In a big move today, eBay Australia announced that shortly only Paypal will be a viable payment option for sellers on the site, along with cash on pickup of items, and credit card payments (via Paypal).
According to the release :
These changes are part of our ongoing commitment to protect our members. We believe buyers will be more confident shopping on eBay if only the safest payment methods are permitted.
In 2007 on eBay.com.au those who paid with PayPal were much less likely to enter a dispute. In fact those using PayPal were almost four times less likely to have a dispute over their purchase than people who paid with bank deposit. Plus, PayPal sellers were almost half as likely to experience an unpaid item as sellers who did not accept PayPal.
The information embargo was broken by local press, resulting in the news reaching buyers and sellers before eBay officially told them. This of course has resulted in a torrent of angry posts in the eBay forums.
The Powerseller forum in particular was active, with 230 replies to one post about the news by mid afternoon today.
And I have to say the overall feelings were very negative. To summarise the local eBay Powersellers:
- Some sellers believe their main demographic may not buy from them any more (older audience) and only younger buyers will be confident to remain on eBay
- Sellers don’t want to feel like they will be paying higher fees as a result of being forced to use Paypal
- Annoyance that eBay stands to possibly boost their ‘take’ per transaction by disallowing payment methods like bank transfer, BPay etc
- Sellers won’t be able to offer buyers a good choice of payment options.
All in all, a bold move, and for my money a potentially dangerous one.
Maybe eBay Australia is being used as a testbed for the other eBay markets, we know this may happen. But is this a step too far? Trust and Safety is an issue yes, and some bold changes need to take place to improve the marketplace so a step back to take 2 steps forward should be the theme for eBay at the moment.
But is this 2 steps back, rather than 1?
I hope eBay Australia haven’t underestimated the impact this change could have in site GMV.
I could just imagine the staff at Oztion running around their office clapping their hands in the air with joy today!
Personally, 50% of our transactions are made with Paypal, the other 50% choose one of 6 other methods we offer. Most of these buyers :
- Don’t know how to use Paypal or what is it (they dot trust it!) or
- They don’t want to have to set up another account/login on the internet, just to make a payment.
I am going to be frustrated that direct bank transfer won’t be allowed, nor BPay.
Will sellers lose buyers on the site? Will sales drop?
The gamble is that business conditions will improve in the short to medium term as a result of these changes but I can see a lot of sellers now moving faster than ever to set up their own stores and find alternative channels to sell their products on.
Of course, most sellers will remain selling, and most buyers will remain on the site buying, but the next 2-3 months will be interesting. I will be watching our sales and keeping a finger on the pulse to see…
Since I am predominantly a buyer on ebay, and I do use Paypal, it does not have a huge impact on me.
That said, I definitely do not like the move.
Firstly, I do not trust Paypal. It likes to pretend it’s a respectable financial institution, and if everything goes well, then it can be really convenient. But if something goes pear-shaped, you more than likely find yourself on the insidious side of the fine-print.
Secondly, I agree with the general opinion that eBay is trying to up their profit margins. They own Paypal anyway, so not only do they get the listing fees from sellers, but also that fund-receiving fee from Paypal. A possible solution is to waive either of the fees, but we all know that’s not gonna happen.
eBay needs to get over their power trip. Even though I am a buyer, I can’t understand why they keep trying to screw over the sellers (ref: negative feedback ban debacle).
Thanks for your feedack icie.
One of my concerns, and obviously that of other sellers too, is that many buyers won’t want to create Paypal accounts and may elect to shop somewhere else.
At the moment in Australia, there aren’t too many other places to shop! We don’t have Amazon, overstock, and the number of Comparison Shopping Engines that other more mature ecommerce markets have.
I like Paypal, it is a fast and convenient payment service for myself as a buyer, and as a seller it saves time (for a fee). But removing too much choice from the marketplace is a big move and I worry about the effect it will have.
Maybe in the long term yes, it will be a good move. But many other initiatives need to be put in place to ensure the eBay marketplace grows and improves the way eBay hopes it will.
Oztion membership went from ~227000 members to 248233 members over the period of this announcement :)
Wai Hong,
I wonder how many user registrations were sellers vs buyers?
Already 60% of our customers are using PayPal, but it is the regular eBay direct deposit customers that have kept coming back to us for the last 4 years that we are worried about losing.
We have started adding information into our sales emails to let our customers know ahead of time what eBay is proposing. We haven’t received any feedback from customers as yet but we hope they all hear about it before it happens. We really don’t want to loose any of our loyal eBay customers.
We hope that if they do not feel like using Paypal then they will come directly to our website to purchase from us rather than losing them entirely.
Emma
Emma,
It is a worry. An Australian ‘current affairs’ program (thats what they call themselves) had a feature on the issue last night. Not a lot of voice was given to Alistair MacGibbon.
Oztion.com.au sent out their latest newsletter stating seller registrations had grown 300% week on week and site listings had grown 30%.
I use bank deposit all the time and have no trouble at all with any of the ebay sellers i deal with. i also have a pay pal acc which i never use as i don’t know how.Pay pal was on today tonight this week 1/8/08 as they would not refund a ladys money on a deal that fell down. i believed that is what pay pal covered you for i must be wrong or is that false advertiseing and i thought that was illegal and you can be charged for that regards Suzzy