Contact Us          Submit a News Story          News Archives          Home

E-Commerce News

More on the PayPal-Google controversy

July 17, 2006

eBay's decision to ban Google Checkout as a viable payment solution raised the eyebrows of many observers in the eCommerce community who complained that the restriction is totally unfair to Internet consumers.

However, eBay's decision opens up a debate as to how eCommerce merchants should balance the risks and rewards of accepting different payment systems.

Robert Chesnut, senior V.P. of eBay's Global Trust and Safety Organization (GTSO), placed a message on the eBay's website on July 6, informing users that eBay had changed its global payments policy, which it had first introduced in October last year.

Montreal Web Design will build a great-looking website for your business.
Montreal Web Design will build a professionally-looking website for your company, and do it at a really competitive price. Learn more by clicking here.

The only current accepted payment options include credit cards, debit cards, bank-to-bank transfers, PayPal and cash on delivery as well as about a dozen nontraditional methods such as cash2india, and

In fact, Google Checkout and about three dozen other alternative methods such as GearPay,,, Stormpay and -- have been designated as unacceptable.

Violations of eBay's policy could result in a range of actions including cancellation of your listings, forfeit of eBay fees on canceled listings, limits on account privileges, loss of PowerSeller status and outright account suspension.

"We have the policy in place to make sure our marketplace offers a variety of choices, but those choices are safe," Catherine England, an eBay spokesperson said.

"We spell out several factors we take into consideration, including making certain the different providers have a substantial historical track record of having safe methods of transaction services. We don't have a lot of insight into if, and how, the market will use Google Checkout."

Google assures shoppers that they can enhance their security when making purchases through Google Checkout simply because the service conceals the buyer's credit card number and provides reimbursement for unauthorized purchases.

But, the service was only announced at the beginning of the month.

If Google Checkout proves to be a good and viable alternative, eBay eventually might consider it as an option, according to England. "In general, we're constantly trying to communicate with buyers and sellers to see what their real needs are," she said. "Decisions are based on demands from our customers and looking to protect our community from a fraud perspective."

Get the best Linux or Windows Web hosting plan for your website.
Get the lowest rate and the best tech support on any Linux or Windows hosting plan. Learn more by clicking here.

In addition to all these criteria, eBay also will consider the following factors, among others, in making its determination, according to the company's policy:

1) Whether the payment model offers substantial financial, privacy and anti-fraud protection for buyers and sellers.

2) Whether the payment model raises the potential for confusion among eBay users or involves incentives that may present fraud concerns.

3) The identity, background and other business interests of the payment service sponsor.

4) The license/regulatory status of the payment provider in the countries where it provides payment services.

When it comes to payment options, eCommerce merchants should err on the side of caution, said Nick Selby, a senior analyst with The 451 Group.

"Online retailers are trying to conduct business in a medium that is known to be fraught with security risks," he notes, "and through bitter experience and trial and error, they've come up with a balance of payment methods that allow them to conduct business to as wide an audience as possible without exposing them to unnecessary risks.

"They've struck a balance that's comfortable -- that's letting them grow online sales -- and nobody's eager to throw that out of balance," he said.

England cited Western Union as an example of a risky option, noting that eBay changed the name of its policy from "Safe Payments" to "Accepted Payments," recognizing that many options it doesn't recognize as safe within its own community are appropriate in other situations.

The company has seen a correlation between attempted fraud and sellers who will only accept Western Union as a method of payment, she said. "It's great when you know who you're sending money to, but not when you're sending money to a stranger. Once you send it that way, the money is pretty much gone."

On the other hand, restricting options for consumers may also be reducing wallet share for companies like eBay, suggested Ed Kountz, a JupiterResearch senior analyst focusing on payments.

"The advantage of accepting money orders or transfers is you may be able to tap into customers who are not comfortable using traditional online payment criteria, even if that that market isn't very big," Kountz said.

However, he did acknowledged that most of these methods take some time to clear and that it can be rather difficult to ensure the payments are valid and more difficult to trace if something does go wrong.

"It's understandable that eTailers will be skeptical of any kind of new method that doesn't provide the same level of reliability and security as the payment methods they have currently," Selby said.

Source: eCommerce Times

Advertise on E-Commerce News

Advertise on E-Commerce News and increase your site's visibility while boosting your sales.

If you have a product or service that deals with the ecommerce or ebusiness field, advertising on E-Commerce News can bring you new sales leads and close new marketing channels. This news portal is read by over 25,000 people a week.

Businessmen and woman that either own an ecommerce website, an ebusiness franchise, a B2B commercial exchange or by people in all walks of life that need to keep abreast of this fast-changing field. For more information on the many advantages of advertising on our news portal or to request pricing information, please send us an email and a marketing representative will be glad to answer you promptly.

Contact | Submit News | News Archives | Home

Copyright E-Commerce News. All rights reserved.

Avantex offers professional Web hosting services at wholesale-only prices. Get the best Linux or Windows hosting package for your eCommerce website. Learn more by clicking here.