 3 months before the situation can be rectified.

Better call the FBI

[Anonymous Coward]

Asked about the deal, an Ebay spokesperson described PayPal's management as "A++++++++++", calling them "VERY RESPONSIVE" and noting that they "WOULD DEFINITLY BUY FROM AGAIN." PayPal's feedback rating is 1283.

It turns out they just fell for some Finnish guy's scam (never send $1.5B of stock to a P.O. box!). He claimed he was selling PayPal "for a friend", but oddly became angry upon suggestion of sending it C.O.D. Unfortunately, due to their toothless fraud protection policies, it looks like they're just gonna have to suck it up and take the loss.

Better luck next time, eBay! They probably should have bought PayPal through an escrow service...

E-cash cannot be independent of some authority.

[Christopher Thomas]

What we need is something that is trustworthy, anonymous (private from the prying eyes of 3rd parties), indenpendent of a government monetary authority or any centralized authority, easy to send and transfer electronicly, and with general predictability and liquidity in value.

The only thing that gives any form of money value is endorsement by some large entity. The pieces of paper in your wallet are called "notes" for a reason - they're statements by the government to the effect that the bearer of the note has control of a certain amount of capital. Once upon a time this actually correlated with a certain amount of gold (e.g. for the US) or silver (e.g. for England), but even without the correlation, the principle remains. The reason paper money has value is that the government says it has value.

Similarly, the reason a cheque or money order has value is that your bank says it has value.

Take away the backing authority, and you lose the value of any e-cash you'd implement. Whether it's the government or a bank or a company like PayPal or Ebay, you need _someone_.

I'd personally prefer it be the government, but I'm one of those communist Canadians ;).

Re:E-cash cannot be independent of some authority.

[argoff]

...The reason paper money has value is that the government says it has value.


That is wrong, it is not about endorcement - but coercion. The reason why gold has value is because it was a limited resource, and the reason money has value is because it is backed up by the coercive force of government - eg if got a mansion via barter and trade of goods and services, the government would require me to convert it to a cash value and pay a large amount of taxes, which it will not accept in any other currency. That creates an artificial demand for dollars, which give it a market value.

Value happens inspite of central authority, not because of it. You don't need a central authority to have value - if I gave you a 4000$ equiv block of palladium, would you turn it away because no central authority would accept it as tender?

I don't see any reason to assume we couldn't have a digital equivalent.

Re:E-cash cannot be independent of some authority.

[samael]

Things have value because enough people want them.

Gold only has value because it historically has had value. What actual use is it, after all?

Similarly, MS stock is technically worthless - there's never been a dividend, probably never will be. The shares are worth money only because enough people think they should be.

Re:E-cash cannot be independent of some authority.

[dvdeug]

if I gave you a 4000$ equiv block of palladium, would you turn it away because no central authority would accept it as tender?

If you were giving it away, probably not. If you were trying to trade me something for it, probably, unless you were losing very badly on the deal. After shipping and finding a buyer and getting screwed by that buyer, I could maybe get a couple hundred bucks for that block of palladium, and that's after spending several days trying to hunt down a buyer and making the exchange.

Money has value not only because it's wanted by the US government; the fact is, it would be infeasible for every Wal-Mart cashier to make barter for anything the customer came up with. If the government stopped making or supporting any type of money, then Wal-Mart would have to find some way to take your barter at a standardized rate, and then would then give you Wal-Mart bucks to give to the cashier. Many companies would probably pay you in Wal-Mart bucks - you can have 30 thousand dollars worth of computers, which will depreciate quickly and you'll have to lug around in your car to trade and make sure they don't get broken, or you can have 20 thousand Wal-Mart bucks, which you can hand into the cashier for food without question.

I don't see any reason to assume we couldn't have a digital equivalent.

You said it yourself: why gold has value is because it was a limited resource, and the reason money has value is because it is backed up by the coercive force of government

There's no such thing as a digital limited resource; with complex enough cryptographical tricks, you can get unique digitial strings, but they aren't a limited resource - the only way to make them valuable is the backing of a central authority.

Re:E-cash cannot be independent of some authority.

[ncc74656]

Gold only has value because it historically has had value. What actual use is it, after all?

Look inside your computer...you'll find lots of gold-plated connectors. Some people (women, gangsta rappers, etc.) also seem to like wearing large amounts of it, though I'll concede that this isn't particularly "useful."

eBay

[rice_burners_suck]

This looks like good news for eBay, which has become quite an online marketplace, but a few small things bother me.

• PayPal is a very convenient system for moving money around. It's easy to pay from your checking account or credit card, and as such, it gives normal people the ability to "accept" credit cards as a form of payment. But, will PayPal slowly evolve into something that's only used on eBay, or will it continue to be operated as a standalone system for doing just what it does right now?
• What is very convenient about eBay is that you put a minimal amount of information into it to start an auction, and you can host a rather large amount of information on your own servers if you want. This gives you the ability to work with your buyers however you want, to simplify your logistics and make things efficient. Remember--there are some people who sell a LOT on eBay, and there are even companies whose sole purpose in life is to sell things that way. However, eBay has been implementing and increasing number of features in the past couple of years. Now, suddenly, they offer image hosting, with each image after the first costing some fee. And more recently, they have acquired PayPal, to support folks' payment requirements. My question is, will eBay remain the "open" system that it is today, giving you the choice of using whatever systems you want to get the job done, or will eBay become a closed system where auctions cost a lot more to place because you have to pay for every feature?

All in all, I think eBay is a really good system. I hope it stays that way, and doesn't turn to poop because some corporate jerk wants to be greedy.

Russian hackers / PayPal scam

[StuffYourReligion]

Yesterday, I received this scam e-mail from "service@paypal.com"
The sending IP was an AOL address: ACC1D4A2.ipt.aol.com [172.193.212.162]

The "click here" links, which I've broken for obvious reasons in the email below, led to this URL:
http://www.paypal.com@%77%77%77.%61%7A.%72%7 5/%70% 70%64

Which, unencoded, is:
http://www.paypal.com@http://www.az.ru/ppd/

And sure enough, it is an (insecure) page on www.az.ru asking you to enter your PayPal email address and password to "confirm" your account. If this is an old scam (this particular one; I was spoofing login screens on my college network in the 80s!), I haven't heard about it.

Here's the e-mail:
----------------------

Dear PayPal Customer,

This e-mail is to inform you of a recent update we have made to our systems. To avoid service interruption we require that you confirm your account as soon as possible. Please click here and take a moment to confirm your account.

Please follow the following steps:

1.) Click here to confirm your account.
2.) Your account will be updated in our system and you may continue using PayPal services without any interruptions.

Please note: If you fail to update your account, it will be 'flagged' with restricted status.

Thank you,
The Paypal Staff

***
Do not reply to this e-mail. For assistance, contact the customer service team.
***

mandatory link

[URoRRuRRR]

paypalsucks.com

Here come the lawsuits.

[mindstrm]

One thing that I always thought was smart was how Ebay stayed out of the financial end of things. They were providing a listing service; actual payment and whatnot, unlike with a real life auction house, were up to the buyer and seller.

now ebay is involving themselves in the financial end as well... this will make things more complicated.

Only for new features (Re:eBay)

[phorm]

think that if they add new features at a cost, it's not going to affect anybody who doesn't decide to use those features. Remember, it takes them time and money to implement these features, so making people pay for them makes sense as long as the fee isn't huge.

Most companies charge for new features, though many implement them as free in the beginning to get clients hooked. Look at all the new stuff that's become more readily available on cellphones in the past few years. A lot of people doesn't bother subscribing to extra feautures, but I'm sure somebody pays it or they wouldn't be offered

Sorry, anypay, so long e-gold

[fm6]

There are a couple [anypay.com] of alternatives [e-gold.com] that may still unseat PayPal as the major player in the space, but now that eBay has them I doubt it.

No, these competitors were out of luck even before eBay bought PayPal. Remember, eBay decided to buy PayPal only after spending millions on their own unsuccessful payment service, Billpoint. Which failed to displace PayPal even on eBay itself, where the deck was solidly stacked in Billpoint's favor.

The name of the game for online transactions is building a critical mass of transactors. That's why eBay has no real competition in the online auction game, despite well engineered attempts by players with deep pockets, like Yahoo and Microsoft.

The same goes for PayPal. They realized they had to build a critical mass of customers quickly, so they made it easy to sign up and offerred cash incentives. By the time anybody else discovered this market, it was just too late.

I agree the absence of competition is a Bad Thing. But side-by-side transaction systems isn't going to create competition -- nobody has any incentive to sign up with the minor players. If you want a transaction monopoly to give up being a monopoly, you have to force it to open up its system.

PayPal rules - hope it doesn't change

[MarkWatson]

I know that some people have reasonable complaints against PayPal, but for me, their service rocks.

It took only a few minutes to sign up and add their canned HTML forms to my web site.

I write free web books, and I use PayPal to accept donations and it is also useful for accepting payment for consulting services and the few commercial products that I sell.

I did a fair amount of research re: getting a merchant account, etc., but I think that PayPal works out a little cheaper for me; it is also zero hassle.

One possible thing to worry about: they do have the right to freeze your bank account if a customer ever wants a refund and you don't have funds to cover the refund in your PayPal account. I have never been asked for a refund (after many, many transactions) but for safety I always just leave some money in my PayPal account - the interest that I loose in a year doing this is negligible compared to the costs of a merchant account, etc.

-Mark

Re:PayPal rules - hope it doesn't change

[squiggleslash]

I've had problems with PayPal where their "fraud" detection systems effectively made every transaction a potential nightmare. When I tried to talk to them about it, they sent me a canned response which answered a question I hadn't asked. When I replied, they sent the same canned response tacked, in classic MS email style, onto the front of the email chain. When I replied and asked them what was up, I received the same canned response. ad-nauseum. When I threatened to close the account, I received a canned "Please don't" response, which again failed to deal with any of the issues I raised.

I'm hoping that eBay taking over will deal with the problems I had. A minor issue - to do with delivery addresses and incorrect instructions on outgoing emails - made every PayPal transaction a gamble which would typically take a week to sort out if I "lost". I pretty much gave up on eBay for the most part thanks to that bunch of clowns, except for the occasional transaction I could do with Billpoint.

eBay needs to address PayPal's deficiencies. Billpoint was quicker, easier, and less moronic, when it came to auction transactions, and I hope desperately that Billpoint's advantages will migrate over to PayPal, not that PayPal's psychotic paranoid tendancies and cretinous customer "service" will become the only choice.

If you can't beat 'em...

[joebagodonuts]

"eBay's acquisition of PayPal follows its failed effort to establish Billpoint as a serious competitor to PayPal." An accepted business practice, but I can't help thinking of the Dilbert cartoon where the PHB says: "we take 2 good companies and ruin them by a process we call merging"