eBay's Google Checkout Ban: Hold the Rotten Tomatoes

Posted by: Rob Hof on July 7, 2006

eBay has come in for a lot of criticism for its decision to exclude Google Checkout from the online marketplace’s list of accepted payment methods. But a number of folks have noted that perhaps the criticism is premature. For one thing, it’s undeniable that Google Checkout is unproven in terms of reliability and fraud protection, and there’s no reason to assume at the outset that there won’t be problems. Probably can’t blame eBay for being cautious. One ex-PayPal employee lists several reasonable reasons for eBay to wait and see.

What’s more, Google Checkout doesn’t allow PayPal as a payment method. Hmmm. One would hope tit-for-tat doesn’t determine policies, but clearly Google isn’t completely open either, even for a payment system that actually is proven (if not perfect).

That said, my clear impression from folks at eBay is that the timing for allowing Google Checkout as an accepted payment system will coincide with a cold day in hell. If in fact Google Checkout checks out and proves not to have fraud or other problems after a few months, and eBay still hasn’t approved it, then you’ll know what’s really at work here. Until then, eBay deserves some slack.

Reader Comments

MK

July 7, 2006 12:05 PM

Isn't that natural ebay doesn't want the direct competition inside of home ground?
Why would they want that? Period.

Rob Hof

July 7, 2006 3:42 PM

MK, you're right, it may be understandable that eBay doesn't want direct competition on its home ground. But for a company set up originally to provide a level playing field for everyone, it's also understandable that some people consider this exclusion of Google Checkout to be against the grain of what eBay says it stands for. So if Checkout proves to be safe and reliable, it's hard to see how eBay can justify keeping it out. (By the same token, neither should Google exclude PayPal as a payment method within Checkout.)

dg

July 9, 2006 10:25 AM

Personally, I really like Paypal, and have zero interest in Google's thing. If I remember right, when Paypal started, Ebay tried to have its own system, but Paypal still became preferred for auction payment.

As an ex-Ebay Power Seller, I really liked the the way the two work together so easily.

And I never quite understood where the rule came in that everything on the net has to be free and open. Ebay has created something pretty damn cool, why is it supposed to let anyone come in and plunder it for free? Would we blame Wal-mart for objecting to Target setting up a lemonade stand in its beverages aisle?

Stefan Richter

July 13, 2006 7:25 AM

Cut ebay some slack? You must be kidding: http://www.theregister.co.uk/2006/07/11/ebay_nochex_fallout/

Stefan

Patrick Donnelly

July 14, 2006 4:19 PM

I had never heard of Google Checkout until today when I found thousands of dollars of unauthorized charges from Google Adwords (which I had also never heard of). Tracing it all down, I would say eBay should get an award for being wise enough to see the fraud coming down the pike with Checkout.

BRAVO EBAY!

Stefan Richter

July 17, 2006 6:01 AM

Oh Patrick please gimme a break. If you were a Paypal seller with any kind of significant turnover you'd know that Paypal is appauling. There is no way to protect yourself from fraud with Paypal, in fact Paypal is encouraging it IMO. I have yet to see one chargeback that I was able to successfully defend - and it was always me, the seller, left out of pocket. Funny but when you speak to Paypal buyers they also complain en masse. Why? Because Paypal is happy to shift ALL the risks of the transactions it charges us for to its customers, buyers and sellers.

I should know, I have to use Paypal because there are no real alternatives. I welcome Google's efforts, it's about time we see some competition in thsi space and they can hardly do much worse than Paypal does already.

Tunde

July 17, 2006 10:09 PM

I actually like paypal but do not like several things. One is the way that they close seller accounts without any specifics - this really can cramp a biz if they do not have a back-up merchant account for taking online payments.

Ebay/paypal does have a monopoly on the huge ebay auction market. The fact is though, I personally know 7-10 powersellers that have all quit selling on ebay due to either a) high fees, b) closure of accounts due to sketchy ip tracing, etc.

This means lots of lost revenue for ebay. What happens is people get merchant accounts, google checkout being one of them. Ebay already allows credit card payments (via merchant accounts) but they are not integrated in the auction checkout like paypal is.

Maybe ebay could charge a certain google checkout fee so that sellers/google checkout pay the same fees as they would with paypal, while they would still be paying ebay fees and have a healthy biz, which so often is closed due to fraud purchases/chargebacks.

I hope they due accept Google Checkout! It would make ebay popular again with sellers and sellers would stop defecting to getting merchant accounts and starting their own websites.

Dave

December 7, 2006 2:01 PM

Half a year later and still no Google Checkout. Hmm...

eBay Powerseller

March 14, 2007 4:32 PM

As an eBay powerseller with 11 eBay IDs, and Powerselle status on all. We focus on 5 categories, we are the top in 4 of them. WE avoid Paypal like the plague. This is a growing trend believe it or not and we actually have a higher percentage of completed eBay items by not using Paypal and using credit cards directly. The facts about Paypal are getting out there, Paypal is not a real bank, not FDIC insured, and a third party processor. Paypal's boasted insurance/warranty is all perception and when it comes down to it, they do nothing more than what your card supports (remember you sign over ALL legal rights to them, they can do as they wish/please with your money for ANY reason at any time).

So, we take cards directly using Authorize.net (not Verisign who is owned by Paypal/eBay). We hope that the Google checkout will be accepted to eBay for one more payment option and if not, we know eBay's true and possibly illegal reasons. By terms of eBay, they cannot determine how you pay, but ban one based on safety records. For now, they are on the line of their legal limits by banning Google checkout, but once they have a 180 day period of satisfactory ratings, if not better than Paypal's, eBay will have to recommend them, or end up banning their own service, Paypal. Double standards is the eBay way and wrong until proven innocent is the slogan. =)

Signed - A very profitable eBay power seller that has seen the times from good to worse to good to getting the worst in 2006-2007.

NoPaypal

March 17, 2007 2:34 PM

Like the fellow preceeding my, I am also an ebay powerseller, and have found sales on ebay growing steadily for the past year. And like him (or her), I also don't use Paypal.

I used to, but after they froze my account with OVER $5000.00 in it, had vague reasons, and would never clearly tell me WHY it was frozen, the end result was I had no option but to start my own checkout and forget Paypal.

In truth, I was pretty sure I'd be put out of business when I lost Paypal. But, to my surprise, my sales didn't fall at all and in the past few months have substantially increased, all without using Paypal once in over a year now.

I offer Bidpay, which is still allowed, although I get only 1 or 2 bidpay transactions a week.

The rest either post their purchase on my own checkout or call my 800 number.

There is an odd perception that Paypal/eBay somehow protect sellers and buyers against fraud, but the reality is they do nothing at all. If you buy and don't get your item, you MIGHT get a token refund from one of those companies, but you may just as fast get nothing.

In comparision, if a seller buys from me, and checks out at our cart, and for ANY reason isn't happy, they can ask for and get a full (less shipping) refund. Simple and done. But, I know the skeptics say 'YEA RIGHT'.. But even if I don't produce a prompt refund, here's the catch. Paying by credit card holds all sorts of rights for buyers. They can go back to their bank/cc company and say I didn't ship, it was garbage, anything they want, and poof, in a few days, they get a chargeback against me. If I don't defend the chargeback, with proof of delivery or an assortment of other things, the customer gets ALL of his money back and even interest accrued on the time it was pending as a chargeback!

The customer gets cost of goods, PLUS shipping, all by the chargeback issued. The money is taken out of my account, without my choice. This is what ALL Visa/MC vendors agree to. And, if my chargebacks get too high (mine are at ZERO!! YEA BUDDY.. I have none, as I provide a good service I suppose) then VISA/MC can put me on 'high risk watch', my discount rate (what I pay to accept Visa/MC) goes up and if my chargebacks keep getting worse, they close my account and I'm out of business.

This is NOT what you get from eBay/Paypal. You'll get loads and loads of grief trying to collect and in many cases, you'll give up FAR before you ever see a dime!

Paypal has destroyed countless lives by their arbitrary and caprious nature, their God-like complex that they can do anything to anyone without the slightest Federal oversight that is so tight at banks and other financial institutions, it's mindboggling. Search for paypal sucks on Google and you'll find many websites with horror stories about how many people have lost their business, homes, and worse due to things Paypal does on a daily basis.

Being an ex-paypal supporter, I loathe everything about them, and wish them nothing but an Enron ending.

It would be would be wonderful for Google Checkout to be allowed access to ebay customers. Ebay would benefit and for those still entranced with Paypal, it won't matter. They'll keep using paypal as they do without interference. But for the millions of us who won't or can't use paypal, then having a strong company like Google operating an alternative would only be a strong benefit. And ebay would only benefit from alternatives.

In a recent SEC statement, Paypal claimed about 100 million customers, but amazing as it may be, claimed only about 10 million actually active customers. And once you start reading the horror stories about paypal in your searches, you'll realizr there is far more smoldering under the floorboards at paypal than you'd have have dreamt.

I love ebay, even if it owns paypal. It's a shame, but it's how it is. One day, when Paypal is brought up on Enron style criminal charges, those of us who've been abused will go out and do happy dances in the street celebrating!

Still selling and makin a buck or two on Ebay.!

MS

Guy

March 18, 2007 7:30 PM

Talking about stifling competition. Let's just go somewhere else. Ebay is getting more and more expensive and full of commercial sellers anyway.
Often times you find the same items in your local shop cheaper than on ebay. Also Paypals free transfer between basic/private accounts is now restricted to a few transactions per year. It used to be unlimited. And more and more hidden charges for this and that. Greed seems to be the main motivation.

Realist

April 3, 2007 11:13 PM

Sounds like a bunch of frauds and cry babies in here.

Roy Gilbert

April 9, 2007 4:44 PM

Paypal charges are unreasonable high. This is because Paypal deliberately abuses their ebay monopoly to ban and discourage any competition to Paypal. Are they seriously saying that Google checkout is less secure than accepting a cheque or bank transfer (which they allow)? They constantly try to scare bidders and sellers into thinking that Paypal is the only secure way to do business. Its anti-competitive and a downright abuse of the ebay's dominant position.

Marc Diamond

August 17, 2007 11:57 PM

After losing quite a bit of money from paypal chargebacks and buyer fraud, it became obvious that paypal really does not protect sellers in any way. I now use google checkout and simply list on auctions that I accept all major credit cards. I have not lost a single sale due to lack of Paypal. Sales have remained at the same level as when I offered Paypal. As a bonus...I save money because Google is free for sellers through the end of 2007. Sure, I do not trust Google to protect sellers any more than I trust Paypal but, at least, it is not owned by Ebay and they do not share my bank and credit information with ebay.

Drew Nolte

August 27, 2007 1:53 PM

Paypal not have problems? From a buyers point of view they are great! From the sellers point of view there are loopholes to get taken in every direction.

MM

August 28, 2007 7:45 AM

For those that lost chargebacks, did you realize that by following the guidelines listed in the Seller's Protection Policy, which you said you read when you accepted the PayPal User's Agreement, PayPal would have covered you 100%? Or did you just ignore the repeated attempts by PayPal for additional information so they could defend you against the chargeback? Card companies only give you so much time (30 days or less) to submit a defense, and once submitted, you cannot add information to your defense. After all, you're not their customer, the other guy is. So, tell me. Isn't the real reason you hate PayPal is because you don't like following rules, even though you read and agreed to them?

Another Dave

September 9, 2007 2:49 PM

From what I've seen, the Google Checkout model looks FAR better than PayPal's. So do the fees. And I'm sure their API will be much better. I've been using PayPal since 2002 but I'm now shifting all my payments over to Google Checkout. I doubt I will ever look back.

George

October 7, 2007 11:56 AM

This is ridiculous because ebay allows sellers to accept Credit Cards on their own without knowing if the seller is accepting them in a "secure" way or not. Sellers can tell buyer to email their credit card info, and ebay wouldn't say a thing.

With every other method, it is up to the seller to ensure security.

RR

November 6, 2007 5:21 PM

To MM, who states that sellers are obviously not following the rules regarding the submission of information to defend yourself in chargebacks, you're SO FAR OFF THE MARK. We have a company that evaluates foreign academic credentials. We were in need of a reliable and inexpensive credit card processor. We went with Paypal for a couple of reasons, but boy did we ever make a huge mistake. Due to the nature of our business, our customers sign an application that states that under no circumstances are refunds given. They submit their foreign academic documents. We do our research and tell them what they are equivalent to in terms of American educational standards. So, from time to time a customer doesn't agree with us. They think their Indian three-year degree, that they embarked upon directly after the eleventh grade-level should be equivalent to an American bachelor's degree. And they want their money back. Every time one of these people has asked for their money back, Paypal has given it to them. EVERY TIME. We have submitted our reports to them. We have submitted the signed application to them, the one that states that "regardless of the outcome of the evaluation, you understand that no refunds will be issued." We have submitted proof of mailing to them. We've gone absolutely out of our way to make them understand why it's not right for the customer to request or receive a refund. And every time, they've sided with the customer. The latest one came six months after we closed our account with Paypal. They didn't inform us that they had approved yet another chargeback. They didn't tell us we owed them any money at all. They simply turned us over to a collection agency. Our lawyer is dealing with it now. Be very wary before dealing with Paypal if you're a vendor.

Michael

November 6, 2007 5:41 PM

I used to us paypal for my business. I had to stop using them for online sales becuase i couldn't win the charge backs, where as my off-line credit card company i always won. I submitted the same evidence with paypal as i did with my offline credit card company. I have since moved to authorize.net and have had no problems.

I personnaly feel that Ebay could careless if you win a charge back. EVEN WHEN I provided FULL evidence that the client recieved said services I only won one charge back.

Rebecca

December 6, 2007 8:31 PM

I use both Paypal and Google Checkout out of convenience, but thankfully I do not operate on Ebay. But I think what we have here is two giant online moguls who are going to throw punches to corner a market (any market). This will be a greed induced war we can expect to last for a while. I think we can also assume that Ebay has absolutely no intention of ever letting Google Checkout be used on their site. Just the same, I don't think you can use Paypal to purchase Google Adwords (or can you?).

cooper

December 20, 2007 4:22 AM

Well Bidpay just closed and all the other online payment services accepted by eBay are either in the UK, India, Australia, or their web sites no longer exist. It's a monopoly that needs to be stopped. Given the financial backing of Google I see no concerns for eBay other than as direct competition with Paypal. For one reader who never heard of AdWords - it's how Google makes its money. And for Realist - you sound like the only fraud and crybaby here - maybe Paypal should fire you.

Jason

December 31, 2007 2:30 AM

The current Google Checkout censorship only illustrates an obvious predatory blow to Google. It exercises its grip on the current monopoly, the "on line" giant Ebay has. Paypal represents an enormous profit generator for Ebay, which it has conveniently, very cleverly cornered net payments. Not forgetting it also serves as a gauge for pending purchases of "on line" companies subject to their Paypal volume. Buyers love Paypal but many sellers hate the controlling factor and restrictions Ebay have placed on many sellers who choose not to use this payment method labeling sales as "unprotected".
Many sellers are further handicapped by their new "Misleading and Discouraging Payment Policy" which illogically and undemocratically forces sellers to use paypal in a manner which encourages buyers to prioritize Paypal.
It is high time that Google starts an "on line" market place that gives people a choice. It is way overdue and many are starving for such an opportunity to sell on another site.
A catchy name like "ebay" will blast Google and Google Checkout into an unprecedented pinnacle of on line trading.

Adamshut

January 13, 2008 5:07 AM

You guys are great,
it's been over 3 months since paypal froze my account for no apparent reason, they made me fax them avery single document i had in my house, even my dog's birth certificate (no kidding, i mean complete non sense), and yeah, i used to love them too.
now, i spend my time looking for alternatives, i m obliged to sell my items on sites like www.craigslist.org, and in my own site now online @ www.adamshut.com but i still wanna go back to ebay i am even a powerseller.
well thanks for sharing

oh yeah MM, you don't know what you are talking about.

Jarhed

January 26, 2008 11:31 AM

I have also been a victim (seller on ebay) of a chargeback using paypal . I had emails from buyer laughing at me that i presented to paypal as proof that the buyer knew exactly what he was doing and that there was only fraud on the buyers part . I now have a collection on my credit report for $300 from paypal . They allowed me to transfer the money to my Bank on the same day as they did the chargeback .

Good looking out for the "good" guys paypal .

Alan T

March 3, 2008 9:52 AM

We all know why , ebay refuses google checkout as a payment .... its because they make far more money ripping people off multipul times per transaction .

1) pay to list ebay item
2) pay 3.5 % + 30 p to recive payment for item
3) pay ebay final fees = almost the same price as the paypal fee
4) pay again if you need to transfer that amount to another paypal account

and because paypal + ebay are now the same company ... ebay cash in alot of money !

NoPaypalAgreed!LetsListAlternatives

April 10, 2008 8:48 PM

Alan T,

You are EXACTLY RIGHT. I am a powerseller. My monthly ebay+paypal fees are more than 10% of my monthly gross sales volume. NOT 10%+ of my profit, (which is close to zero thanks to the huge fees), 10%+ of my monthly gross sales volume. How can any seller make any money with 10%+ of gross volume in fees?

THIS IS A GREAT COLUMN; LET'S MAKE THE WORLD A BETTER PLACE, AND LIST CAREFULLY

>>>EVERY POSSIBLE ALTERNATIVE TO PAYPAL

FOR ALL SELLERS, EBAY AND OTHERWISE:

1. Authorize.net
2. Make your own checkout
3. Google Checkout (still banned by EBAY as far as I can tell; let's petition ebay tirelessly until they remove the stupid, senseless ban, obviously motivated only by greed and shortsightedness)
4. moneybookers.com (in my experience I found it to be just about as expensive as paypal, and I do not know if it is better, but, it is an alternative.


PLEASE, ADD TO THE LIST ! LET'S MAKE AN 'ALTERNATIVES TO PAYPAL' LIST AS LONG AND COMPLETE AS POSSIBLE, AND KEEP ADDING TO IT AS OFTEN AS WE CAN. HELP PEOPLE GET OUT OF USING PAYPAL. THANKS!!

ken

June 3, 2008 3:20 PM

As a seller on Ebay since the 90s, I decided not to use Paypal at all, also moving away from Ebay after raised the fees and changed the feedback system in fav of buyers. I found CraigsList, Ebid and iOffer are much much better than Ebay, of course the traffic is a little less but eventually it will pick up. Also, I highly recommend Google Checkout and Moneybookers. They are both seller friendly. Paypal is just pure evil when comes to the sellers. A word of advise, if you are a seller on Ebay and using Paypal, you are taking a 50/50 gamble on your money and your goods because of the charge back scam!!! You may get your payment, but you may loose everything! Specially if your margin is small, think about it!!!

Adamshut

June 14, 2008 2:44 AM

Yes, Ken you are right!

You can't go wrong with craigslist, it is free, and deal locally if you dont wanna be scammed. I do it all the time. My paypal account is now active, but b4 i receive money in it, i think twice.

Please sell on craigslist, and offer to travel to meet half way.

Always deal with cash and in person.

And for all of you having trouble with Paypal, just file a complaint with the big brother "BBB" it works, but paypal will ban you for doing so. You will get what ever money you have in you account.

Seriously Craigslist.org is the way out of ebay

john

July 26, 2008 12:46 AM

Ebay doesn't want google checkout because they own paypal lol..

Your right Craigslist is the way to go for big items.

googleandpaypalsuck

October 22, 2008 1:25 PM

My merchant account was just closed for no apparent reason, and I have spent the last 1/2 hour trying to find a number to call, so that I can speak to a manager about this. Even though I am NO fan of PayPal, at least you can call them, and speak to a human after they screw you over. I'm sick and tired of spending my limited time as a small business owner dealing with such ridiculous situatons. A couple different times PayPal limited my account for no reason, and then after days of communication, released it without any explanation. As a result, I stopped using Paypal, and began to use Google Checkout as an alternate method of payment, in addition to direct CC, COD, or company check. Looks like I jumped out of the PayPal frying pan into the Google fire here, doesn't it?

If a company is willing to summarily close or limit your account without notice or reason, and then won't even publish a phone number to call, I am no longer interested in doing business with them! I have been in business for over 20 years, and only in the last couple years have I seen such a complete lack of customer service in this country. It is obvious that companies such as eBay and Google have been the biggest reason for this serious decline in good customer service. It's the new, give me your money, shut up, and don't bother me corporate culture that eBay, PayPal, and Google live by that will send most merchant like myself back to our local banks to clear payments in the future.

Finally, even if this problem was caused by a misunderstanding or error, the summary judgement, and lack of communication is COMPLETELY INEXCUSEABLE! It is shameful for Google to treat it's good customers this way, and I look forward to the day the free market system corrects these corporate juggernauts for the horrible customer service they have dished out to their good, loyal customers.

Steve

December 23, 2008 10:14 PM

Google Check out is a nightmare!! There is no way to contact them by phone and they answer very few emails and when they do it is a canned response. You have no idea what they are doing for you (or not) They offer very little protection and do not follow their own policies. They have one rule they stick to "The merchant is always wrong" It has cost me a lot of money to learn this.

Noel

October 10, 2009 12:13 PM

Here is the solution to all your paypal and eBay problems, play paypal and eBay at their own game. Buy all your stock with paypal then file chargebacks on everything you purchase then sell it all on eBay with a merchant account using multiple user ids then once your ebay fees are due close the accounts and open some new ones letting them eat their own fees. Once you can do that on a steady basis you have become a true powerseller and defeated eBay and paypal.

Post a comment

 

About

Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

Categories

 

BW Mall - Sponsored Links

Buy a link now!