Among other things in this past week I've been dealing with an Ebay auction gone badly and trying to get my PayPal account set up right. I "won" a couple of Ebay auctions with the same seller whose listings said she would combine shipping. She sent me an invoice doing so, I paid it, and then after a few days she sent me another message that she had changed her mind. She wanted more money for shipping. I told her I would prefer to cancel the purchase. I don't think she would lose by it, since I was the only bidder. I don't know how she is going to handle it.
I hate auctions. Half.com and Amazon Marketplace work well for me, because they set rules and standardize payment and there's an agreed price. Sellers who do not behave honorably lose the privilege of selling there. The auctions on Ebay are too loosey-goosey. This particular seller is the worst I've encountered, but I have done very little bidding. I don't like that way of buying things. And now I like it far less.
PayPal requires you to give them a bank account number in order to keep using their system to make purchases past a limit of $2000. Clearly they prefer the lower costs of pulling money out of people's bank accounts rather than paying credit card companies their fees. Credit cards add an extra level of protection for the purchaser, though, especially gold and platinum accounts.
I chose to do it on the up and up, which is always the way I prefer to do things. But I learned that many buyers are not doing it that way. Instead they are using different email addresses tied with different credit cards in order to get a new $2000 limit. PayPal has a rule that they will cancel an account that does this, but it appears they haven't gotten around to catching all the violators.
People who want to sell online in a small way can get set up to accept PayPal payments less expensively than they can get set up to accept regular credit card payments, so PayPal has grown. I read somewhere that they have recently been sold. Perhaps their financial relationship with Ebay is now different.
I came across one site that is offering a merchant credit card account to sellers with no set-up fee. Apparently a typical fee to open such an account and be able to accept credit cards is about $500. Credit card companies take a percentage of the merchant's sale, and I think it's something like 5%, varying according to the specific merchant account. Usually smaller merchants pay higher rates than larger ones. PayPal charges the seller a percentage, too, somewhere in the neighborhood of 2% or so.
It looks like competition is increasing for those dollars from small vendors online. PayPal is trying to make more money, and other companies have their eye on the business. Credit card companies are doing all sorts of shady things to get more money out of every end of their business, including shooting up people's interest rates when they make one late payment.
They also lure people who don't know any better into overextending themselves with credit card debt, at a very young age. You have to wonder how many young people have had to drop out of college as a result of the debt load.
I read that Ebay is planning to set up more online stores with their sellers, so there will be more items for sale without the auction process. That could be a good thing if they will standardize the payment and shipping practices on the sellers so that buyers can know what they are getting into.
Many people are doing a great job of serving customers online. I hope that Ebay will find ways to better support the good sellers and help weed out the ones who don't treat customers right. And I hope one or more payment systems will be developed to provide both buyers and sellers with reliable and safe funds transfers at reasonable rates. At the same time, I hope to see the system stay affordable for small merchants. Small business is very good for the economy and for our overall freedom. I want it to have what it needs to thrive.