eBay Splits With PayPal
eBay have split with payment provider Paypal, which means the online auction house will now pay sellers directly rather than through PayPal. Sellers will need to sign up to eBay’s own ‘managed payments’ platform and will be paid via that system.
The changes mean that while eBay buyers can still pay with PayPal, sellers will be paid straight into their bank accounts. What is a concern for sellers is that it gives eBay direct debit access to personal bank accounts.
Some sellers have said they will stop using the eBay marketplace.
PayPal was acquired by eBay in its early days in 2002, and the two firms have worked in partnership ever since, until now. eBay says the new system is simpler, convenient, and gives buyers more payment options, following their split from PayPal in 2015.
The new system is 12.8% of the final amount including delivery, plus 30p in the UK. The old system was 10% for eBay, plus PayPal’s fees, plus 30p. The difference favours the new system to the tune of pennies for most transactions. Whe n you do the number of transactions that eBay do, that is a lot of pennies!
So what does it mean for online auctions?
There are many that are trying to grab a slice of eBays market and this is eBay trying to reposition itself back at the top, with full control over everything. Some will like it, some will not.
PayPal used a draconian method of closing accounts at will, even for minor infringements of its Terms, so for some it will be a breath of fresh air to be free. Others do not like change and they will not like having to wait 2 days to access their money, especially when it was available instantly on PayPal.
It makes eBay look even more expensive and controlling, which can only be a good thing for other auction websites. Some are looking to replace eBay, others such as OffTrackBids are happy to have a niche group of users come over and use as an alternative.
With eBay taking a bigger slice of the pie, it can only be a good thing for the ‘small fishes’ to try a new pond out for size!