Finalising the Break-Up: Sellers can no longer use PayPal on eBay

Things are changing for sellers on eBay. New terms of use are coming into effect which means the platform will now bypass the use of PayPal and instead pay sellers directly into their bank accounts. Despite this, buyers will still be able to purchase goods using PayPal.

While it may seem like a simpler process, many sellers are disgruntled by this change and have threatened to stop using the service. There are a number of posts on eBay’s forums from sellers reluctant to use the platform after the introduction of these new terms of use.

There are various reasons for sellers’ reluctance, mainly surrounding eBay’s direct access to bank accounts and delayed payment. Previously, if PayPal was used during a transaction, the payment would be with the seller almost instantly, but using this new system, the payment can be held for up to two days by eBay before reaching the seller.

Despite threats to abandon the platform from sellers, eBay have made it clear that these changes are not optional and listings may be removed should sellers fail to comply with the new terms.

What else is changing?

PayPal fees will no longer be added to the transaction process once a sale has been made. However, eBay has simultaneously increased its fees, although the company says that people will still pay the same as (or less than) they did before the move.  

In terms of cost to users, the new system is 12.8% of the final amount including delivery, plus 30p in the UK ($0.30 in the US). Previously, the system was 10% for eBay, plus PayPal’s fees, plus 30p. 

eBay also points to a wider range of payment options that the new system will offer. Buyers will have the choice when making a purchase of paying with credit and debit cards, Apple Pay, Google Pay, as well as PayPal and PayPal Credit. 

While the system is mandatory, not everyone will feel the impact immediately this month as it comes into force. eBay has stated the change will roll out in phases, so some sellers might find they get a message from eBay advising of the changes over the new few weeks or even months.

What's the problem?

Historically, eBay have protected their buyers, usually at the expense of those selling on the platform. The problem for sellers stems from the fact that the compulsory system leaves them vulnerable to refunds being automatically issued to buyers if there are any disputes during a transaction. eBay have tried to reassure customers, stating that they will be told in advance of how much is being taken out. Similarly, any fraudulent payments should be refunded.

eBay insists that the move is to deliver an improved and more convenient service, as it will be easier and more efficient to use. The platform also states the change ultimately provides a greater degree of payment options for buyers, which in turn should be positive for business.

This is the first major change after an almost two-decade partnership with PayPal, which split from eBay in 2015, perhaps highlighting the finalisation of a break-up. It also makes clear that eCommerce is a consistently changing landscape meaning it is vital for businesses and individual sellers to stay up to date with the latest changes.