eBay Bans Sellers from Offering PayPal Rivals

eBay is now banning sellers from offering PayPal rivals ProPay and Skrill as payment methods on its marketplace. The move comes the same day PayPal raised fees for merchants processing over $3,000/month in payments - a 32% increase for higher volume sellers.

The moves come as sellers await word about changes to be rolled out as part of the Fall Seller Release. Incoming CEO Devin Wenig, who took over from John Donahoe in July, promised to refocus on the core market, and sellers were hopeful there would be positive news included in any changes he planned to introduce.

A reader forwarded a letter she received from eBay on Thursday informing sellers it would no longer support the two PayPal competitors. "I stopped taking PayPal on my listings a while ago," she wrote, "and only offer Propay. No warning from eBay and no word of replacement services? Are we in effect forced to use PayPal only now?"

eBay told sellers in its email on Thursday:

Over the course of this year, eBay has conducted a global review of the use of payment methods on its websites.

Please revise the payment methods offered on Good 'Til Cancelled listings to avoid them being taken down 30 days from their initial listing date.

eBay is contractually bound to maintain the majority of its GMV to be processed through PayPal as part of its 5-year operating agreement it entered into at the time of the breakup in July. eBay must ensure that 80% of GMV is paid via PayPal, otherwise it will have to pay PayPal "restitution." And eBay has an incentive to get shoppers to increase their use of PayPal on its site - if the percentage of GMV paid via PayPal goes above 80%, eBay will earn a bonus from PayPal.

One seller wrote on the eBay boards, "Sounds like eBay is getting anxious about meeting the 80% of payment processing to PayPal after the split...Easy way to do that is eliminate other forms of payment."

One seller was more sympathetic to eBay, writing, "Could just be cutting operational costs too..less code, fewer coders and managers devoted to little used payment methods. Probably a combination of the PayPal requirements and cutting operational costs."

But it's also possible that eBay had only offered the rival payment services to appease antitrust regulators - now that it no longer owns PayPal, it likely feels freer to ban rivals. However, it's now in a gray area since it still has strong ties to PayPal for another 5 years.

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