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)?

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.

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.