Red Ink Diary

eBay rule #2 : Never, ever keep it simple

In 2008 eBay announced the impending closing of the last open gate in the walled city. All payments would henceforth be electronic, and use of eBay’s notoriously glitch ridden Checkout would be required. Legally eBay could not forbid sellers to take personal checks and money orders but they could forbid them to tell buyers, (i.e. to volunteer the information) that those were acceptable payment mediums, so they did. Sellers are permitted to use their own Merchant Credit Processing but must use eBay Checkout with the PayFlow Payment Gateway. (Pay attention here Mabel we will come back to this later, there will be a quiz) eBay sees Google Checkout as a competitor and it is banned from the site.

Catch 22 in BaySpeak

In eBay’s help pages under “Setting up your buyer payment preferences” it states clearly “All electronic payment methods require you to use eBay’s Checkout.”
Using eBay Checkout says “When you list an item, you need to offer at least one online payment method.” and, later, “One or more electronic payment methods is (sic) required when you list.”

On the same page “Checkout is a preference that’s set automatically when you set up your seller account. You can disable it at any time.” and “If you’d rather not use Checkout when you list an item, you can disable it.”

In summary, you do not have to use eBay Checkout to list an item but you must offer an electronic payment method, which requires eBay Checkout to list an item.

PayPal Alternatives

Three carefully chosen ‘alternatives’ to eBay owned PayPal were approved, MoneyBookers, ProPay and PayMate. Red Ink Links on the subject are provided.

• PayMate is available to buyers in 57 countries and sellers in the USA and Australia only.
• ProPay is USA only.
• MoneyBookers is international, charges the buyer, has problems in Canada due to gambling connections.

Payflow

Payflow was originally created by Verisign and became the leading gateway for small and medium-size businesses, representing about 22% of U.S. e-commerce at the time it was acquired by PayPal in Q4-05.

This is where things get really confusing. I am going to number the Payflow versions.

1. To sell on eBay using your own Merchant Credit processor there is a Free Payflow Gateway. which uses eBay checkout. Existing Payflow payment gateway accounts can not be used for eBay transactions. To accept credit or debit card payments on eBay, you need to set up an additional Payflow account for eBay sales. The Free eBay Payflow has no fraud protection, prevention or detection services, no buyer authentication, it is a stripped down version with no upgrade ability. Payflow is governed by PayPal’s user agreement and privacy policies, but isn’t linked with your PayPal account. You don’t need to have a PayPal account to use Payflow on eBay.

The fly in the ointment? Not all merchant accounts integrate with the Payflow free gateway, many have no plans to do so, citing security concerns. PayPal’s recommended solution, “get a new merchant account”

Payflow Link and Payflow Pro are a la carte gateways - not for eBay use.

Both are virtual terminal, no machine needed, connecting your online store to your existing internet merchant account. Both offer fee based support as follows:

• Technical support via toll free phone, standard additional $12 per month, M-F, 5AM - 6PM (PST).
• enhanced technical support includes email alerts for issues that may affect transaction processing and up to 2 hours of integration support, 5AM - 6PM (PST) 7 days a week, additional $159 per month,
• premium technical support adds priority routing of your support calls 24/7 and up to 4 hours of integration support for an additional $495 per month.

Both Payflow Link and Payflow Pro offer fee based fraud protection and other upgrades, fees are in addition to fees charged by your merchant account.

Basic Fraud protection:

• Setup $29.95
• Monthly fee $19.95
• Transaction fee 5c per transaction.

Advanced Fraud protection:

• Setup $89.95
• Monthly fee $49.95
• Transaction fee 10c per transaction.

Account Monitoring (requires purchase of a fraud package) this is basic chargeback protection level

• Setup $29.95
• Monthly fee $19.95

Buyer Authentication (requires purchase of a fraud package) enables Verified by Visa and MasterCard Secure Code programs.

• Setup $150.00
• Monthly fee $9.95
• Transaction fee 10c per transaction.

Recurring payments, automated installment plan payments, membership fee, or subscription service $29.95 per month.

2.  Payflow Link -  PayPal-hosted, with customizable customer checkout pages.

• Setup $179.00
• Monthly fee $19.95
• Maximum number of transactions 500 per month
• Transaction fee 10c per transaction on transactions over 500
• Support; unlimited email, web (good luck with that, slow)

3.  Payflow Pro -  Your own checkout pages.

• Setup $249.00
• Monthly fee $59.95
• Maximum number of transactions 1000 per month
• Transaction fee 10c per transaction on transactions over 1000
• Support; email, web and phone

Auntie May is (for once) speechless on the subject, she is muttering about needing a strong drink.

Y’all come back!

Prominent (and modest) UK public relations firm Fishburn Hedges

“A bespoke team is put together for each client, creating something genuinely different. The result is powerful: fully-integrated communications programmes based on clear insight and deep experience.”

issued a press release on behalf of their client MoneyBookers February 5th. It trumpets

“The Moneybookers partnership is part of eBay’s efforts towards making its own online checkout process a more consistent and secure experience, providing a better choice to its sellers and buyers. A system like Moneybookers directly integrated on eBay.com will allow for a more efficient and reliable service, increasing the safety of both buyers and sellers in every single transaction as well as ensuring the best possible conversion rates during the checkout process.”

I realize that Fishburn Hedges job is to make MoneyBookers look good but guys, that just is not the most diplomatic language to use about eBay or their payment service PayPal.

To be fair PayPal is relatively efficient and a good system for sellers just as long as it is not being used on eBay. Fishburn Hedges spinners should know right now that Paypal is the only safe way for buyers to pay on eBay. I know that this is true because eBay tells me so, ad nauseam.

Unfortunately either the ‘fully-integrated communications programme’ is suffering from a strategic lack of communication somewhere along the line, or, there is no intention to permit US users to utilize MoneyBookers services. I am beginning to wonder. Might I respectfully suggest that no further trumpets be tootled in the USA until there is something to toot about?

This is the second national level press release on this subject. U.S readers might well assume that the service is available. They would be wrong. The headline says

“eBay.com Integrates Moneybookers as one of its Official Worldwide Accepted Payment Providers”

Maybe eBay has integrated MoneyBookers, however at 7pm London time on Friday February 6th the MoneyBookers website is still returning this message:

click image to enlarge

The questions are:

1. Why are MoneyBookers PR firm promoting a service that is not ready for prime time?
2. At one time MoneyBookers was available to US residents, why was it withdrawn?
3. Will it be available in the USA at some point in future?

Some tidbits about Fishburn Hedges:

Fishburn Hedges is owned by Abbott Mead Vickers, the UK’s largest advertising agency, which is in turn ultimately owned by the global communications group Omnicom.

Fishburn Hedges was the organizer of the tobacco industry front group Associates for Research into the Science of Enjoyment, or ARISE

Isn’t that interesting? As Auntie May would say “Lie down with dogs, get fleas”

Y’all come back!

Adding to the line up of eBay approved payment processors, Dinesh Lathi, VP Seller Experience announced yesterday that Moneybookers UK will join ProPay USA and Paymate AU to become the third uncompetitive alternative to PayPal. The link provided by eBay leads to an informative blank page saying “coming soon”.

Why am I talking about beards? ProPay, Moneybookers and Paymate are the beard (One who serves to divert suspicion or attention from another - American Heritage Dictionary) eBay suits have donned in hopes of avoiding lawsuits or deflecting charges of violating the Sherman Antitrust Act, Sec.5 of the Federal Trade Commission Act, and Sec.7 of the Clayton Act which regulates exclusive dealing contracts, tying agreements, or requirement contracts. Think of it as a prophylactic (def.5) and you won’t go wrong.

Yet another relatively unknown service provider to US sellers, London based Moneybookers is well established in the highly regulated European Economic Community. A characteristic shared with PayPal is its incredible popularity with the phishing set, but I digress.

Note: All rate conversions quoted here are at today’s rate and are subject to change daily. It is quite possible that Moneybookers will eventually offer a different rate to those currently shown on their website for eBay related transactions, and also that those eBay rates may be limited to Power Sellers.

In brief

Moneybookers is not a bank; does not pay interest on any balances in the Customer account & accounts are not insured by any government agency. Having more than one Moneybookers account is strictly prohibited. You may have up to five email addresses. Moneybookers offers an escrow service which carries a 1% (minimum 2 euro or $2.70 at today’s rate of exchange) fee paid by the buyer.

I strongly recommend you read every word of the Terms of Service. Pay particular attention to Section 5.2, Section 7.4, and Section 11 - Termination.

At first glance Moneybookers appears to be more convenient than PayMate, however the buyer pays to send money (0.5 EUR or $US 0.68) which has never appealed to the US buyer. From their website:

• Once registered with Moneybookers, all you need is your email address and password to make payments.
• You can send money worldwide to anyone with an email address – even if the recipient does not have a Moneybookers account yet.
• Register all your credit/debit cards and bank details with Moneybookers and use them to pay at over 20 000 online shops. This means that you don’t need to provide them each time you want to purchase goods and services online.
• Moneybookers provides a localised service with 12 supported languages and domestic payment options in over 30 countries.

How it works

Personal account:

Moneybookers is very different to PayPal. First, you ‘fund your account’ by ‘uploading money’, to upload money by direct transfer from your bank account is free, to upload money from your credit card will cost you 1.9%. I suspect debit cards may be treated like credit cards but I could be wrong. As mentioned above there is a fee of 1% to a maximum EUR 0.5 ($US 0.68) to send money. Moneybookers really doesn’t want you to withdraw money, that costs EUR 1.80 (($2.42)) for direct bank transfer and a whopping EUR 3.50 ($4.73) by check.

Merchant Account:

Section 12.8 of the Terms of Service would seriously concern me as a merchant, it appears to authorize a EUR 25 charge ($33.58) for refunds or chargebacks. On eBay that would be like adding glue to the screw.

12.8. A bank transfer, direct debit, credit card or any other payment first received by Moneybookers or a merchant of Moneybookers from a Customer and then returned to the originator for any reason - whether upon his own request or by request of his bank or payment provider - will incur an administration/chargeback fee of up to EUR 25 per transaction.

As is increasingly standard in the industry transaction rates vary according to monthly volume, scaled from 1.9% for volume under EUR 1500.00 ($2015) to 0.9% for volume exceeding EUR 100,000 ($1,343,363.78); there is an additional EUR 0.29 ($0.39) per transaction fee.

It appears Merchant accounts also pay a flat rate EUR 1.80 ($2.42) fee per bank transfer withdrawal. Interestingly Moneybookers offers a ‘chargeback insurance’ rate at a cost to the merchant of a mere 6.9% to 7.9% per transaction. Nice truck!

Moneybookers has an affiliate program which could provide an additional income stream for sellers.

Y’all come back!

Go Figure - UPDATE January 10th 2009

An announcement is made on eBay.com, the USA site, that Moneybookers is now an approved payment processing provider. A US resident registering with the service receives the message shown on the left. Please click the image to enlarge.