eBay To Disallow Checks and Money Orders In US

Sir_Kurt writes "In eBay's latest FAQ, they explain that sellers (for the good of the buyers) will no longer be allowed to accept checks or money orders as payment. They can take electronic payments only. So, will Google Checkout, Checkout by Amazon or Amazon Flexible Payment be allowed? No, says eBay: 'Google's and Amazon's products and services compete with eBay on a number of levels, so we are not going to allow them on eBay.' Options are limited to PayPal, ProPay, direct credit payments to the seller, and 'payment upon pickup.' But remember, this is for our own good!" eBay ran into trouble earlier this year for trying to restrict payment options.

Comments

Actually they are right

[Shivetya]

Too many people fall for the "I will send you X+Y and you send me back Y with the item".

Besides if your dealing on the net the protection of a CC is a must

Re:Actually they are right

[timbck2]

Hear hear! Paypal looks like a bank, acts like a bank, and quacks like a bank...therefore, it should be regulated like a bank, and held up to the same laws and legal scrutiny as any bank.

Re:Actually they are right

[davester666]

Yeah, this is the opposite tactic to what eBay tried to pull in Australia. There is was "you can only use paypal". Now they are trying the opposite, just to exclude everyone else BUT paypal.

And yes, I did read the summary, which does mention they are permitting a couple of other methods right now. But is there any doubt as to which direction they want to go (as in, keep reducing the methods of payment until you can only use paypal)?

Re:Actually they are right

[Bert64]

Yeah, paypal's system sounds all nice if you never have to make use of any of their "protection" programs...

If you know how to play the system you can get away with fraud quite easily with paypal's backing... For instance:

Paypal will not refund people who bought a service as opposed to a physical item, even if that service was never provided and you never had any intention of providing it.

A friend of mine rented a colocated server one friday a few weeks ago, from a business seemingly US based that promised to have your server up and running within 24 hours and claimed to offer 24/7 support.
He heard nothing from them until monday when he got an email from someone in the UK saying they don't work weekends, but that he would get straight on it as a priority...
On the wednesday he contacted again, and they told him it was in progress...
On the following friday they said the server would be ready "very soon"...
On the second following tuesday he discovered that he had already been entered into the billing cycle starting from the date he paid, and that he was effectively paying for the previous week and a half when he had no service.
On the second following friday he tried to call them, they hung up on him and refused to answer subsequent calls. He emailed asking for a refund and was told they "don't issue refunds"
So he filed a paypal dispute, the seller immediately escalated this to a full claim with the comment "transaction was for a monthly server rental, not a physical good" so they clearly know how to game the system...
Luckily my friend paid with a credit card, so he was able to dispute the charge on his card and get his money back.

If you don't like thier policy, go somewhere else

[OrangeTide]

The more restrictions they put on their service, the less interest I have in using it.

I liked the good old days of ebay where you could buy a few sparc stations and then drive over to a guys house and give him cash for them. (craigslist has filled that void)

Improvement at e-bay

[goombah99]

Basically paypal and e-bay are ridicuously bad about protecting people from scams.

However this is a move in the right direction. Recently they put a 30 day escrow on pay pal payments. Which they should have done years ago.

Now it's much safer to shop.

The original idea of eBay is gone

[PCPackrat]

eBay has been going this route for a while. I don't see them backing down. I am in agreement that Craigslist is filling the void that eBay used to fill very well. Now it's just a bunch of 'PowerSellers' reselling product they don't even have. It was a nice flea market while it lasted, but they got big $$$ in their eyes and got greedy.

For example, I sold an item for $150, final value fee was $12.35 and paypal took another $4.82. That's a good chunk of the sale when you are the one designing the auction page and putting the items up for sale. All in hope that the buyer isn't going to rip you off by reversing the charges after pretending they never got the item and you can't leave them negative feedback anymore.

There is a need for a new auction site to open that is like eBay used to be.

uhm yeah. i process checks for a living

[Anonymous Coward]

and every day, companies send million-dollar checks through regular US mail to each other. and the system actually works pretty well. for 47 cents, plus envelope , paper, and special laser cartridges, you can transfer a million dollars. try doing that on paypal, or setting up eletronic systems to do that, and now try to keep those systems secure. now try to do it for 47 cents per transaction.

checks are dying, but they are not a horrible system. they work.

what's really going on is this: meg whitman left ebay, now some 'genius' MBA has come in and said 'omg we are not screwing the customers enough. take away their freedom of choice, and change it into profit for us'.

in other words: capitalists hate us for our freedom.

All about the intention

[jeevesbond]

Well, of course the excuse they are using is factually correct. We have to look deeper, at what they're really intending to achieve by doing this. It doesn't take a tinfoil hat wearing loon to see that eBay are trying to shoe-horn everyone into paying by Paypal. They've already tried it once recently!

There's also one point the summary missed:

eBay ran into trouble earlier this year for trying to restrict payment options.

The thing is, they ran into trouble in Australia. Will the US DOJ take an interest? Am guessing, but I doubt it.

This is a case where the course of action for the DOJ is clear however. eBay and Paypal should be split into two separate companies, that would stop this -- and any future -- nefarious deals between the two. Returning competition to the market.

Corrections

[mpapet]

Paypal acts like a payment processor, not a bank. They don't have a bank charter among other things. Payment processing regulation is very lax.

They are a teeeny-tiny player in the payment processing world dominated by hook-and-crook by the Visa association of banks.

Re:Corrections

[mysidia]

It's more like a sweep account you might have with a brokerage firm. The reason is... the money market account PayPal offers is not an insured account.

Moreover, (accordingly) shares you purchase are entered in your name with you as "Owner of record" for the shares. I.E. The moneymarket investment is your investment, not PayPal's, and you take on the risk of loss of value.

So the fund manager "Barclays Global Investors" is paying out the interest.

It seems to me like PayPal is acting a lot like an introducing broker.

Broker/Dealers are subject to a lot of regulatory scrutiny, much like banks are. I wonder how it is possible that PayPal is in the business of marketing securities to the public in this manner without being a broker...

This will hurt US international sellers and Ebay

[mckinnsb]

I used to work at a high-end guitar store in the Northeast, and my boss put his entire store inventory (that he owned) on Ebay. The reason was simple enough: his inventory was pretty unique, expensive, and collectable, so he felt he needed to reach a global audience to have the best potential to move his gear.

He stopped accepting PayPal for international bidders after an incident in which a international scam artist purchased an item online and reversed the purchase the day it was shipped out the door. Unfortunately, PayPal offers no insurance to the seller in international transactions. So PayPal is a no go for him.

Credit cards are also a problem. He has been burned before. While credit companies and credit card processing companies generally protect you more than PayPal, it can still complicate international small-scale business. In order to verify that the person is not using a stolen credit card, he has to call up the credit agency in its respective country and verify that the shipping address and billing address are the same. Interestingly enough, some banks (particularly in the UK) will flat out refuse to give you this information - even a simple yes or no response when you give them the address you have is against their policy. Also interestingly enough, this service is not automated for international transactions , although it is for US transactions. Now imagine doing this many, many times a day, especially if you sell cheaper items, lets say in the 10-20 dollar range. Also keep in mind that the more times you give a customer an indication of distrust (such as calling them at their residence to confirm other information or ask the bank to release information), the greater your chance to drop the sale becomes.

I'd estimate that roughly 80% of his international transactions over eBay were done via check, money order, or direct money wire, because these methods of payment were convenient while also fairly risk-and-hassle-free. Without this option, I don't see him making as many sales overall, especially in today's market, where the US economy is floundering and the majority of his sales come from overseas. Nearly 3 out of every 5 guitars we shipped last year went overseas, despite high shipping rates, and many of them went to England. Nearly 4 out of 5 of every 1000+ plus item went overseas.

Now, of course, many of you are probably saying "Well now, why didn't he just start a website?". He did. The problem is this: eBay just has too much exposure to let go of. He will probably keep his eBay store, but mostly because advertising through Google or anywhere else is just so damn expensive. He used to pour 500 dollars a month into AdWords. Guess where that got him? Nowhere. Analytics even said so. But when the customers contact him through Ebay, ethically he has to complete the sale through Ebay (or lose his merchant account). If he is restrained to completing the sales through Ebay, he will probably make less sales because for him credit card is now the only option (pay on pickup doesn't really make sense internationally), and his business and Ebay will both suffer. But if he behaves unethically by taking those contacts and processes them through his own website , Ebay still loses and there is the potential of him losing his account and exposure, along with the additional "untrusty" flag that comes along with telling a customer you are going to "bend the rules".

I don't see how this can be a win for Ebay.

Re:They have to do this...

[vistic]

I don't think you pay attention to the overall market. The stock may be half what it was 3 years ago... but it's also half of what it was just in October of 2007 (less than a year ago).

But then again, take a look at Google's stock... Yahoo's stock... Amazon's stock... really ANY tech stock.

Glancing at a stock chart for a minute is meaningless if you don't understand what's been going on with the economy. All things considered, eBay's stock price isn't that bad compared to the rest of the market.

More Corrections

[mpapet]

They allow you to move money from your bank account to your paypal account.
So do any number of gift cards. Sorry. Not a bank.

They allow you to elect to make payments from your paypal "balance"
As do gift cards, a positive balance on any given utility, your cable bill, etc.

They offer a "debit card" that draws from your paypal "balance".
Any company with a few thousand customers could do the same thing. Visa pays a bounty in the $40/per sale range. It's a Visa product originated by a Visa member bank with an Ebay logo on it. Other than the bounty and providing a logo for the card, Ebay knows nothing and has nothing to do with the branded debit card.

If someone sends you funds, it goes towards this balance.
When you pay a bill it does the same thing... Your average utility/store credit card is not a registered bank. They may use something that SOUNDS like a bank, but they do not offer simple interest savings accounts, originate home and business loans, provide business banking services... I could go on and on.

If they put a hold on your account, they deny you access to this "balance" that is your money.
This is not banking. I don't care if you think it is, it simply isn't.

Bottom line: I know Paypal sucks, but they are not a bank. Not even close. You and the informative moderators don't have a clue how it works. Please learn something from this post.