DailyTech - PayPal Rival Looks Worse on Paper than PayPal

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Internet PayPal Rival Looks Worse on Paper than PayPal
Shane McGlaun (Blog) - October 7, 2008 12:51 PM

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15 comment(s) - last by guy007.. on Oct 8 at 1:52 PM

eBay's PayPal alternative charges monthly fees in addition to transaction fees

PayPal and eBay are two peas in a pod. PayPal was the dominant payment method on eBay long before eBay purchased the company. In the time since eBay has been working towards PayPal as the only real payment option for the much-maligned online auction service.

When eBay announced that it was eliminating all types of payment services other than PayPal in August, eBay also said it would be bringing in an alternate payment provider to PayPal. This was a symbolic gesture to appease buyers and sellers as much as possible and prevent the ever-growing hoards of eBay dissidents from crying foul.

The alternate payment processor is called ProPay, and at least on paper the alternate sounds even worse that PayPal. CNET News reports that ProPay has outlined a portion of its prices for eBay users. By its own admission, ProPay is no fully-fledged competitor to PayPal. Naturally, few really expected eBay to offer a truly viable alternate payment system.

ProPay will aim its services at eBay power sellers. For Silver power sellers and higher the ProPay eAuction account will carry an annual fee of $24 or $2 per month. The $24 fee will be refunded for sellers processing more than $3000 via ProPay in six months. Fees per transaction will also be assessed, but ProPay didn't release those fees.

A Pro account will allow eBay sellers to add an online virtual terminal, touch-tone phone processing, email invoicing, and a secure credit card reader. The yearly fee for the Pro account will be $240 and transaction fees will apply as well. With ProPay aiming its services at power seller, that will leave one payment option for the majority of eBay sellers -- PayPal.

EBay announced this week that it wold be reducing its workforce by 1000 employees at the same time it dropped over $1 billion to buy new properties.

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The PR game

By dflynchimp on 10/7/2008 1:59:42 PM , Rating: 2

Nicely summed up. Basically to take some attention away from paypal ebay is creating this new service that doesn't really amount to any significant impact in the real world, other than to make paypal look like the lesser of two evils.

On the other hand, I really don't see why people are complaining about it. This is a free market. Ebay is free to do what they think will cut costs and bring in new revenue, and the public (us) is free to take its business elsewhere if it doesn't like it. I've never used Ebay before, and don't feel like starting anytime soon unless the old garage sale fail me XD. If not there's always Amazon and tons of other options.

RE: The PR game

By Jedi2155 on 10/7/2008 4:01:09 PM , Rating: 5

quote:
On the other hand, I really don't see why people are complaining about it. This is a free market.

We have every right to complain about it just as Ebay has every right to charge what they want in a free market. Our complaints express our desires as consumers for a better alternative thus providing incentive for someone who might be able to cater to the new market of dissatisfied users.

If no one complained, then everyone would just assume eBay was the only way to go....or something like that.

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RE: The PR game

By BSMonitor on 10/7/2008 4:56:05 PM , Rating: 2

He did not say you do not have a right to complain. He is saying why the hell would one waste time complaining. If you don't like it, don't use it. No one gives a flying f### why you don't use it.

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RE: The PR game

By mindless1 on 10/7/2008 6:36:34 PM , Rating: 3

Actually, what the primary motivators are for customers to use ebay or make them move on to another site are the most crucial factors to both ebay and it's future competitors.

Unless these businesses have ESP, it's going to depend on what people say, as-in good or bad (complaint).

Perhaps citing reasons here is less effective than telling ebay and it's competitors directly. Do you have a link to the right person at ebay to effect change based on consumer feedback, instead of a generic email that goes to the vast black hole of cyberspace? Otherwise, did you think ebay didn't monitor what major sites on the web were saying about them?

He complained, then you, then I. Does the last one win a prize?

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RE: The PR game

By sprockkets on 10/7/2008 10:37:51 PM , Rating: 2

Well, the company can either listen, if they were smart, or the free market would see them die if those valid complaints were ignored.

Problem is, no one seems to complain enough to make a dent in ebay's sales, so they win. Personally I went to Amazon. They may cost the same or more, but, the listings I believe last until the item sells. Another reason I use them now because they are not ebay, and directly process payments for you.

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RE: The PR game

By mindless1 on 10/7/2008 6:28:56 PM , Rating: 2

Agreed, even sheep make noise.

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RE: The PR game

By Ordr on 10/7/2008 4:01:15 PM , Rating: 2

Well put.

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RE: The PR game

By brandoncrotts on 10/8/2008 12:36:22 PM , Rating: 2

quote:
On the other hand, I really don't see why people are complaining about it. This is a free market.

I totally agree. I think people are ignoring the fact that by having competition, PayPal will be forced to improve. PayPal has been the only player for long that both PayPal and ProPay will have to work harder to keep their customers, therefore everyone will be getting better service.

quote:
eBay's PayPal alternative charges mothly fees in addition to transaction fees

I just want to clarify that we don't charge monthly fees. There is an annual fee at signup, which the article refers to. You can check out more about <a href="http://www.propay.com/company/eBayAnnouncement.asp...">features of ProPay's eBay payment option</a>.

Brandon Crotts
Product Manager
ProPay

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Why bother with eBay?

By Beenthere on 10/7/2008 4:29:02 PM , Rating: 1

If the Paypal and other system offered are such a big PITA for people, why not just skip ebay?

RE: Why bother with eBay?

By AnnihilatorX on 10/7/2008 6:27:56 PM , Rating: 3

I have yet to see an alternative site that has the amount of traffic rivalling ebay

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RE: Why bother with eBay?

By Denithor on 10/8/2008 8:53:14 AM , Rating: 2

And therein lies the biggest problem. They have what we want and they dictate the terms of service, which many people don't like.

Why don't they accept Google payments? Because it would cut too deeply into revenues & they would lose some control over their extremely lucrative system.

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RME

By Screwballl on 10/7/2008 4:19:41 PM , Rating: 5

I have switched over to RME (Revolution Money Exchange) almost exclusively. I keep a paypal account open for the rare occurances but also have a flag on my account (my choice) so anytime paypal tries to add or remove any money, I get a phone call asking for approval or denial.
RME is a bank so is subject to the Laws of Banks whereas PayPal is not, which is how they get away with automatically withdrawing money from your bank account/credit card or freezing the several hundred or thousand dollars in your paypal account, many times you never seeing that money again. Class action lawsuits are ongoing against paypal but never seem to get anywhere.

1. According to PayPal accepting their ToS (Terms of Service) in effect means you waive your rights to credit card consumer protection laws if you want to use their service, and that you may not issue a chargeback for unauthorized use of your credit card and PayPal account, or if you do, then they have the right to limit your account. Is this legal? We don't know. But it's how Paypal operates.

2. Their customer service is horrible. They bury their telephone number, (intentionally - by their own admission) and only provided support via "form" emails. The only reason their number can be found now is because they were forced to by law (EFTA Electronic Funds Transaction Act) due to complaints from users of this website.

3. Their terms of service are not completely disclosed upon signup and some key "conditions" are not disclosed. They fail to mention their total lack of security to prevent your account from being compromised by phishing & spoof sites. That if your account is accessed by a criminal using one of these methods, PayPal will hold YOU monetarily & legally responsible!

4. 4. If PayPal feels your actions are questionable, PayPal is the investigator, judge, jury and executioner. "Telling your side" of what happened, in most cases seems to be irrelevant. They also refuse to provide you with the details of their investigation and withhold documents they relied upon to make their decisions. Your only contact will be an email that says:

quote:
Thank you for contacting PayPal. We apologize for the delay in responding to your service request.

After review, the decision has been made to keep your account locked. This decision cannot be appealed.

If you have any further questions, please reply to this email.

That will be the end of it as far as PayPal is concerned. You can email back, but you'll just get more of the same. Oh yea, and you'll have to wait 180 days to get your money.

5. If you are a bona fide, up-standing individual with hundreds of successful transactions, but someone pays you with a stolen credit card, your account (by PayPal's own admission) is immediately flagged as being "criminal behavior" and any money in that account is confiscated. If a customer "disputes" the charge, same thing happens. (See email above.) PayPal claims that they will fight chargebacks, but this is only PR, not actual policy.

6. Paypal's fees for NON-credit card funding are the same as for credit cards! This is the single biggest rippoff on their site. We understand Paypal charging a fee when you fund your account with a credit card. After all, they are being charged by Visa/Mastercard, etc. And we understand there is a lot of fraud with credit card funding. However, most of the money sent within the Paypal system no longer comes from credit card funding. However, money spent from PayPal account to PayPal account is subject to the exact same fees credit card purchases are! This money has been in the system for years and is "clean." That is, there are no fees at all to Paypal, and there is almost no fraud at all with this money, but Paypal charges the SAME fees to transactions with NON-credit card funds! Thus every transaction makes PayPal money, but it's nothing more than an entry in a computer database on their system. No money has actually moved, and there are no costs to Paypal. They are just skimming the gravy.

For the real story:

http://paypalsucks.com/

Title

By inighthawki on 10/7/2008 3:35:21 PM , Rating: 2

I assume you want that to say "monthly" fees, not mothly? lol

RE: Title

By feraltoad on 10/8/2008 5:19:31 AM , Rating: 2

Just wait until those fees eat up all the money in your wallet. You'll say it's mothly too.

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eBay is dying.

By guy007 on 10/8/2008 1:52:22 PM , Rating: 2

I used to sell and buy on eBay but eBay's greed is spiraling out of control. Huge fee's on both eBay and PayPal's side. I could still find some products on it but I stopped using it out of principle and I think a lot of others have done that too. We are the customers that seldom come back because we know that when eBay has the power it skips the lubing and forcefully has it's way with us.