eBay Exec Explains How Not Using PayPal Is Like Dealing Heroin…

from the work-on-those-analogies-a-bit dept

Down in Australia, eBay has apparently decided to require sellers to use eBay-owned PayPal for electronic transactions, blocking out a number of other solution providers in the space. Understandably, this has upset a bunch of eBay customers who, for whatever reason, prefer other payment solutions (often because they’ve had bad experiences with PayPal). eBay’s Australian execs, to their credit, decided to hold a “town hall” meeting to discuss the changed proposal — and it didn’t go particularly well, from the sound of it (thanks to an anonymous reader for sending that in). Apparently, the booing and hissing started early (well, late, because the eBay team opened the doors quite late) and things just spiraled downhill from there. But the key point of ridiculousness was when regional VP Simon Smith explained the reasoning as follows: “We’re not allowing people to offer unsafe choices, just like in this democracy you can’t go out and buy heroin on the streets.” Now, you can understand what he was saying… but, clearly, there’s a bit of a difference between using a non-PayPal electronic payments solution and dealing heroin. And, of course, if this were really about “protecting” buyers and sellers, then shouldn’t eBay at least offer a path for third party providers to become “certified” as being safe?

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Companies: ebay, paypal

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Comments on “eBay Exec Explains How Not Using PayPal Is Like Dealing Heroin…”

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Wolferz (profile) says:

Re: Re:

So what you’re saying is that if you pay for a car wash it would some how wrong for me to charge you for detailing and vacuuming the inside. Charging for both of those services is some how unfair just because its the same company providing both services?

Ebay offers listing auctions. PayPal offers to payment handling. It’s not unreasonable to pay for both services even though both are provided by the same company.

Anonymous Coward says:

Re: Re: Re:

So what you’re saying is that if you pay for a car wash it would some how wrong for me to charge you for detailing and vacuuming the inside. Charging for both of those services is some how unfair just because its the same company providing both services?

If it wasn’t optional, I would say so. That reminds me of those auto dealers that offer a low price, but when it comes time to close the deal they add on a bunch of non-optional dealer “extras” to jack the price back up. Maybe you see nothing wrong with that, but some of us do.

dorpass says:

Re: Re: Re:

Wolferz, your example is of two different services that are unrelated to each other and you can easily do away with one without hindering the other.
A better example would be for you to come to a car dealer to buy a car and after paying to own the car, you’ll also have to pay to drive it off the lot. To the same dealer, of course. And even though banks are able to provide financial services for both of those steps, the dealer won’t allow it. And since you have no backbone to say otherwise, you will pay the extra, say “Thank you” and “Can you charge me some more?” Way to go.

SM413 (profile) says:

Re: lol

UMMM… you do pay for it. that the Ebay fee… but then, and this is where they get you, to actually get the Money you then have to pay for that as WELL as the listing on email. Oh then if your bank wants to they can charge for the transfer to you account so that you can actually USE the money which will take 3-5 days to get AFTER the buyer has paid.

Look it up. Its FAR from free.

Anonymous Coward says:

Re: Re: Re: lol

ebay has changed, now the business monkeys are shooting themselves in the foot by making it an unpleasant place to do business. Companies that think only of their balance sheets, and not of their customers go out of business as well.

There used to be a buzz around ebay, it was the place to find anything. Now the only buzz surrounding ebay is grumbling about how much it sucks. I think ebay is done, now we’re just waiting for another company to rise up and undercut them with better user experience…come on already google, I know they probably paid you off not to compete. How about some good old-fashioned free market competition.

Nate says:

Another misleading techdirt headline

It’s a small distinction, but the VP wasn’t comparing “not using PayPal” to “dealing” heroin. He was comparing using other forms of payment to “buying” heroin.

it may seem like a minor distinction, but comparing someone to a drug dealer is much more inflamatory and outrageous than comparing him or her to someone who buys heroin on the streets.

But TechDirt always goes for the more inflamatory headline, even if it’s misleading.

Hulser says:

Re: Another misleading techdirt headline

It’s a small distinction, but the VP wasn’t comparing “not using PayPal” to “dealing” heroin. He was comparing using other forms of payment to “buying” heroin.

Well…I took the headline to mean that eBay (not the customers) not using PayPal was like dealing heroin. It’s true that Smith mentioned buying heroin, not dealing it, but what I think he was saying is that if eBay allowed people to use forms of payment other than PayPal, then they’d be failing in their duty to provide a safe product to their customer, like a heroin dealer selling their product on the streets.

It’s a rather stupid comparison, but I don’t agree that the TD headline i misleading.

Yeorwned (user link) says:

eBay is going, going, gone! anyway...

The majority of users that used eBay when it first started many moons ago (it was completely free initially) arn’t using it anymore…why? Fees have skyrocketed and the majority of good items/deals for both parties are gone.

Now, all you have left is a small quantity of consumers against massive wholesaler/reseller/drop shippers. Let them price themselves out and be done with it.

Craigslist is surprisingly successful with paired with it’s limitations. I wonder what would happen if they ever decided to try an extra intercity feature…….

Duncan says:

Nate said:

“It’s a small distinction, but the VP wasn’t comparing “not using PayPal” to “dealing” heroin. He was comparing using other forms of payment to “buying” heroin. “

Umm… That’s the same exact thing. What other choices do you have then to either A.) Use paypal and get double charged or B.) Meet the seller in person?

We purchase online so we can get the things sent to our doorsteps. Not so we can have a meet and greet.

If I want to purchase something using either my personal checks or through *gasp* a money order, I should be free to do so.

eBay should still charge you for hosting your auction… But when they start charging you to use paypal… Well, it’s redundant.

Shoot, I wouldn’t hate eBay for dropping the paypal charges, but hiking the auction listings a few cents.

Trerro says:

I avoid PayPal like the plague

A friend got an insufficient funds message when he tried to use an ATM and found out PayPal had sucked 1k out of his account for no reason. He thankfully caught it in time to cancel it. A lot of people haven’t been so lucky:
http://paypaywarning.com is filled with horror stories.

PayPal isn’t a bank, isn’t subject to any of the protections that banks have to provide you with, and can basically screw whoever they want, and other than blocking them from dealing further damage to your account, there’s nothing you can do about it.

A site that can’t bother to get a real credit card merchant account, e-check service, or some other form of payment system that I can actually trust has to follow banking laws is a website I don’t do business with. I don’t care how big said site is.

James says:

It Is Like Heroin

Think about it for a second, it should not take longer than that. The actions of a credit card company are no different than that of a heroin dealer. They offer you a product, in the credit card companies case it’s money, get you addicted and then starts the slow downward spiral into debt and destruction until you hit rock bottom and are required to go crawling to the man in the form of “friendly” courts to help rehabilitate you back into society.
Now I may be stepping out on a limb to say that this is what Simon Smith was referring to but it works and quite well I feel.

ebay/paypaluser says:

Re: Mature Audiences section

I realize this is a very old topic, but a couple of points I thought were worth mentioning…even with the dated material (2Year).

PayPal works just fine for purchasing items that are listed in the “Mature Audiences” section. My spouse and I do so frequently.

As a Credit Card processing service, PayPal is doing nothing different in charging a fee. If you own a business of any kind (provided it’s not a huge business capable of negotiating the removal of say DISCOVER, like Wal-Mart) you are also charged a “processing” fee per transaction. My spouse and I run a Technical Consulting and Automation business, and we process credit card transactions. We pay a fee to do so, happily I might add. Our customers requested our change in payment acceptance, and we find that they seem less reluctant to call on our services knowing they don’t need to have cash or check. I don’t honestly know where my check book is.

Anonymous Coward says:

Re: Get over it

yeah, right… Like Sprint?

People are leaving Sprint like there is no tomorrow. Funny part is Sprint waited until they lost millions before getting upset and trying to do anything about it. Even then, their reaction to it is to fire the Unfortunately for them, you cannot patch a hole in a swimming pool without draining it first.

John Doe says:

i understand ebay needs a cut from what you sell, i even understand you should take the hit for when a buyer uses his/her CC to pay for something. what i don’t understand is wtf, paypal charges you a 35cent fee for EVERY transaction you receive and why you get his with the paypal 2% of what ever the hell it is if you’re receiving paypal funds or funds from a bank acct. it doesn’t cost paypal to supposedly “wire” money from one acct to another.

Lucretious (profile) says:

Ebay offers listing auctions. PayPal offers to payment handling. It’s not unreasonable to pay for both services even though both are provided by the same company.

Ah, yes, it IS unreasonable when it costs vendors who are already being charged to the point of having to give up their business to lose potential sales due to eBay’s insistence on using their payment system.

It reminds me of the 1800’s when immigrants were working for the railroad and then billed at the end of the week for various things like Picks, shovels, water, food and not allowed to buy elsewhere. The type of behavior that eBay engages in is exactly why the economy is going tits up. They’re becoming so tight fisted (tools like yourself would call it “lean and mean”) that the “trickle down” theory no longer woks. It then becomes squeezing people for all they have. While upper management pats each other on the back for once again eeking out a bit more revenue.

Wolferz (profile) says:

Selling vs buying vs using

I’m pretty sure the comparison that was being made was between USING unsafe payment handling methods and USING possibly harmful drugs.

Though selling was mentioned the point there was that it would be irresponsible to allow the sale of something that when USED would be harmful.

Thus, for once Mike, I have to disagree with your assessment of the issue. “but, clearly, there’s a bit of a difference between using a non-PayPal electronic payments solution and dealing heroin” While technically true this is irrelevant. “How much of a difference is there between using an unsafe payment system and using heroin” and “Is it really irresponsible to allow others to choose a potentially unsafe course of action” would be more reasonable lines of questioning.

The real questions to me, however, are “Is PayPal really safer than other options (what with their alleged propensity for seizing the money of honest sellers over unfounded claims)” and “Is it really a good move for a company such as ebay to restrict the options of their clients in a way many of them will find very troubling.”


sonofdot says:

It's about choice

This isn’t about paying twice, it’s about choice, or rather, limiting choice. Ebay is saying that Paypal is required to accept electronic payments, even though there are plenty of others that provide the same service. Take away people’s choices, they get justifiably angry.

The spin that eBay is somehow saving the world from unscrupulous electronic payment services is pure bunk, used only to put some positive spin on an announcement that even a moron in a hurry could figure out would not be well received. Unfortunately, the people who now run eBay aren’t as smart as that moron in a hurry.

Shane (user link) says:

eBay may not get a choice

The Australian Competition and Consumer Commission is looking at this as a competition issue following complaints from other online payment services (Paymate has been going strong for years, for example). I’m fairly sure it’s illegal to restrict consumer choice here like this, but it wouldn’t be the first time that the ACCC has missed the point.

It’s more than PayPal double dipping. As mentioned by others, if I want to use a different service with the associated risks, let me. If you don’t want the support costs, don’t provide consumer support.

There is a lack of awareness of other online auction sites in Australia (I certainly don’t know of any) but hopefully they will see their chance to promote themselves as more consumer friendly than eBay is.

Oliver Wendell Jones (profile) says:

It's to protect ebay reputation...

When someone buys something on ebay and pays for it via Crazy Eddies Discount House Of Payment Handling and for whatever reason the deal goes sour, people complain “I got ripped off on ebay!” rather than correctly claiming “I got ripped off because I used an untrustworthy 3rd party payment handling system!”.

A huge percentage of online fraud is a result of “auction related fraud” which at one time didn’t necessarily mean ebay, what with Yahoo! Auctions and numerous other online auction and dutch-auction websites that were around – most of which have dried up and gone away and now when you see “online auction” it’s almost equivalent to “ebay”. That means that when the annual reports come out showing breakdowns of online crime, there is a section that says “auction related fraud” and by association people think “ebay”. Who can blame them for wanting to get people to think something else?

Mike is right in that ebay needs to make it some how possible for 3rd party processors to get approved/certified and if ebay refuses to do so, then it will be obvious to everyone that this isn’t about protection, it’s about keeping every possible cent of profit to themselves.

And for those of you badmouthing ebay, there are alternatives like Craig’s List that are only effective if you live in a major city – those of us who live out in the boonies 2 hours away from a major city, those aren’t an option for us – shopping on ebay is the alternative to driving 2 hours to visit a Best Buy, or other big store to shop and it’s still just as important and useful to me as it was years ago when it first started – higher rates and all.

sonofdot says:

Re: It's to protect ebay reputation...

No, it’s to make more money. The additional fees, based on eBay’s revenue of $44B, can easily amount to an additional billion. This is about making things safer for eBay, not for buyers or sellers. This “experiment,” if successful, will lead to Paypal being the ONLY way to pay for eBay purchases. No checks, no money orders, no cash, no BidPay, no competition. So the plan is to restrict choices for both sellers and buyers, which will result in eBay going into the toilet faster than ever.

Dawn says:

This just strengthens my resolve never to have anything to do with Ebay again. Anyone who would compare other forms of payment, such as money orders, to buying heroin, needs to pull their head out of their ass and come up for air. It’s frightening that people of such low intellect are in charge of a huge corporation like Ebay. It almost seems like having below-average intelligence is a requirement for working there.

Rekrul says:

I have only ever paid for items on eBay with money orders. I’ve also never sold anything on eBay and even I don’t think it was a smart idea to disallow negative feedback from being given to buyers.

I recently sent eBay an email stating that I was disgusted with their attempts to force Australian users to use PayPal. I also stated that if they started requiring US users to use PayPal, I would close my account. I finished by saying that I would never use PayPal for anything.

They replied with a form letter listing the possible causes of problems with PayPal. Then I got an email from PayPal listing the possible causes of problems with my account.

I can’t decide if someone there thought it would be funny to send me the form letters, or if they just didn’t bother to read the email I sent.

They asked me to take a survey about how my support issue was handled. I told them that they failed miserably.

David says:


We’ve got this rubbish in the UK. I’m not selling anything much on ebay anymore and I’m not paying with paypal unless the seller prefers it.

It’s just a rip-off, talking about protection is just a load of politics (please use similar sounding word, begins with B in the UK)

Anyone know of another online auction site – maybe ask Google to do one!!!

New World Order Slave # 6 001294309693 6 458 6 says:

Only doing Ebay and Amazon to make enough

I am only doing Ebay and Amazon long enough to get funds to buy land and get off the grid.
Don’t think that Amazon is any better than Ebay and Paypal ect… As if google,jewtube,myspace(my profile is any different. It was fun while it lasted but soon the fun will end. IP address,SS number,routing number,DL number,CC numbers ect… You are no longer a free person but a number of the BEAST.
They are all fake jews controlling us through usery just as they always have.
This has been the plan since day one.
The same BEAST you use on a daily basis is the same Beast that will keep track of everyone.
The time is now short and the Beast has been released.
666 is it’s number and you all wear it.
Fuck your evil system of control

Just Me says:

PayPal Dirty Tricks Holding Money

Well i only have one thing to say. I started to use PAYPAL about 4 years ago and back then it was OK. sure they take there chunk off the top but what i liked was the fact that once you sold something your money was there IMMEDIATELY sorta like a cash transaction. BUT lately paypal has been HOLDING funds for ‘up to 21 days’ simply becuse they think it might be a ‘high risk item’ such as CELL Phones, Computers ect.. They hold your money up to 21 days and there is nothing you can do about it. This sucks! I suggest that people stop using PAYPAL all togother. BOYCOTT it. Its just another service offered by EBAY to make EBAY more money.. I mean its bad enough you have to pay to LIST something, then you have to pay a PERCENTAGE of the sale to ebay when it sells. Then ANOTHER percentage when you get paid thru PAYPAL.. There are other auction sites out there. I dont know why they are not as popular as EBAY.. Years ago there was a guy that made a site called EBAYTOO.com it was a GREAT site but the ebay monster shut him down with law suits ect.. I mean this site was the best! I am looking for another auction site like that one.. But no one has the BALLS to take on ebay..




Tech_Guru says:

Last Straw . . .

Well, this article is old, but PayPal just seems to never end with what can only be summed up in two words; CONTROL FREAKS. Now that they’ve started “holding funds” from buyers to sellers I no longer accept PayPal on my eBay auctions. I’m back to Postal Money Orders like the olden’ days. And as soon as eBay tries to make it impossible or decides to bad mouth sellers who don’t accept PayPal (already happened in other countries) I will no longer sell anything on eBay. Who am I? I’m the real eBay community. I’m someone who has been selling on eBay since they first started. I’m a one man show. I sell hard to find REAL antiques, vintage electronics . . . things you’ll never find in mainstream nickel and dime stores. I’m NOT a large corporation selling cheap china “plastic fantastic” crap in mass quantities. eBay and PayPal are driving people like me away and the future is going to turn eBay into nothing but a glorified BestBuy and Walmart. Do they care? NOPE. Stupid greedy motherf@#$%!!

michael (profile) says:

paypal suckc but i may have a batter way

my name is michael mattingy
Tired of ebay? Can not dropeship aneymore becouse of paypal? EVEN PAIED $150 FOR A SOCALLED GOST ACCOUNT? I could make gost acounts all day and sell them. Thay will never last. Becouse people won,t to pay with paypal. All the other payment options hold your money to. Very few will trust a derict credit card payment. Not even with authorize.net. I use them to process my credit card payments. I done tried it.
Ever here of webid? Its a auction website you buld your self. Some of you may have even tried it. But this takes time and money To get it going. I found a good host site to get it started. But its still going to take a good bit of money to get it off the ground. I got to adverise it. Work all the bugs out. And much more.
It is time some one gave ebay a run for there money. I most likely will NEVER beat ebay. Ebay hes been here to long. And has tons of traders. But its like as soon as one starts to make some good money on ebay and amazon thay finds a way to stop you! There is a lot of auction sites out there. But you never get any sales from there. None are as popular as ebay and amazon!! So now what??
What i am working on is to build popler auction site thet every one can sell and buy things on with no one holding your money. Like (paypa)l! This means dropshipers are welcom. And we all can make some good money. But i got to make buyers feel safe buying from this website. Or it will never work. I will have to have a feedback system in place. And some kind of buyer protection plan. One that protects both the buyer and the seller from lies. The buyer is not allways right! Ebay has it setup where buyers can just steal your items. And paypal will just give them there money back. You are stuck with the selling fees. And out your product!

But i can not fund all this all by my self! I,m tring to make money just like every one else here.
I am just asking for a doller or two donetion. If you can. If you cant still send me any ideas you have. Or just pass this post on. Times are hard. Most can,t rely on a good job nowdays. We need to build a way to make some money. We have seen all the make money at home bull adds. All you are doing is reseling the same fales hope to some one else. Thats the whole business.
I tried the paid servays. And spend a lot of hours to just make penneys. There has got to be a better way? THERE IS. I did it a few years ago on ebay and amazon. Made over $10,000.00 in a littel over a month. And could have made a lot more. Thats when ebay shut me down. I was making to much money. Gueses thay just can,t let the average guy make thet kind of money. I did it dropeshipping. That was back when paypal did not hold your funds. You turn around and find the same product you advertized. And shop it right away. The buyer is happy and you made some money. Just like trading stock. Buy low—— Sell high.
Now ebay amd amazon has it set up where you can;t do droppshiping no more. Thay hold you funds for 21 days or till the product is deleverd.
I wont to build a trading place where we can do this again. And have plenty of buyers. Where thay fell safe buying your product. And you have your funds to buy and ship there product right away. What good is a store if you have no custmers? And a place where we can sell aney thing you like. LONG AS IT,S LEGEL. But i bet half the items on ebay are stolen. Come one how can you sell a $400 laptop for $200 and make money??
This auction site will not cost you money till you make money. Then all you will pay is 1% you can pay it every time you make a sale. Or you can let it build up for a month. I like to pay mine right away. So i don,t have a huge bill every month. Anyone who donates here first will sell for free. For 2 years. No fees. So if you do donate here make sure i have your name. Thare is no guerantee i will ever get this going. I,m sure you have tried the other auction sites. You get very few sales if any. This is what i got to overcome. But i do think there is enough poeple looking for somthing new. And to get away from ebay. This can work. So if you can. Please donete to help me get this going.

thank you email rastamike227@yahoo.com

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