eBay Adopts Electronic-Only Checkout

Checks and money orders will no longer be accepted on eBay.

by Auctiva.com staff writer
- Aug 20, 2008

After having its PayPal-only experiment in Australia shot down by regulators, eBay has come back with a plan in the U.S. to restrict checkout on its e-commerce sites to three electronic forms of payment.

Starting in late October, payment methods on eBay will be limited to PayPal, ProPay and direct credit or debit card payments via a merchant account, the company announced. Checks and money orders will no longer be allowed, unless the buyer is picking up merchandise in person.

eBay currently requires that sellers offer PayPal as one of their accepted payment methods.

The change will also eliminate third-party checkout systems. By January 2009, eBay says, the approved payment methods will be integrated into eBay checkout so that buyers never have to leave the site to complete a transaction.

Although somewhat more inclusive than the Australian plan—which was ultimately ruled to be anticompetitive, because eBay owns PayPal—the all-electronic payments policy is nevertheless bound to incite further protests from sellers who are already fed up with the raft of changes at eBay that have impacted the way buyers and sellers interact.

eBay is attempting to smooth over some of the bumps by reducing fees for certain categories (see related story).

Explaining the payment policy change, Lorrie Norrington, president of eBay's Marketplaces division, says electronic checkout is faster and more reliable, and usually results in a more positive transaction.

"Today, items paid with check or money order are 80 percent more likely to result in an item not received [claim] than those paid with credit card or PayPal," Norrington reports. "Also, buyers who pay with check or money order are 50 percent more likely to leave negative feedback than those who pay with electronic methods."

The new policy means that nine electronic payment services previously allowed on eBay will no longer be acceptable, including Allpay.net, cash2india, CertaPay, Checkfree.com, hyperwallet.com, Moneybookers.com, Nochex.com, Ozpay.biz, Paymate.com.au and XOOM.

ProPay, one of the accepted payment methods under the new plan, is a privately-held company headquartered near PayPal in Orem, Utah.

The electronic payments policy will not apply to purchases of vehicles, capital equipment, items in the Mature Audiences category or real estate.

About the Author

Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.

Other Entries by this Author

Follow Us