Here at AuctionWatch.com we're working on a story about the reluctance to use online payment services. According to a recent survey by the National Consumers League, 69 percent of all online auction transactions are still paid for via personal check, cashier's check, or money order. First of all, why do you think there's a hesitance to use online payment providers? Second, why do you or don't you use online payment services? And third, what is it going to take for online payment services to get a better user adoption rate?
Please feel free to address these questions or expound on any other issues that you think are relevant, interesting, etc.
posted on February 9, 2001 06:23:25 PM new
I love to see checks or money orders because they represent one less transaction fee that is deducted from my sale. However, this pleasure is off-set by the fact that checks and money orders also take longer to collect.
Personally, I think many online payment systems are too confusing or too new to trust. The web is full of scams and the buyer must beware. I remember when PayPal was new that I was, at first, put off by their (sellers are also buyers) request for my banking information. Although I understood why they needed it, I feared being scamed. Since businesses come and go so quickly on the web, I really didn't want to give such personal information to a company that had few credentials. But they won me over with their perks and reliability. As their perks disappeared, so did I, as a buyer. As a buyer, I look for simplicity, privacy, security and no fees.
From a seller's viewpoint, I love PayPal because they deposit funds in 3 days as opposed to the usual 5-8 day turnaround. As a seller, I look for quick deposits (I want to earn some interest on my money, too) and minimum fees. I would even tolerate moderate fees if the depost time into my account is shorter than 5 - 8 days.
posted on February 9, 2001 08:00:14 PM new
Well, first and foremost I do NOT want to pay any more fee's, especially one that is primarily designed to allow people to drive themselves further into debt. Credit card co's suck it from both ends, they charge fee's to the consumer AND to the merchant, how many other companies get this privilege?
Second, I worked in a financial industry and computer dependant field and I have seen what happens when you start giving third parties access to your bank accounts.......errors happen and it often takes major headaches,time and work to get them fixed.
Third, the pressure that was put on sellers to "sign up" by buyers who wanted a $10 credit, along with the "bait and switch" tactics used by a certain online payment system have left a BAD taste in many people's mouthes(?sp?). Now Amazon is FORCING sellers to sign up for OneClick and pay the additional fee's whether they want to or not. They have not done a single thing to enhance the auction process in more than a year and now I'm being pushed into giving access to my bank account(which will become a transfer-only account very shortly) and then accruing more fee's for someone else's convenience. Not to mention the added headaches in bookkeeping and keeping track of all this money flying through cyberspace. I was going to seriously consider signing up with an online payment service this year but I wanted to CHOOSE the right program for MY business. This is my first business of my own and I enjoy researching my options and making my own choices instead of being forced.
posted on February 10, 2001 08:51:18 AM new
I will take checks but I do so only with the customers understand that they may not receive their package for about 30 days: 5 to 7 days for me to receive the payment, 10 to 15 for me to wait and make sure I don't get a charge back from the bank, and another 5 to 7 days for the package to arrive to them. I have had only a few checks bounce but I still feel the pain from the ones that did. I get a charge back fee from my bank and it takes additional time and effort to try and chase down the person who has my goods and owes me money - sometimes futile. I encourage sellers not tell the customer they "wait for the check to clear" because the only true way to know that the check has cleared is if sellers contact the bank it was written on. I strongly suggest that sellers wait at least 10 days after the check has been deposited and then call their own banks as see if there are any charge backs - if not go ahead and ship. Please know that I have received notices of charge backs from banks as long as 12 days from the day I deposited checks. Also, the customers have the additional cost for the envelopes, cost for the checks, and cost for the stamps.
Money orders and cashier's checks are great because they are like cash and they do not cost me anything. But, I still have to wait for them to arrive in the mail and I prefer faster transactions. Also, the customers have the additional cost for the envelopes, cost for the money orders or cashier's checks, and cost for the stamps.
I have a Visa/MasterCard merchant account with my bank and I will charge my customers if they want me to. I do have about 300 credit card numbers on file of regular customers who like to say "charge and ship." Some customers would rather call me and give me their credit card information than enter that information in any form onto the Internet. I like to offer this for my customers but I don't like the fees I pay to my bank and in a few rare cases I have had to deal with charge backs and charge back fees - a costly process.
I have done some wire transfers with larger sums. For the $5 to $15 fee that is a lot of bang for the bucks when speed and large transfers are in order.
By a long shot, my preference is online payments. I let my customers know up front that I prefer payments by Amazon Payments, Billpoint or PayPal. Yes, there is some hesitance because of the newness and lack of trust of the Internet - a bit of skepticism is probably wise - but, I think buyers and sellers will come around in time as they see the convenience, savings, and other benefits.
As a seller:
- Online payments give me quick transactions. I get payments immediately with the shipping information and the package is out the door - done, money in the bank, fast shipping, happy customer, and I am a happy seller because the selling process has been streamlined giving me more time to list and take care of other business. - time is money.
- Online payments save me on fees. The fees I pay to Amazon Payments, Billpoint and PayPal are cheaper than the 4% plus $0.50 per transaction I pay to my bank for my merchant account. I don't have a terminal but some sellers have that additional expense too.
- Online payments give me some other benefits.
1. With PayPal, I have a balance in a money market account drawing interest.
2. Billpoint and Amazon.com payments are integrated systems that add compatibility and I think trustworthiness.
3. Amazon's A to Z Guarantee covers me and the customer. I don't have to worry about charge backs.
4. Impromptu buying increased with my listings when Amazon introduced 1click and the same increase was seen when eBay added Billpoint.
5. Accounting is available online and available to me from any computer for each of the online payment systems.
6. PayPal pays a referral fee.
As buyer:
- Online payments give me quick transactions. I can make payment immediately and have my items shipped that day or the next - sometimes I need stuff fast.
- Online payments save me on check fees, money order fees, cashier's check fees, envelopes, stamps, and fuel to the post office.
- Online payments systems have my information already entered and ready to go - helps me spend my money faster.
- Amazon.com Payments give me the A to Z Guarantee.
- PayPal give me protection when I pay a verified member.
- PayPal gave me money for signing up.
There are some drawbacks to online payments but they are far outweighed by the benefits - I may add more when I have the time.
posted on February 10, 2001 10:01:34 AM new
"Money orders and cashier's checks are great because they are like cash and they do not cost me anything. But, I still have to wait for them to arrive in the mail and I prefer faster transactions. "
Ummmm.....Perry, I know that it takes Paypal several days to process a deposit into my bank account. I've heard that Amazon can be extremely slow, taking up to a week once the transfer is done. I believe I read that they only do the automatic transfer every other week so if I wait for that,it could be up to 3 weeks+ before I get my money. Snail mail is a lot faster than that......
Even if I manually deposit my own money from the OneClick payments, it's still about a week or so before it hits my bank account, correct?
I am happy to hear that the Amazon guarantee protects me from charge backs. How does that work? Say someone pays me with one click and their item arrives damaged. I help buyers file their claims but sometimes the buyer gets mad at ME, like it's my fault that the post office didn't take care. They want me to issue a refund and don't want to go through the hassle of filing a claim. What happens if this kind of buyer files a charge back?
posted on February 10, 2001 10:11:35 AM new
I have been with Amazon payments for months now and it's been very consistent. My funds arrive within 7 days, and most times it's 5.
Not only that the interface is great and you can send secondary invoices for tax, shipping, or insurance and it's a great way to keep track also.
And I don't have that pile of envelopes that arrived with a check with no info about what they bought or the return address.
Why anyone seller wouldn't want to use Amazon payments is truly not understandable. They are much better than Billpoint or paypal?
PS! The first worksheet for the online auction Co-op is up and ready for disection and improvement and not too mention those witty comments that so many sellers like to leave. Check out our message board.
posted on February 10, 2001 12:42:37 PM new
3 different sellers lost a sale by me because of having to use amazons online payment service. I won't use it. I have paypal along with their charge card and that is what I will use. I do pay with yahoo paydirect by transfering funds from paypal with the card, into paydirect.
No I do not like the one click thing and that is why I no longer sell on amazon and now will no longer buy there either.
posted on February 10, 2001 02:51:44 PM new
I find that if I have unusual items and good prices, people buy from me regardless. If you're going to get my widget for $15 and have to send a check when the guy with paypal is selling for $30........who are you gonna buy from? I have great service and many faithful buyers.
I'm not saying that the online services aren't a good idea and I'm not necessarily saying they aren't a bad idea either, but shouldn't I have the right to choose for my own business?
And the online payments aren't any faster, it still takes up to 7 days to get your money. I have received payments within a day or two and cashed them immediately, beating the online payment system by quite a bit....
posted on February 10, 2001 04:24:52 PM new
I accept Amazon Click One and PayPal. I also accept Master Charge, Visa, check, money order, and cash as payment methods. I prefer PayPal. Whenever an auction closes or a direct sale is made, the buyer receives a letter from me detailing the payment methods. I also post a link on each auction site telling payment methods. I specify that I prefer PayPal because it can be used on any auction or web site and is run by a US bank. Funds are secure and insured. My benefit is that PayPal sends me my money quicker than Amazon Click One. I usually get it 2 days ahead of Amazon Click One. It is a safe, secure way to pay since the buyer only has to give his credit card information once. I don't like to pay fees any more than the next seller. But the secure feeling that the buyer gets when using a third party payment system is worth it. I consider it a cost of doing business.
I usually ship items paid with Click One or PayPal within 2 days. Cash, check, and money order items ship within 3 days. I have been selling on line for 6 years. I have never had a bad check from any of my buyers. I have had checks bounce, but in every case the buyer made good on the check plus the bank fees I incurred. And I always tell my buyers that I understand that these things can happen, been there, done that.
I have never had a charge back on an item that was paid for by PayPal or Amazon. If someone writes to me that the item was not received, I give them all the mailing particulars and ask that they wait a reasonable length of time. I have had items get lost in the mail, and I try to replace them. If not, I refund in full with postage. Cost of doing business in the mail.
posted on February 10, 2001 08:40:36 PM new
ciocca,
if they charge back it is between them and amazon, not you. that is covered in your A to Z guarantee.
....Following is the link for learning
more about Amazon.com's A to Z Guarantee....
http://s1.amazon.com/exec/varzea/subst/help/auctions-guarantee.html
Folks who don't want to go to the hassle of applying for the A to Z guarantee have made a choice. I work hard to maintain the feedback necessary to qualify the buyers and myself for the A to Z guarantee. If they do not choose to take advantage of it that is their loss and I figure I have done my part. In fact, I suggest to my buyers that if the package is lost, stolen or damaged that they apply for the A to Z guarantee if they did not pay for insurance. This is a great feature for international packages because insured international shipping can often be cost prohibitive.
Yes, it can take a week for the money to show up in your account. If funds are tight that can seem slow, but that is not much slower than waiting for somebody to put a money order in the mail and getting to you. I generally operate on a cushion of funds on hand so I don't have to worry too much about waiting on funds to arrive in my account. I generally wait for the system to automatically transfer funds every two weeks, but you have the option of having your money transferred daily - some sellers do.
