eBay pushes PayPal on its website, offers perks to buyers and sellers

Stung by recent reports on internet fraud and identity theft, the company which defined online shopping has announced new measures to make the experience safer. eBay has outlined new measures that seek to enhance buyer protection while at the same time protecting online merchants from fraud. However, increased protection is available only to people who use its in-house payment service.

eBay executives said yesterday at the company's annual user conference eBay Live in Chicago that buyers who pay for items with PayPal will be eligible for full refunds, with no cap, if a seller fails to deliver an item as promised. Previously a buyer's coverage was capped at $200, or $2,000 if the item's seller enjoyed a particularly good reputation on eBay.

Sellers will also be protected from fraudulent credit card use. Those who accept PayPal as a payment method will also get unlimited protection against a charge being reversed. Such reversals can happen if a buyer claims not to get an item, or if a payment is fraudulently made.

Previously sellers' coverage had an annual limit of $5,000, and applied only for shipments to the United States, Canada and the United Kingdom. Additionally, those with top ratings would get an improved 20 per cent discount on auction fees.

An estimated 1.3 million people make a living selling goods or services on eBay. The offer covers those shipping to buyers in any of the 190 markets worldwide where PayPal is accepted.

The moves are designed to boost trust in the eBay marketplace as part of a plan to revive growth in its auction business, which has seen slowing growth in recent years. Customer feedback and ratings of sellers, key ways for them to win buyers' trust on eBay, is one focus in dozens of changes it is making in how buyers and sellers interact.

For example, only sellers with feedback ratings of 4.9 on a 5.0 scale will get the aforementioned 20 per cent discount.

''Buyer and seller protection will become the hallmark of eBay," said president of eBay marketplace operations Lorrie Norrington

PayPal spokeswoman Sara Gorman said the changes, due to take effect later this year, reflect the service's increasing confidence in its ability to spot and block many fraudulent transactions before they occur.

The implementation date is planned before the winter holiday shopping season. Similar protections were recently announced for eBay customers in Australia. However, these measures had to be partially rolled back as eBay's assertion that all transactions be on PayPal was opposed by the country's antitrust regulator.

In other moves aimed at keeping buyers from going to rival e-commerce site Amazon and classified site Craigslist.com instead, eBay plans to offer toll-free phone support to top customers this holiday season.

There are some 84 million active eBay users. Three-quarters of US auction listings are paid for with PayPal, and nearly 60 per cent of PayPal payments are made on eBay.

eBay Inc. is an American internet company that manages online auction and shopping web site in which people and businesses buy and sell goods and services worldwide. In addition to its original US Web site, eBay has established localised web sites in 30 other countries, including India, where it acquired and renamed bazee.com. The group had annual revenues of $7.67 billion last year.

 A European bank based in Luxembourg, PayPal is also an e-commerce business allowing payments and money transfers to be made through the internet. It serves as an electronic alternative to traditional paper methods such as cheques and money orders. PayPal performs payment processing for online vendors, auction sites, and other corporate users, for which it charges a fee.

It sometimes also charges a transaction fee for receiving money (a percentage of the amount sent plus an additional fixed amount). The fees charged depend on the currency used, the payment option used, the country of the sender, the country of the recipient, the amount sent and the recipient's account type. On 3 October 2002, PayPal became a wholly owned subsidiary of eBay.