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eBay Cuts Paper Payments, Leaves PayPal to Rule Roost

Beginning late next month, eBay will no longer accept money orders and checks for online purchases, writes Retailer Daily (via Internet Retailer). 

According to eBay, the change will benefit sellers, making payments faster and more reliable. Justifications follow:

  • Customer complaints are 80 percent more likely to occur when a consumer pays with a check or money order compared with a credit card or PayPal, making the paper format less and less desirable.
  • Online payments are faster: 25 percent of PayPal-processed transactions in the US are paid within five minutes and 73 percent within 24 hours.

Shoppers can still use credit and debit cards, but only with vendors with a merchant account. Some items, like cars, real estate, industrial equipment, and "mature audience" goods are exempt from the new rule, and bidders can always use the (albeit rare) "payment upon pickup" option.

eBay said it would offer "several other electronic payment options in addition to PayPal," but will not accept payments processed through services offered by competitors Google or Amazon.

Google Checkout, which debuted in June '06, has gained traction as a legitimate online payment service. A year after its launch, former eBay CEO Meg Whitman referred to Checkout as an unproven product, but said they would consider using it if user satisfaction increased.

Unfortunately, availing eBay's payment market to outside rivals proved too risky for the struggling online auction site, and that sentiment left out with Whitman. This leaves credit card processing service ProPay — designed for small merchants — and, of course, eBay's own PayPal.

In Australia earlier this year, eBay was shot down in its attempt to pull a similar PayPal-only stunt. The Australian Competition and Consumer Commission called the move unfair, writes Ars Technica.

The 38-page complaint filed with the Australian government gave voice to the injustice and was later found to be authored by Google.


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