Digital Transactions Authoritative, insightful and timely information for payments professionals
Starting Aug. 19, sellers on eBay that accept payment through PayPal Inc.?as virtually all eBay sellers do–will have to accept all forms of funding, including credit card funding, eBay Inc. announced Friday. Currently, eBay sellers have the option of maintaining personal PayPal accounts on eBay, which allow them to refuse credit card transactions through the processor, which is a unit of eBay. In addition to cards, PayPal users can also fund payments with prepaid accounts or with checking account debits through the automated clearing house. Effective 30 days from now, these sellers will be expected to upgrade to a Paypal business or premier account, both of which allow credit card acceptance, if they receive a PayPal transaction based on a credit card account. Sellers will also be banned from stating in a listing that they accept only some forms of payment through PayPal, eBay says, adding that doing so can result in the listing being canceled. Refusing a transaction after an auction will constitute seller non-performance, the San Jose, Calif.-based Internet auction giant says. The new policy, which applies only to PayPal transactions on eBay, stems from complaints eBay and PayPal received from buyers. “We got a lot of feedback from buyers on eBay that [refusal of card payments] caused a lot of confusion and a bad buyer experience,” says a spokeswoman for PayPal. “They'd win an auction only to find out they couldn't pay with a credit card.” Sellers that refuse card payments through PayPal generally do so because of the higher costs of maintaining a business or premier account, the spokeswoman says. While transactions through personal accounts, which allow only ACH and prepaid-account payments, carry no transaction fees, payments on business and premier accounts incur fees ranging from 1.9% plus 30 cents to 2.9% plus 30 cents. Some sellers also fear the hassle of combating credit card chargebacks, the spokeswoman says. PayPal's seller-protection policy automatically covers business and premier accounts when sellers follow certain procedures, such as gathering valid shipping data and confirming addresses. But, says the spokeswoman, PayPal often disputes card chargebacks on behalf of sellers that are not automatically covered, as well. The spokeswoman says that while PayPal is not requiring eBay sellers to upgrade to premier or business accounts in advance of the policy's effective date, it will expect them to upgrade when they receive their first card payment through PayPal after Aug. 19. “We'll count on our sellers to abide by the policy,” she says. PayPal business accounts allow sellers to operate under a business name and give access to multiple users within the business. Premier accounts operate the same way but do not permit access by multiple users.
