Implications of eBay’s new Paperless Payments Policy

Posted on September 4, 2008. Filed under: eBay, Paypal | Tags: , , , , , , |

This blog article is not meant to discuss the merits of eBay’s new Paperless Payments Policy but rather to discuss the implications for sellers.  It is obvious that sales will decline, even if only a little, when buyers no longer have the choice of sending a check or money order.  But there are other implications for eBay sellers.
1. Increased Communication Will be Required Between Buyer and Seller
Buyers who want to pay by check or money order will realize that they can still pay via this method if the seller will accept a payment by mail.  So, buyers will email each seller individually to inquire as to whether the seller will accept a check or money order.  eBay sellers will then have to carry on an email dialogue with potential buyers letting buyers know whether they will or will not accept payments by mail and, if so, specifically the terms for submitting payment by mail (ie postal money order only or money order but no check).  The increased communication required of sellers will take away time that sellers could be spending communicating with buyers who have already purchased and need assistance and it will take away time the seller could be listing additional items.  The end result is the already-overworked eBay sellers will be required to do more work for the same amount of sales.

2. Buyers Will Misunderstand Payment Options and/or Feign Ignorance
Buyers who want to pay via credit card but not through Paypal see the PayPal icon in the listing which shows pictures of credit cards and they may be confused.  All buyers, especially new buyers, may think they can pay the seller directly with a Visa card, for example, and then be frustrated after the fact when they realize that they must process their payment through PayPal rather than directly with the seller.  And some experienced buyers who do not want to pay through Paypal will try to force sellers to accept credit cards directly.  Given that most eBay sellers do not have a direct merchant account this will cause more tension in the already strained buyer-seller relationship.  In all cases, the seller will again be the one to have to communicate unnecessarily with the buyer to explain eBay’s new paperless payments policy and to work harder to get buyers to pay.  The end result is the already-overworked eBay sellers will be required to do more work for the same amount of sales and will lose out on some sales where the buyers will end up not paying because they either misunderstood the payment methods offered or because they won’t pay via Paypal.
Here is an example of a buyer who just purchased an item from me and sent me an email last night (his emails are copied exactly as I received them):
I want to pay with my charge card as your ad offers. However, I do not want to send my number electronicly. Can you please send me your phone number so that I can conclude purchase activity, please?
Of course I responded to let the buyer know that my listing states in the description that I offer Paypal only and that I did not put that icon in the listing.   I explained that he could pay through PayPal with any credit card or with his bank account, which I am sure he already knew.   I also informed him that he would need to contact eBay Live Help to discuss the icon since eBay is the one who created the PayPal icon and placed it in my listing.  His response:
I usderstood the icon to mean you take the card, and I can do this with you. If you require it be run via PayPal, then I will need to contact them and set up a payjment method. This method will add a day or two as I need to sit down and comit what ever time necessary to comploeting their process. Are you sure you do not want me to pay you earlier rather than later?
Now, this email correspondence is from a buyer who has been an eBay member since July 2002 and has a feedback score of 323 so my assumption is that the buyer is not ignorant of the system but rather he can’t or won’t pay via PayPal for some reason, a reason he is not sharing with me.
eBay’s decision to implement a Paperless Payments Policy, without allowing the buyer the option of paying by check or money order, will undoubtedly increase all sellers’ workload.  And because eBay is implementing this right at the holiday season, when most sellers will be their busiest, I think sellers will be incredibly more frustrated with the policy than they would have been had this same policy gone into effect in early 2009.  It is painfully obvious that eBay wants to increase PayPal revenue quickly by forcing sellers to accept PayPal during the busy holiday season despite the implications for eBay sellers. 

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12 Responses to “Implications of eBay’s new Paperless Payments Policy”

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The continuing drain of small and micro sellers off the site is not being replaced by sales volume from the mega sellers.

Those sellers who are left will be forced to pick up the slack one way or another.

It is very comparable to spousal abuse, with each new ramping up the previous level becomes ‘normal’. It will not stop until it is no longer possible for eBay management to hide the situation, which given the size and complexity of the corporation may be a long time.

Paypal is down today. Welcome to tomorrow’s paperless payments world of eBay.

Sometimes I wonder if increasing their cut is the only motive behind eBay’s PayPal-only policy. With the new IRS requirement that all electronic payment systems must report income for its customers, maybe the IRS is encouraging eBay/PayPal to do this.

[…] with the last area – the indirect consequences.  As I wrote in my earlier blog topic today – Implications of eBay’s New Paperless Payments Policy – there are consequences to all sellers when eBay makes changes, even when a particular change is […]

Listed in your changes is “Anonymous emails for safer communication’.

Even eBay’s Item Won email omits the seller’s direct email address now. It’s impossible for a buyer to contact a seller directly. Any contact has to go through eBay’s message system. How convenient for eBay that this meshes so well with the New Paperless Payments Policy.


I have about $20,000 dollars of silver and
bronze age comics to sell. I was going
to use ebay, but I can’t use PayPal as they
have rejected me. Without PayPal, I was able
to get 325 positive responses from ebay
sellers. Thus the argument that security
is an issue when one pays with money orders
seems to be misleading. As a seller, 15% fees
to ebay, plus listing fees, plus paypal means
that I’ll get 80 cents per dollar. Not Good,
thus the meaning of the paperless policy to me
means I’ll look for other venues to sell.
The ebay effort isn’t worth it, I think.
Implications for other sellers would be similar.

[…] Implications of eBay’s New Paperless Payments Policy – click HERE […]

The brass at meBay have fallen off their skateboards.

eBay upper management has not only lost their future profits but their minds! I saw the writing on the wall last year and stopped selling on eBay. By their own hand I estimate their future loss @ 35% + …just look at the collectible listings! What they fail to understand is that market makes up a large portion of their sales. Are they power sellers? Maybe 10%, the majority are small sellers looking to make a few extra $. eBay greed will be their undoing.

It appears to me that eBay is headed toward an antitrust suit with the Paperless Payment Policy since eBay owns PayPal and makes a sizable percentage from each transaction routed through PayPal.

The overwhelming majority of eBay sellers cannot qualify for a Propay account or sell enough to make a direct merchant credit card account a realistic option. Local pickup as an option is a joke. How many people will drive several hundred or a thousand miles to avoid paying through PayPal?

This definitely will result in highly increased profits for eBay and will cost sellers more than the recently increased fees that they now pay. This is all about greater profits for eBay made possible by eliminating competition from Check and Money Order purchases, and has nothing to do with improved security.

This appears to be a viable opportunity for Google or Amazon (they both have the financial resources) to launch a strong competitive online auction site that will provide real competition for eBay and provide sellers with a fair opportunity to make a reasonable profit on sales.

I have a PayPal account and their is only one reason and one reason only the I will NEVER use PayPal again: they do not allow me to chose by credit card as my first and primary source of income. If I make even the slightest keystroke mistake, they will automatically dive into my bank account and make a withdrawl, and I may not even be awair of it happening until it’s too late and I am overdrawn.

It is assanine that PayPal lists creadit cards in their ads and then trys to make it impossible for you to actually use your credit card. When PalPal allows me to change the primary and default choice of payment ot my credit card, I’ll come back, but any wise buyer would be a fool to use PayPal the way it is currently set up. They are the only on-line payment company that does that, not google checkout, not Amazon, only the greedy bastards at PayPal.

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