Earlier this year, eBay announced its intent to intermediate or manage payments on its platform.
This is the first step in moving away from PayPal’s dominance on the marketplace and eBay hopes it will bring a more user friendly payment experience to buyers.
Many sellers are skeptical of this decision by eBay as PayPal has become so synonymous with paying on eBay. Many sellers are anxious on why eBay felt it needed to fix a process that was working?
Even after eBay and PayPal split, the integration between the two companies continued to be tight. in Facebook groups and other internet forums many sellers felt moving away from PayPal is a huge mistake.
But, despite the criticism from sellers, eBay forged ahead. Today, the company announced it starting to manage payments on its Marketplace platform in the U.S.
“The introduction of eBay’s new payments experience in the US marks a significant milestone in our managed payments journey. In less than eight months since announcing our initiative, we’ve moved rapidly to build our back-end payments platform, engage thoughtfully with our seller community to solicit their input and line up new forms of payment – all of which has led to the introduction of managed payments. Looking ahead to 2019, we will expand our new experience to more buyers and sellers in the US and begin rolling out our new payments experience outside the US.”
Steve Fisher, Senior Vice President of Payments at eBay
Benefits For Sellers
With managed payments, eBay will manage the payments transaction, which means shoppers will complete their purchases without leaving eBay.
The company says the goal of managed payments is to drive significant benefits and efficiencies for eBay’s hundreds of millions of global customers.
In the new managed payments experience, eBay believes sellers will enjoy a simplified pricing structure, more predictable access to their funds, and better visibility into sales and payouts.
The company provided specific benefits for sellers:
- Most sellers can expect lower overall selling costs in the new payments experience.
- Sellers will no longer be paid from buyers via PayPal; instead, payouts will be sent to sellers’ bank accounts.
- Sellers will benefit from consolidated billing, with all fees for selling and payments in one invoice, and centralized customer service.
- Sellers do not need to do anything to enable new forms of payments for buyers.
Benefits for Buyers
For buyers, eBay says the new payments system will provide consumers greater choice in payment options at checkout.
For example, in July, the company announced that Apple Pay would be among the first mobile forms of payment offered in its new payments experience.
Today, buyers can use Apple Pay to purchase items on their mobile devices from sellers participating in the initial phase of the new payments experience.
Restrictions and Acceptance
eBay will have a tough road ahead to convince sellers to become comfortable with the company managing payments.
The initial word about the Beta during eBay Open 2018 included news of restrictions that would make it very difficult for some sellers to participate.
Specifically, of concern was the revelation that sellers taking part in the rollout phase could not accept PayPal payments.
There is no word from eBay if this has changed because the reaction by sellers in Facebook Groups and Internet forums was overwhelmingly negative about that restriction.
Regardless what sellers may think about the eBay Payment system, it is now becoming a reality, and this represents a new milestone for eBay.
Can the company transition buyers and sellers away from trusted PayPal to its own system with no or minimal impact on sales?
eBay’s track record in rolling out major new initiatives has been checkered. But to be fair, most of those changes, including revamping the feedback system, were under the previous regime at eBay.
Any news of problems will give Wenig and company significant heartburn because sellers so far have shown little faith with this new payment program.
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