Lawdy! eBay/PayPal’s latest spam e-newsletter just casually asserts that in two stages they’re going to cease supporting any payment method other than PayPal:
From 21 May you must offer PayPal on all your listings as well as currently permitted payment methods.
From 17 June you will only be able to offer PayPal on your listings and pay on pick up (i.e.paid for when picking up the item).
Pay on pick up can only be offered in conjunction with PayPal. No other payment methods will be permitted.
A small number of exclusions will apply to these changes.
… ermmm…
Come again?!
Now, this is a good and bad thing for both buyers and sellers: I’m a great believer in well-implemented e-commerce systems like Google Checkout, Amazon Marketplace, PayPal, MoneyBookers, PayMate, etc. mainly because of the “invoicing” model opposed to the “I’ll open my purse and you just take what you want… repeatedly” model as-used by credit-cads… I mean credit-cards.
Paypal also has a really great insurance/guarantee system for eBay purchasers. Basically you’re covered against fraud of up-to $300-odd if paying through PayPal. More trusted vendors have even higher guarantees.
Infact this mandate will only have positive impact on me as a (very small-time) seller as I’ve always accepted direct deposit and cheque (an ancient promissory-note system of funds transfer that takes about 2 weeks and several dollars to complete), but only because some of the less tech-savvy customers objected to/were afraid of PayPal. I vastly preferred PayPay due to its guarantees, speed and simplicitly.
The problem is that there is now only PayPal. The aforementioned other payment systems are technically just as good (some claim better), but eBay has deliberately refused to allow direct integration into their site. In the meantime, their own PayPal system is heaviliy integrated and hard to get away from. Google has previously griped about not being let into the “eBay trading floor”, but this has always sounded a bit like a half-argument while external payment systems were allowed but not supported. Now that they’re explicitly forbidden, I think Google’s (and the others’) case’s may hold some legal water.
In the long run, I believe this is a foolish move from eBay’s perspective. It’s quite short-sighted in that they seem to be saying “We get good cash from PayPal, so if we ban other methods then we’ll get better cash from PayPal… right?!” More likely is that someone will come-up with a better auction market than eBay and their bubble will burst. This may have already started with the recent hikes in seller comissions turning-off a lot of vendors. Another possible contributory nail in the coffin is that eBay has for a long time had a pretty nasty website layout, which hasn’t improved much over time (It’s also been fairly resistant to 3rd-party web-applications when they start looking like they’ll affect eBay’s business - like auction-sniping tools). “Who could possibly come-up with a viable competitor?”
Well, first cab off the rank is Google, of course. Google has a galaxy of talented web-developers all jostling for slick “web-2.0″ developments. Google’s been spurned before with the Google Checkout system too, so it wouldn’t surprise me if they’ve been developing a secret marketplace system for a while now.
Amazon’s marketplace system is arguably already replacing eBay - many more “serious” vendors are there already hawking their wares successfully and in good volume. However Amazon Marketplace is a much more “heavy weight” offering than eBay (don’t forget: eBay was originally started for bubblegum-card trading and other collectable trinkets).
Craigslist has been running for ages too and does a lot of the “lower-end” stuff you see on eBay already too (Classifieds things like “Used dishwasher for sale - pick-up only”, etc.) . However Craigslist can be a confusing mish-mash of data-dense, information-light pages and often the controversies (”meet market” image or den of paedophiles?) turn people off gettng into it. It also has no support for payment systems, this is up-to the end-users to sort-out between themselves.
There may well be others, maybe Telstra/Sensis will get the online carcass of The Trading Post to fly (I honestly doubt that). There are still a swarm of “Web 2.0″ start-ups swirling-around and one may just hit the sweet-spot in the market, you never know.
Only time will tell, I suppose, but in the meantime, there’s always PayPalSucks to help disgruntled customers rage at them.
Update( 10-May-2008): Seems the Reserve Bank ofAustralia’s getting worried about a retailer appearing to not accept legal tender for transactions: RBA wary of eBay’s PayPal push (ABC).
