UK announcement - could this be eBay's plan for driving Paypal coverage on eBay?

In their recent investment banker conference stops, both John Donahoe and Rajiv Dutta talked about the desire to increase the Paypal coverage on eBay up from the current (Q307) 61% (slide 30).

Today in the UK, eBay threw out this little announcement that for "buyer satisfaction", 1-day listings, Software, MP3 Players, Mobile Phones and some B+I items now require PayPal as the only payment mechanism.  With some of our large sellers we've found up to 50% of buyers pay with credit card (via the seller's merchant account), so it will be interesting to see how much of an uproar this has in the UK and if eBay brings it to the US.

Feedback 2.0 and several other major initiatives started with UK tests, spread to other countries and then crossed the pond to the US after a couple of months of tweaking.

Seller readers of eBay Strategies, how do you feel about the potential for PayPal being the exclusive payment options on 1-day auctions and several categories?  Sound out on comments.

Comments

[Alexander]

This is yet more proof of a complete lack of vision, strategy and innovation at both ebay and paypal.

Increased adoption of paypal as a payment method needs to be driven by providing real value to both buyers and sellers. This needs to be done, among other things, by offering transaction security, real buyer and seller protection, user transparency, performance reliability, customer service, integration with ebay and other marketplaces, availability of meaningful information pertaining to transaction partners, and more.

At UNISEEK.COM we would like to see paypal offering the innovation, among many other necessary innovations, to automatically reject payments of buyers that fail to meet certain payment performance criteria. For example, paypal should allow seller accounts to automatically reject payments from buyers that previously filed one or more "item not received disputes". This would be especially meaningful, if paypal really integrated with ebay in a way that ebay did not allow the buyer to leave negative feedback if the seller rejects his payment based on the buyer's past transaction history. Of course this would require to completely revamp the outdated ebay feedback system and actually make it meaningful to both buyers and sellers.

Other criteria for rejecting payments from buyers should be buyer location, number of previous paypal payments, number of buyer-canceled payments, chargebacks, etc.

[CHRIS]

I think this would be a major antitrust issue.... I have no idea what the laws may be in the UK but I am pretty sure this wont happen here.

[sd]

This may be obvious but just in case: the PayPal requirement is obviously to reduce fraud. Requiring PayPal makes it much harder for fraudulent sellers to scam buyers (hence the "buyer satisfaction").

[Designerathletic]

Scot, this will be a good thing for Christmas next year, to bad they missed the timing on it. Currently in CSA category we are unable to list select items as 1 Day listings due to a high level of fraud. 1 day listings for us were only important the week before Christmas but with the addition of extended BIN we really did not see a need for 1 day auctions this year.

[Steve Wyman]

I have very mixed feeling about these kind of initiatives.

On the one hand I'm against being negative and I love Paypal, I personally have no charger backs in the last year and no problem with paypal or payers in that respect. Of course paypal and ebay integration on the software side is at best described as rubbish. they simply don't fix bugs.... I only use paypal as I love the instant payment etc so this is not a negative to me.

On the other hand I do think ebay is trying to hard to tweak their profit model by this kind of action and hiding behind a smoke screen to simply improve profit margins at paypal/ebay. I cant see any real justification for paypal only strategies other than margin.

They should focus there energies on the core user experience as they claim to be doing. Get P&P fixed not just talk about it. Reduce insertion fees dramatically or and allow power sellers to pay a monthly upfront fee with a tier so it reduces per item them more you list i.e. 1000, 2000, 500, 10000 items per month (whilst ENFORCING the max 15 listing of one item at any time rule to keep things under control). Whilst tweaking FVF to maintain their overall profit.

So in summary this is just smoke and mirrors to cause distraction from their failure to use better tools and tools they already have.

regards

[tj]

PayPal has so many serious issues to resolve; first off it’s too expensive, then there is the MASSIVE chargeback scams, then the astronomical currency conversion charges (approx 10%) ..it’s way too expensive…but I have noticed over the past year Paypal customer support has softened it’s attitude to sellers slightly.

But the chargeback issue is ridicules; especially when you fax all the registered mail info etc to Paypal and the scammers still get refunded

I believe if you have a reputable payment service/merchant account then they should be allowed on ebay without question

[John]

I don't care what ePay management does, as long as they don't blatantly lie to me and tell me the real reason is "buyer satisfaction." Doing so would be insulting to anyone who has sold on ePay for more than a month and/or has an IQ above room temperature.