As eBay continues to expand in the world of digital commerce, they are continuing to remove services from the auction side of the business. Back in the beginning of August eBay banned more than 15,000 of the lowest performing sellers, countless other sellers with perfect track records, and discontinued the eBay Trading assistant program. MacMan812 who made his living through ebay had been registered members for more than 10 years, had more then 15,000 positive reviews and had a 100% positive feedback rating is just one of the many examples of individuals who were stripped of their selling rights. MacMan812 plans to continue his business by removing the middleman (eBay) and picking up right where he left off with his new business Fish Computers. While MacMan812 may have the resources available to him continue, many power sellers are not so luck. In one case the individual has just invested more than $10,000.00 in a new store front dedicated to ebay sales only to have their ebay rights pulled out from underneath them with only 30 days notice.
I myself was previously an eBay Trading Assistant, a program that was designed to put people in the community in touch with experienced eBays to aid with the process of putting items up for sale. In honesty the program never actually provided all that much, other than the ability to utilize eBay logos and be listed on there online directory, but what it provided or didn’t offer is not the point. This is a continuation of eBays practices effecting people without any thought or concern for the repercussions it may have on them. In 1999 eBay purchased BillPoint and in 2002 eBay purchased digital commerce company PayPal and BillPoint, making drastic changes to both companies. Since the purchases most users will tell you there experiences have been less than satisfactory. BillPoint was a complete failure and eBay closed the company down just before purchasing PayPal. PayPal on the other hand has grown to being the largest online payment solution in the world, but when you ask many people who were around before eBay took over the company they will tell you they will no accept PayPal. It’s not just the original users who will tell you this but also more recent ones. While PayPal may handle more online transactions then most banks they are not in fact a bank, and are not regulated by any agency. PayPal has made it common practice to place holds on large sums of money without any explanation to customers.
In an example of PayPals notorious practice of holding funds just this year game developer Lab Zero Games raised over $800,000 through an IndieGoGo campaign to pay for the development of a new game. PayPal in turn put a hold on a large sum of the money calling it collateral, even though paypal and IndieGoGo have no relation to each other. What does PayPal do with all the money it holds, well they keep it in an interest baring bank account of course. Now you would think that the persons whose money they are holding would get this interest but you would be wrong. In fact what many don’t know is that any PayPal at any given moment is forcefully holding more than $500,000.00 of customer funds. Even in a low-interest bank account yielding a 2% interest rates, that’s $10,000 a month in profit. The more money PayPal holds from its customers the more money they make in general interest.
So what is eBay doing with all this money? Well they are expanding of course. eBay is in the last stages of closing a deal with Braintree Payments which now processes more than $10 billion in transactions annually from companies like OpenTable, Uber Technologies and Airbnb. Research firm Gartner “expects the mobile-payments market to grow by 31% this year to $235.4 billion — and to increase by more than three-fold by 2017.” This deal will easily make eBay a power house in the world of digital commerce. The question is will these deals benefit anyone other than the eBay stock holders?
For those keeping track this means eBay will now own eBay, PayPal, Venmo and Braintrain. It goes without question that eBay is rapidly positioning themselves to control the majority of online money transactions all without any regulation or supervision. The only difference between eBay and the thugs who shake down merchants for “protection” in bad neighborhoods is what eBay is doing is perfectly legal.
While I have no choice but continue to accept PayPal payments due to the demand of the industry I have started looking for alternative options. Just the other night I signed up for Dwolla and will begin accepting payments through the service immediately, with no transaction fees. Considering Dwolla is willing to give new customers with $10 just for trying the service out, there really is no reason everyone shouldn’t be trying it out as an alternative. Try it out and grab your $10 now by clicking here.