Risky sellers must offer PayPal

No primary category set

Largely overlooked amongst last week’s changes on eBay UK was an announcement about PayPal rules on eBay.

All sellers with a feedback score lower than 100 will now have to offer PayPal on their listings. Certain categories designated “high risk” must offer PayPal, and others will be allowed to offer *only* PayPal as a payment method: both these are the same categories as announced last year, but see below for a full list.

Easy to miss is the throwaway line at the end of eBay’s list: “We’ll also send targeted emails to sellers who we will require to offer PayPal because their buyer satisfaction is particularly low.” eBay UK have yet to specify what sellers will have to do to be targetted under this policy.

And there’s more. In certain – again, as yet unspecified – circumstances, PayPal may hold onto the money altogether:

To ensure transactions are completed to the satisfaction of both buyer and seller, PayPal may make the decision to hold payments related to specific transactions on eBay. This will only occur on a very small percentage of transactions, where research predicts a bad experience is more likely to occur. These restrictions will come into force at the end of March, and full details will be made available in good time before this change.

The US have released details of why a payment may be held and when it would be released, which could be earlier than the 21 days maximum. Sellers who have

  • been on the site for six months or more,
  • have a feedback score of more than 100 and
  • a buyer dissatisfaction rate under 5%

will never have their payments held. We don’t yet know if similar criteria will apply to the UK.

This ought to feel reassuring: unreliable sellers must offer a method of payment which protects buyers, and sellers involved in transactions which look like they’ll go bad will not be able to take their money and run (though arguably that latter is more about protecting PayPal than the buyer). Moreover, sellers with an established track record should not – if the UK adopts the US guidelines – fall foul of this policy.

I just hope PayPal’s PR department are ready to deal with the upset from new sellers who don’t understand why their money’s being held for three weeks.

Categories where PayPal must be offered

  • Health & Beauty
  • Video Games
  • Mobile & Home Phones
  • Computers
  • Consumer Electronics
  • Jewellery & Watches

Categories where PayPal must be the only payment method offered

  • One-Day Auctions
  • Video Games > Consoles
  • Consumer Electronics > MP3 Players
  • Computing > Software
  • Wholesale or Job Lots > Mobile & Home Phones
  • Business, Office & Industrial > Industrial Supply

11 Responses

  1. All of ebay and paypal current strategy is tio ignore private sellers and encourage business sellers, while a 21 day hold may sound horrific to paypal customers it only brings paypal in line with real merchant providers like worldpay and UK banks, who often have a 28 day hold on new accounts.

    The difference is obviously, that they offer fraud prevention and seller support that makes paypal look like the ‘joke’ it is.

  2. R: I think there’s a huge difference between PP on the one hand and Worldpay and banks on the other: primarily, that to have a merchant account, you have to jump through hoops and generally prove that you’ve a business and you know what you’re doing. PP position themselves completely differently, as the facilitator of money movement between individuals. Look on eBay message boards at the huge number of people who get a PP chargeback and are shocked to the point that many of them didn’t even know what a chargeback was, let alone that it could be done.

    That’s a massive difference in expectation alone, let alone in actual operation. When I first opened a Worldpay account, they screwed it up and we didn’t actually get any of our cash for six months. Because we were a “proper business” with cash reserves and a nice bank, it wasn’t really an issue: now try telling the average eBayer they wouldn’t see any cash for that long: they’d be ruined.

    It may bring PP in line with real merchant providers, but to dismiss that as *only* doing so ignores the reality of trading for thousands and thousands of sellers.

  3. we once had a merchant account, that as sue says was quite involved to set up and authorise,
    chargebacks were quite frequent via stolen credit cards and scams, regardless of how diligent we were,

    we have now dumped it in favour of paypal, we have used paypal since it was available to us must be 5 years or more now,

    we have had ONE iffy chargeback ,

    if paypals a joke ,we think its a good one ,and cant stop laughing

  4. our merchant account was with Barclays, not some half arsed wibbly wobbly set up,

    our percentage rate was much better than we get from paypal, though the overheads, secure servers, machine rental etc etc made it about the same cost,
    and for a long time we offered both on listings,

    9 out of 10 buyers chose paypal when paying even with a choice

  5. 9 out of 10 buyers chose paypal when paying even with a choice

    If you are in a position to offer google checkout, it is more like 70-30 paypal.

    Has someone been selling ebay branded rose tinted spectacles around here recently?

  6. As per usual – in the eBay Community this little snippet is being interpreted by many as ‘ Paypal will soon hold your money for 21 days!’ and omit to mention the few circumstances where this may happen.

    Unbloodybeleivable – it seems many have a hidden agenda to bring the whole shooting match to its knees !

  7. I dont sell on line anywhere other than ebay, google checkout is not anything thats going to happen to me soon,

    I have a whole chelsea flower show of ebay branded tinted glasses, and intend to order some from wisden too


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