It Is Time For PayPal To Be Regulated

Posted by admin in Internet Marketing, ebay, ecommerce, paypal on 12 26th, 2008 | one response

An Out of Control 800 lb. Gorilla?

Back in July of 2002 eBay realized that it’s Billpoint online payment systen was not nor was it ever going to compete with PayPal. So as is eBay’s normal mode of eliminating competition, they bought it. While eBay was in desperate need of a viable online payment system, and many of it’s users (including this author) applauded the move in it’s infancy, eBay, in it’s inimitable fashion began grooming the payment platform to become a member of the 800 lb. gorilla family by instituting policies that benefitted and protected PayPal from any significant financial exposure, shifting the burdens of business on the sellers.

Since that time there have been tens of thousands of complaints and horror stories about PayPal and the way it has frustrated, damged and in many cases devastated the financial stability of individual and business sellers alike. PayPal and it’s parent company eBay have unilaterally instituted policies and rules that adversely affect how sellers can accept payment, how much sellers can sell, what sellers can sell and how sellers deal with unhappy buyers who use PayPal as a payment system.

eBay and PayPal determine what items sold are considered high risk for fraud, requiring some sellers to ship items to buyers prior to crediting the sellers accounts. PayPal may hold these payments in some cases for up to 21 days. If sellers suddenly increase their sales volume, this raises a red flag and PayPal can freeze accounts pending review. Sellers have no immediate recourse, and all the while PayPal is making money on the float of these funds.

It is important to note that PayPal is not governed by federal regulations, but rather by state Money Transmitter type laws in approximately 42 states. While I am normally not in favor of government intervention or regulation, it is clear to me that there needs to be some way to cage this rogue 800 lb gorilla.

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1 Comment »

NYM Arts Says:
December 26th, 2008 at 6:06 pm

Yes Indeed.
I Alerted the D.O.J that Ebay is Violating the Sherman Antitrust Act.
And the Department of Justice wrote back to me and told me: “Although we understand your concerns, we have determined that the information provided does not warrant further review by the Division at this time. Many consumers feel that they have limited choices, or have lost choices, or that they are being forced to act in a particular way in their commercial dealings. While these are legitimate concerns, they do not necessarily raise antitrust issues. “.
Our Own GOVERNMENT is Helping to SCREW US ! ! ! ! !

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