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eBay's Plan to Force PayPal Rejected Down Under

Posted by CmdrTaco on from the monopoly-schmonopoly dept.

Jm_aus writes "eBay's plan to force all users to use PayPal only has been rejected by Australia's competition regulator, the ACCC. This followed 650 submissions from eBay users as well as from Australian banks, other payment services, the Australian Reserve Bank, and (anonymously) Google, which aired a lot of dirty laundry about PayPal's unresponsiveness and failure to sign up to the local banking code of conduct. Apparently the public benefits from eBay's 'Bad Buyer Experience' elimination program are likely to be 'minimal.' There is a period for appeals."

31 of 181 comments (clear)

  1. Right, because PayPal's better... by autocracy · · Score: 5, Interesting

    As a buyer, I really want to use my credit card directly. PayPal, last time I used it, only covered a $200 return or so. I went straight through to my credit card company (which is linked to my PayPal account) and did a chargeback through them. PayPal sent me a nastigram saying if you keep that up, we'll cut you off.

    Yeah, thanks but no thanks EBay.

    --
    SIG: HUP
    1. Re:Right, because PayPal's better... by autocracy · · Score: 4, Interesting

      I did my homework, and that's why they have my credit card on the back end (which, thankfully, can tell them to get stuffed). You're right about linking to any account that keeps cash on hand in it. PayPal also has a long history of locking cash in its customer accounts. Really, they're just terrible to everybody involved. I don't believe I've bought anything with my account since that time.

      From a seller's point of view: The EBay style of charging the seller commission, then charging the seller a percentage of PayPal too kinda gets me. Sure, they're treating them like the separate company they used to be, but come on. I suppose you get what you get for having something less than a true credit card merchant account (which costs).

      As an aside rant, I'm sad that nobody does a cash discount anymore. I'd happily pay you on a 2% reduction to save you the 3% or whatever my CC company charges. Well, really to save myself 2%, but you'd profit as a vendor!

      --
      SIG: HUP
    2. Re:Right, because PayPal's better... by Anonymous Coward · · Score: 5, Informative

      The reason why you don't get cash discounts anymore is that it's against Visa/MC/AmEx merchant terms and conditions.

      It's even disallowed to require the transaction to be over a certain value to accept payment via credit cards.

    3. Re:Right, because PayPal's better... by travdaddy · · Score: 5, Insightful

      Nobody does a cash discount anymore because it's against eBay policy. eBay is all about making the seller unable to get around eBay's exorbitant fees in any way possible. That is their entire basis for forcing PayPal.

      To give an example of their total fee structure: after selling a small item for $30, you're only going to see around $24.50 for it after fees, and then you still have to pay to ship it.

      --
      Adidas To Bring Back Sneakernet
    4. Re:Right, because PayPal's better... by FishWithAHammer · · Score: 3, Informative

      Lots of places still do minimum limits, though. "Your transaction must be at least $3.00 to use a credit card here."

      --
      "You can either have software quality or you can have pointer arithmetic, but you cannot have both at the same time."
    5. Re:Right, because PayPal's better... by tlhIngan · · Score: 4, Interesting

      Lots of places still do minimum limits, though. "Your transaction must be at least $3.00 to use a credit card here."


      That's against the terms of the merchant agreement to require a lower limit.

      What you might be thinking of is the similar "Minimum $3 charge if using credit card". Your quote implies that if you buy a $1 item, you can't pay by credit card. My quote says if you want to buy a $1 item, you will be charged $3 for it instead if you use a credit card.

      It's a very subtle thing - it implies a cash discount (buy item for $1 via cash, or $3 via credit card), but it also isn't (if you buy 3 $1 items, it's $3).

      What I want to know is if merchant accounts don't allow cash discounts, why don't they go after the tons of people who advertise prices, then say "price is after 3% cash discount"?
    6. Re:Right, because PayPal's better... by creepynut · · Score: 3, Interesting

      Merchants are not allowed to set minimum or maximum amounts for transactions on Visa. I'm too lazy to find it, but I know Mastercard has a similar rule.

      In response to the Anonymous Coward, they are allowed to give cash discounts, but it has to be clearly stated to the customer before hand. A couple of the local computer stores here do this, but they have labels all over the store saying "All prices are 2% cash or debit discounted"

      Source:
      For the US (I'm in Canada, but I can't find the doc on visa.ca). See Page 9/10:
      http://usa.visa.com/download/merchants/card_acceptance_guide.pdf

    7. Re:Right, because PayPal's better... by MoonBuggy · · Score: 3, Informative

      PayPal does indeed suck for sellers as well as buyers.

      Really I don't object to them charging a percentage on transactions - it's still cheaper than a full merchant account. What I very much do object to is them charging twice what Google Checkout does for an equivalent transaction. What I object to even more is being forced as a seller to use PayPal - incidentally does anyone know who in the UK I should make a complaint about this to? It reeks of anticompetitive behaviour, as the Australians have realised.

      eBay actually has Google Checkout listed as 'Not permitted' on their Accepted Payments page, and anyone who has ever tried to email eBay's support team to question this will know how hard it is to get an answer (they normally just spout irrelevant canned responses until you give up) but I did finally get an email from eBay explaining that I am allowed to use it but that I must offer it alongside PayPal and outside of the eBay checkout process.

      I won't even go into PayPal's dubious dispute processes and lack of safeguards - they are well documented elsewhere, but again the argument of "don't use them" is rendered moot by eBay's policies.

    8. Re:Right, because PayPal's better... by MoonBuggy · · Score: 3, Interesting

      The post mentioned total fee structure, not just the PayPal fees. On your $38 auction you would be paying at least another $2.74 in eBay fees, and that's just going on the bare minimum amounts.

      There's also the fact that there are services equivalent to PayPal that charge 1.5%+$0.30, so its service simply can't compete on value. That's precisely why eBay are now choosing to force sellers to offer it - in order to prevent them from using more economical options.

    9. Re:Right, because PayPal's better... by AmiMoJo · · Score: 5, Informative

      Unfortunately in the UK banks are no longer required to help you out or issue chargebacks in cases involving PayPal. The reason is that the banking code only requires them to do anything when you have a dispute with the person you had a transaction with, which in this case is PayPal. You send the money to PayPal, and then in a separate transaction they send it to the seller. So, if you problem is with the seller, they don't have to help.

      I started a petition to get the law changed: http://petitions.pm.gov.uk/3partyccs/

      --
      const int one = 65536; (Silvermoon, Texture.cs)
      SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
    10. Re:Right, because PayPal's better... by GeckoAddict · · Score: 3, Informative
      When I worked for a large bank , the rule was that they were not allowed to specify different pricing for CC vs cash. A discount for using a particular method was allowed under the regulations.
      It looks like that's still the rule. Page 10 of the Visa Merchant Card Acceptance Guide

      Always treat Visa transactions like any other transaction; that is, you may not impose any surcharge on a Visa transaction. You may, however, offer a discount for cash transactions, provided that the offer is clearly disclosed to customers and the cash price is presented as a discount from the standard price charged for all other forms of payment. And Page 9:

      Always honor valid Visa cards in your acceptance category, regardless of the dollar amount of the purchase. Imposing minimum or maximum purchase amounts in order to accept a Visa card transaction is a violation of the Visa rules. Mastercard regulations are similar:

      5.9.3 Minimum/Maximum Transaction Amount Prohibited
      A Merchant must not require, or indicate that it requires, a minimum or maximum Transaction amount to accept a valid and properly presented Card.

      5.9.1 Discrimination
      A Merchant must not engage in any acceptance practice that discriminates against or discourages the use of a Card in favor of any other acceptance brand.
  2. Can somebody explain? by muellerr1 · · Score: 4, Interesting

    In most countries, why is PayPal allowed to act like a bank without being regulated like a bank? I've never understood how they get away with that.

    --
    steampunk web design
    1. Re:Can somebody explain? by PoliTech · · Score: 5, Funny

      For the same reason that Ebay acts like a fencing operation for stolen goods, but is never charged as such.

    2. Re:Can somebody explain? by Paranatural · · Score: 3, Insightful

      I think it's because PayPal is fairly undefined. It does seem like it's a bank and so people unthinkingly treat it as if it is one, but of course it has no actual bank foundation. And, of course, they have no imperative to become a bank, because then they'd have to follow the rules.

      I'm just hoping that all countries everywhere enact similar rulings. Paypal gets on my damn nerves.

    3. Re:Can somebody explain? by arivanov · · Score: 4, Informative

      1. It is more counterfeit than stolen.

      2. The french have actually charged eBay with both on a number of occasions.

      --
      Baker's Law: Misery no longer loves company. Nowadays it insists on it
      http://www.sigsegv.cx/
    4. Re:Can somebody explain? by Z34107 · · Score: 4, Informative

      Because PayPal is not a bank. It doesn't offer loans, it doesn't pay interest, it doesn't have a required holdings (no loans = 100% cash on hand), etc, etc.

      PayPal is as much of a bank as Chuck E. Cheese is a bank for handing out those game tokens and tickets. It's just a convenient way for you to give money to eBay before you spend it on an actual good (the appeal of which I have yet to understand.)

      --
      DATABASE WOW WOW
  3. And furthermore... by Barny · · Score: 4, Funny

    ... we would like to add, on behalf of the Australians who you are trying to blatantly extort:

    *ahem*

    "Like fuck you will"

    That was an extract from the actual brief, word for word, honest :P

    --
    ...
    /me sighs
  4. You're in luck mate! by Anonymous Coward · · Score: 5, Funny

    As a buyer, I really want to use my credit card directly.

    Just fill out the form at gday.ebay.mate/safecredit.asp and we'll get you started faster than a kangaroo can steal your vegemite sandwich.

  5. Re:elimination program? by clang_jangle · · Score: 4, Interesting

    What's that ""Bad Buyer Experience" elimination program" ?


    If my personal experience is any indication, it's the process whereby upon reporting being victimised by an eBay "power seller" eBay threatens to find you guilty of being a "bad buyer" and threatens to place sanctions on your eBay and Paypal accounts unless you pay up. The workaround I found was to change all my eBay user info to the crooked seller's email address and a fictitious physical address and I canceled my paypal account. :P

    It probably helped that I did this within an hour of eBay finding in favor of the dishonest seller (item was a Chinese counterfeit and did not function properly, also they attempted to charge for two items when I only bought one item). This was about three months ago, I've not heard anything about the matter since. Obviously, eBay lost me as a customer.
    --
    Caveat Utilitor
  6. Paypal sucks blah blah by Slimee · · Score: 3, Interesting

    I can't stand paypal. I've had an account since the earlier days before there really were options, though I so rarely use it because without PAYING for an account, I can only transfer money through a direct bank transfer. On EVERY ONE of my ebay listings I have to add a footnote alerting people that they can't pay with a credit card through paypal because paypal won't allow me to do that...

    And the only way to be able to do that is to sign up for an account where they take a percentage of all of my transactions.

    How does that commercial go? "It's my money and I want it now!"
    But seriously, I'm tired of paypal, I just wish it would go the way of the dinosaurs because it's such a frustrating site to use to transfer funds.

    1. Re:Paypal sucks blah blah by Slimee · · Score: 3, Interesting

      Yeah, I've been using Craigslist more and more for things I want, and I find everything goes a bit more smoothly when there's no hidden fees and surcharges for every move you make. Ugh don't even get me started on fees....$40 to list a car on ebaymotors? BS

  7. Don't get me wrong, I love PayPal by multi-flavor-geek · · Score: 3, Interesting

    I have had a PayPal account since they had that send money with no fees promotion that my now ex-wife and her friend used to rack up a couple of thousand frequent flyer miles on each others WorldPerks cards. I generally trust PayPal and I like the money market feature on my account, but it is not the only way to pay and it should not be set up that way. The world needs competition and it is going to hurt a lot of people who may just want to buy or sell one thing and don't want to set up an account for that one hassle to go through. For some things PayPal is perfect, but not for everything. On websites where you have an actually established revenue stream and are not just selling one or two things a day I think it looks bad if you are running PayPal only. I recently backed out of a deal to buy a stack of sub woofers from a company because I didn't want to deal with the creation of a PayPal account on the business card for one transaction. They lost out on a big sale, just because they were stuck with PayPal and PayPal only and I know that I am not the only one who responds to things this way.

    --
    Like arts? Like cheesy little Indie mags? Check out www.artwerkmag.com, and don't laugh at the bad coding please.
  8. What about those of us who SUED PAYPAL and WON by RaigetheFury · · Score: 5, Informative

    I was part of the massive lawsuit against Paypal back when there were plenty of scammers. One such tried to screw me and even though I provide more than enough evidence to PROVE without a shadow of a doubt this guy was scamming the system, committing mail fraud, AND on top of that was using stolen credit cards, AND i gave him his confirmed address...

    They still sided with him. However, I knew this was a possibility and I moved the money out of paypal, and blocked them from charging me back through my bank who happily sided with me.

    About 6 months later I joined the lawsuit, and provided all of the evidence to them for exhibits. If you didn't know we won... and won big. Not happy with the default settlement offering I filed for the full settlement and received my check a few months later. I framed it... and I will NEVER do business with Paypal again.

    I don't care if Ebay bought them. They do not follow banking guidelines, they consistently have proven themselves untrustworthy and generally don't abide by the law OR their own policies.

    If Ebay goes to Paypal only, I think they'll soon realize the size of the mistake they will make when other auction sites blow past them at 90mph!

    1. Re:What about those of us who SUED PAYPAL and WON by Anonymous Coward · · Score: 3, Insightful

      they'll soon realize the size of the mistake they will make when other auction sites blow past them What other auction sites are there? I know of a few, but they all suck. They will have a hard time beating eBay who has television adverts. The other problem is most of the other auction sites are as much of a rip-off as eBay, both in the fees they charge and the stuff listed on them. Most of the other auction sites have junk that goes for above retail.... just like eBay.
  9. Ebay is Dead to Me, Paypal is Evil by Colonel+Korn · · Score: 3, Insightful

    I sort of enjoyed bidding for things on eBay back when it was new and there were deals to be had, but now nearly everything is at a fixed price and the only purpose it has for someone like me is to buy/sell used computer parts, which I can do elsewhere without the risk or hassle. I feel like the new eBay is mostly for soccer moms who don't know of alternatives, or for people who have very specialized interests with no other options (usually there are other, cheaper, safer options).

    On the other hand, I never liked Paypal. As far as I could tell its sole purpose was to make it easier for sellers to scam buyers, since the only protection given to buyers is something on the order of $100. I know some people who bought Apple laptops on eBay, never received them, but were unable to get all of their ~$2000 back. If it happened to me, I'd do what another poster said today and stop the payment to Paypal from my credit card, but if it were me I wouldn't have made the purchase in the first place.

    --
    "I zero-index my hamsters" - Willtor (147206)
  10. Verfied Accounts by drxenos · · Score: 4, Interesting

    I found out the hard way that when you "verify" your account, the bank account used to verify your PayPal account becomes the primary account. All payments you make through PayPal come out of it by default. I called them because all my purchases were coming out of my bank account and not my credit card. They said the bank account has to be the primary, and the only way to change it was to revert to "unverified," which I did. I like the protection I get from using a credit card. Payments extracted from a checking account has no where near the same protection.

    --


    Anonymous Cowards suck.
    1. Re:Verfied Accounts by AbRASiON · · Score: 3, Interesting

      Yep, mod this up! It's an absoloute fucking scam (again) on paypals behalf.

      Once you add bank to an existing account, it opts to directly withdraw from the bank rather than credit card, you CAN'T make the credit card default.
      In Australia, this means I get charged bank fees for using my regular bank account, (maximum 5 transactions a month free, than small but annoying fees)

      The credit card obviously has no fees - they are happy with the interest you pay as a dipshit consumer in debt (which I'm not)

      Paypal have done this so that people can't do ccard chargebacks as easily.

  11. Paypal tried to steal $1200 from my wife by shadowofwind · · Score: 5, Informative

    Paypal claimed the seller had the money, and told the seller we (the buyer) had the money, and lied and stonewalled for months. Finally they just gave the money back without explanation after a state Attourney General inquired on our behalf.

    The previous time I posted this on /., I was modded down as a liar. But unbelievable as the stody is, it is the truth.

    In fairness to Paypal, our experience was shortly after it was purchased by EBay, so probably EBay cleaned it up some since then.

  12. Never been burnt, yet *knock on Woody Allen* by macdaddy · · Score: 3, Interesting
    I've been using Paypal since the very beginning. I've been using eBay and Yahoo Auctions since they were first established. I was thinking about how much $$$ I've spent on auction items over the years back when I last did my taxes. My purchases peaked in 2002 with just over $16k in purchase. In total I have bought nearly $100k of crap off of them both over the last decade. Amazingly enough I have never been burnt. All of my eBay purchases used PayPal I'm sorry to say. The only time I ever had a problem I simply did a chargeback with my CC. PP got pissed and threatened me; when I said I was going to do a chargeback they transferred me internally to a guy who did the threatening. He was obviously reading prepared material from a script. They never locked my account though. That was before you had to verify yourself to send $$$.

    I moved back in 2003. That prompted me to move to a new bank as well. I was fortunate enough to have put my old bank account into Paypal when I verified my account. When I moved I sure as hell didn't update the info. It remained that way until this Spring when I accidentally forgot to change the payment method from PayPal's default of a bank account to a CC. They realized that my account was closed at that time and unverified my PP account. I had to give them my new bank account info. I hated to do it but I had to complete the purchase. I'm seriously considering signing up for a new account somewhere, using it for 6 months and then closing it just so I can get back to the way it was.

    It's amazing that I've never actually gotten burnt considering how much I've used PP. The vast majority of the equipment I buy is networking gear. I'm pretty careful who I buy from. If I have any feeling that it's not a good seller I move on. I won't buy from anyone on the West coast (too much counterfeit Cisco hardware comes from China into the West coast). I'll even read all the seller's reviews and go back through their past auctions and the buyers to see if it looks legit. I guess being careful pays off. I'm definitely not a PP or eBay shill. I lost a fair bit of money in eBay stock and I think the wannabe bank PayPal should rot in litigation hell, but I never have been burnt.

  13. Already too late for me by Anonymous Coward · · Score: 3, Interesting

    How this has affected me...

    I used to use eBay and Paypal quite a bit and for the most part I've had good experiences. For quite a while I kept a significant amount of money (nearly $10,000) in my Paypal money market account, earning a fairly decent interest rate (one of the higher rates I could find at the time). I was aware that Paypal was not FDIC insured but I was fairly confident that Paypal wouldn't collapse. I had one eBay purchase where Paypal backed me up and I got a refund (except for shipping). I really didn't have any serious complaints.

    After hearing the news about eBay trying to force the use of Paypal, I had to rethink my position. I was concerned that such a decision would negatively impact their business and made me less secure in keeping my money there. More importantly, I felt I could no longer "invest" in the Paypal business model. Their interest rates had also been dropping so I started looking around at bank accounts. Surprisingly (or maybe not so, in hindsight) I found one that had a better interest rate and transferred my money. Paypal was more convenient and I'm sorry to miss out on that, but Paypal has lost my business (over $10,000 worth) and I'm not going back now.

  14. So, what is the alternative? by AmiMoJo · · Score: 3, Interesting

    Can someone suggest a good alternative to PayPal? eBay seems to have banned everything else that accepts credit cards and many buyers only want to pay by cc, even when you explicitly state that you don't take them. Basically it's impossible to sell anything on fleaBay without a PayPal account I think.

    Maybe an alternative to eBay is needed. Amazon is okay for books and music, but what about other stuff? eBay actually seems like quite a good way to sell some stuff, if it just wasn't for PayPal.

    --
    const int one = 65536; (Silvermoon, Texture.cs)
    SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC