Might eBay payments processing on behalf of sellers be coming next?

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The eBay and PayPal divorce is two and a bit years hence and the deal made with PayPal made stipulations that the marketplace had to use PayPal to a great degree. But with the passage of time it seems possible that eBay payments from buyers to sellers could be processed by the marketplace.

Hints suggest that eBay might again make forays into payments in its own right. Indeed, it could go so far as to the extent of taking payments on behalf of sellers like Amazon does.

A conversation during the Credit Suisse 21st Annual Technology, Media & Telecom Conference Call between analyst Paul Bieber and eBay’s Chief Financial Officer Scott Schenkel suggests that eBay might be considering taking back some of its payment share.

You can read the whole conversation here. It’s a free sign up, and you need to provide an email address.

Schenkel said in the discussion: “The operating agreement provided to capability after three years to start to implement what we call a merchant of record, which is eBay would start to be the seller and in doing so would aggregate that volume and be able to get lower PayPal or other payment operator rates, right. It’s simple as that. So there’s a level of investment that would be required to do that. There is a level of cost — so just the product and technology investment would be not insignificant. Remember, we would also then have to start to do risk. We would have to do trust, we would have to have some degree of additional customer service, all of which PayPal does for us today. Not all of which, but most of it. So there’s the dynamic of changing the ecosystem from a product standpoint, making sure it is a better customer experience and making sure that we are ready to handle the merchant of record responsibilities to then get a lower take rate.”

So, obviously eBay realises that there is an option and a opportunity to start processing payments on the marketplace, should it decide to do so, when the agreement allows. eBay Payments rather than PayPal could be on the way.

Is that a good thing? Perhaps if the fees were cheaper than PayPal. What do you think?

9 Responses

  1. It just a ploy to get lower concessions and rates from PayPal, just by stating we could do this, strengths ebay hand with paypal. The major shareholders in ebay are also in paypal, it’s not in there interested to upset the existing relationship. I doubt it will happen.

  2. Yes. Please. Paypal have far too long held a monopoly in ebay UK in particular. I would love some more choice!!

  3. Yet again another system that will enable eBay to offer discounts if we jump through hoops which are only possible if you have an IT department a packing department and a contract with a shipping company where you tell them what you require.

    Oh and of course the ability not to pay full UK taxes which then enable you to offer free returns regardless of why the customer wants to return and the ability to accept returns for unlimited amounts of time which is where it seems to be heading.

    All things driving the small retailers and businesses onto other platforms.
    Well done eBay keep tinkering.

    You will get stung eventually by the old saying. “If it aint broke dont fix it”

  4. in a galaxy far away a long time ago ebay once had its own payment system competing with paypal ,we seem to remember it not working very well
    it was called billpoint

  5. Just get rid of the shopping carts so buyers can order more than one item without paying postage for two items or having to risk someone else buying it while they request an invoice hoping they get a postage discount.

    What is the point of a shopping cart that makes you wait for an invoice or pay 5X postage for 5 items from the same seller.

    eBay.ie does not have a shopping cart & eBay.de has a multi currency shopping cart.

    Maybe after PayPal ties are cut we’ll see a sensible shopping cart instead of the one with four wonky wheels.

  6. I called paypal the other day about the ability to add an Australian Bank account (with transferwise) to my paypal account as we are looking at going directly onto ebay.com.au and was told this was not possible, so whilst i could accept AUD i have to use paypal to FX them into my UK account with their “excellent” FX Rate.

    I asked if its something they are looking at, however as it would mean them loosing out on revenue, i am not holding my breath.

    If ebay wants to enable us to sell internationally, which is a drive of theirs at the moment, then we need to be able to carry out our business transaction without being monopolised into using unfavourable products.

    If ebay were to go down the route of a payment system, then they need to take these scenarios into consideration.



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