eBay sued over Paypal

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An eBay seller is suing the company for violating antitrust laws. Texan Michael Malone claims that eBay engages in “illegal tie-in and steering practices” by pushing members to use Paypal payments. Malone sold a pair of speakers in 2005 for US$200, for which he was charged US$5 in Paypal fees. He believes this to be above the market rate.

I have no idea what credit card processing fees are like in the US, but if Mr Malone would care to have a look at the costs of merchant accounts in Europe, I think he’d suddenly find Paypal fees rather reasonable.

Many thanks to Aaryn for the link.

2 Responses

  1. I have to agree that PP fees are very reasonable. I have the original PP credit/debit card that pays me 1.5% back so in net effect we pay under 2% in PP fees.

    Maybe people do not realize that merhant account fees are tied to many things. The better a handle a merchant card provider has about the person/company applying for an account, the better a deal they will offer to the applicant. Or in some cases the worse a deal they will offer.

    I have seen merchant accounts with a discount rate of around 5%…YIKES…and that is in addition to the monthly fees for a statement (yeah they charge for that), the account itself, card-not-present surcharges, software “rental” fees, card reader fees…the list can be long and well, it is easy to get to over $100us in fees before even accepting one card for payment.

    So, nope PP is actually an excellent way to accept credit cards. Now, the vetting of user accounts is another issues completely. 😉


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