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 05:46:38 PM
Well one reason they hesitate is that they are required to give out so much personal information and some just aren't willing to give it out, thus sending a money order is much easier for them.
I personally like the convenience of using one, but have found that many of my buyers are still sending checks and money orders.
Don't know what it will take to get more users interested.
posted on February 9, 2001 06:00:09 PM
Look at all of the complaints about paypal on this board and you have your answer.
I have thought about it a number of times, but after reading the problems with paypal, there is now way I am trusting any of them.
And as dannkim said, I already gave my personal information to the credit card company or my bank, I am not giving it to a third party so I can pay the seller (another third party.)
I think that paypal would be the worse online payment service to use. They beam money to the sellers even when they have no account which I think should be illegal. I dont want them forcing their spam down my throat. My bank advised me that they are not FDIC insured, and that giving them any personal information would be a huge mistake. I also think the wall street journal article was a blow to them. I did read where ebays spokesman said only 20% of online auctions are paid by these services. I dont think they can do anything to help make people feel better. I started eBay a few years back when checks and money orders were king, and I have stayed with them. I do not accept online payments because my goal is to protect my customers money. I also use anti-paypal gifs in my auctions.
posted on February 9, 2001 06:05:47 PM
Hello Andy..
I personally do not like Credit Cards..I do not own one, and have not in probably 15 years. I just use my ATM...NO CHARGES.
That said, I can see that it might be convenient. However, I would not want to send an expensive piece paid by CC, suddenly get a charge-back...and risk NOT GETTING MY MERCHANDISE back....
With a Money Order or a Check or Cashier's Check, I can state, IF I WISH, that there is no return, no refund. I never stated it in my auctions, and only once, did I have to send a refund, because customer changed his mind on a $1,500 item , but I like the freedom of choice of being able to name my terms, should I wish to excercise that right...After all, it IS an auction, not the local department store (BTW: I sell Antiques, often rare or limited in numbers).
Based on the number of times PayPal has had to ward-off "copy-cats", who were duplicating X.Com's page, and harvesting IDs and Passwords, I can see there is a great potential for being taken to the cleaners...
I used PayPal for a short while..yes, it WAS convenient..But they have changed their terms so often in their short life-time, that it ended up making me uneasy.
If they can change their terms at a drop of a hat, so can other companies. And that does not inspire confidence..
Personally, I cannot see any time in the near future when I shall be using CC companies again. And later in the future? Well... I'll be dead...
********
Gosh Shosh!
posted on February 9, 2001 06:12:44 PM
I've been reluctant to use online payments because I'm not completely convinced of security against fraud, etc...
I heard on the news today (or maybe yesterday) that some of the major Canadian banks are planning on setting up a system to allow electronic payments from person to person. At present they only permit payments to major corporations, etc. I would be more willing to trust a system set up and backed by one of our chartered Canadian banks than a service offered by a private company...
posted on February 9, 2001 06:33:31 PM
First of all, why do you think there's a hesitance to use online payment providers?
Fear. Most of the internet users today are relatively new to cyberlife. It is difficult enough for them to buy from someone named panda88 rather than WalMart or Sears. They were not comfortable to begin with, but they are willing to give it a try. Now, you're asking them to pay for something through a company they have never heard of; without their signature, and without a receipt. Most people are not used to this. It is hard enough buying something from a cyber-merchant, but paying for it with cyber-cash crosses the line. Now, not only do they have to worry about not getting the item they paid for they also have to worry about the company they just gave their bank account number and credit card info to. Last year we found that we had a very high rate of abandoned shopping carts on our websites. We put in a toll-free number and our sales doubled. (some was from normal growth, but a large amount was from people that stated that they would never use a credit card on the internet)
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Second, why do you or don't you use online payment services?
I do. Very frequently. Over $1,000 last week alone through PayPal. Why ? Because I have been using the internet for purchasing and selling for many years. The fear passed long ago. Now, there is not as much reason for concern. There are laws that limit your liability for fraudulent charges on your credit cards, and all three major cards that I use (MasterCard, Visa, and American Express) have zero liability policies for internet fraud stated clearly on their sites. If I don't receive what I paid for, I know I have the option to dispute the charge. That is a lot safer than trying to stop payment on a money order that has already been cashed.
And third, what is it going to take for online payment services to get a better user adoption rate?
A payment service directly through Mastercard, Visa, Discover, or American Express that offers the same 100% protection their accounts do. A payment service is not going to instill confidence in an already fearful public by passing off fraud protection to the auction site, (as paypal's recent policy change did) or by requiring buyers to submit additional financial information to receive the protection. The other option is to establish a brick and mortar relationship, such as Bank of America or Citicorp where a user can walk into a branch office an open their cyber account and speak to a representative if they have a problem. When a person has a problem with their money, they don't want a canned response via email. When my bank statement is wrong I want to go to the bank and have it fixed on the spot and a receipt to prove it. If my bank told me to send an email to their support department I would find another bank.
posted on February 9, 2001 06:49:07 PM
Why the reluctance? Everyone knows a friend of a friend who worked with a guy that knew a fellow that used his credit card/bank account online. The story as it was relayed to me is the fellow's life savings were cleaned out and his credit was destroyed.
Remember the Y2K bug? I'll probably never recover the funds I lost when the Y2K bug hit. If only I had listened to the warnings of others.
posted on February 9, 2001 07:02:12 PM
I do use paypal on a limited basis.
Slightly off topic:
One of my concerns with both paypal and ebay, is they want your credit card number, not to charge for services or payment, but strictly for verification. Ebay wants one before you can use the new BIN feature, and paypal wants one to verify your mailing address. I have used my credit card for online purchases on Amazon and half.com, but I won't give it out as a form of ID.
posted on February 9, 2001 07:10:34 PM
I agree with all the comments on this topic tonight. I absolutely will not give my bank account number to these services.
Also when I was using PayPal and I was accepting a check from them as a form of bidder payment, I had so many problems with them that I cancelled my account.
A month after I cancelled they were still accepting payments from bidders even when I noted in my auctions that I did not accept PayPal.
Personal checks and money orders work for me.
posted on February 9, 2001 07:14:44 PM
Quite frankly, the article should be the great adoptance of online payment services in a short time!
Remember folks, what was talked about here two or less years ago? Payment services charged 8-9%, and a couple even were outright frauds (those folks in Cincinatti, remember them?)
Paypal was a godsend compared to them! Billpoint was in its infancy as well.
Think about credit cards. Back in the 50's when they were introduced, was there a 30% impact on the market in TWO years?
Right now, lots of people have problems giving sensitive information to a computer. Most of the same people have no problem filling out a credit card application and handing it to a stranger in a store, or sending it through the US Mail, in an easily recognizable envelope, where it goes through dozens of points where it can be stolen.
posted on February 9, 2001 07:33:31 PM
UARU: Unfortunately, it was a direct friend of mine whose credit card number was hacked, when I made an on-line purchase for her. Thank God her company credited her the unauthorized charges!!!
I do not use online payment services simply because of some of their reputations {paypal}. I closed my paypal account for 3 reasons; after reading someof the things I read, I didn't want them to have access to my account. Secondly, I didn't appreciate the way they held my money hostage in order to get me to upgrade my account to one that charges fees. I sold a playstation for $600. They gave me about half the money, and then gave me the rest when I upgraded my account. The third reason I closed it was because I got the run around when I filed a fraud report. It was only $30, but they wouldn't do anything without the certificate of payment from EBay, which I couldn't get because of ebay's deductible. When I asked them about this, I got a reply that was basically a cut and paste of the pertinent information from the first email.
Even without the hassles, PayPal was well on it's way to losing my business when they started charging fees. Quite honestly, online payment services are nice, but, when you do auctions for low priced items, you can only take so many 'little' fees. If your profit margin is less than $5.00, between ebay and a payment service, you can easily lose 20-25% of that.
Probably more info than you wanted, and probably rather muddled. Codiene does that to a person's brain
posted on February 9, 2001 08:15:00 PM
I am not convinced of the reliablilty of any type of online payment service, but I am willing to be a guinea pig and I do use them on a somewhat limited basis. Likewise, I use the internet to monitor my bank account balances and I now pay my credit card bills online.
The holdup is never technology, it is the resistance of people to change their ways. I try to do my part, because the old method of writing a dollar amount and signing my name on a piece of paper really doesn't make sense any more.
IMO, Paypal set the whole thing back severely by launching a service with a poorly conceived business plan (always free).
posted on February 11, 2001 07:29:17 AM
In a WORD:
Privacy.
In several words ... they require way too much personal information and do not have a strong privacy-protecting policy. I don't want to pay for widget and get deluged with spam and mailed ads for more widgets!
And the continual policy changes of PayPal, the sudden demise of ExchangePath, and the fraud charges against (forgot the name), etc.
LACK OF TRUST, nourished by the continual news stories about fraud on the Internet. With a check you have mail fraud laws behind you.
posted on February 11, 2001 07:55:18 AM
I don't worry about privacy anymore. I have a feeling that anyone who wants your information can get it one way or another.
I use Billpoint and I like it. I have 1 credit card with a low limit that I use exclusively for internet shopping. I can access my account on line to keep track of it. I also have the zero liability clause.
I like shopping this way because if I'm not happy with a purchase the CC company has a lot more clout when it comes to straightening thing out than one individual.
posted on February 11, 2001 08:46:11 AM
Most of my customers (about 90%) are using online payment. So I dont think there is a mass fear about all online payments, just about specific ones.
What can online payments do to gain more usage?
1) provide clear rules about how they work and stick to them. Services that change the rules daily and never stick to them are ruining things for themselves and everyone else.
2) provide decent security. going after the easiest target (whichever party foolishly verified with their bank account) and freezing entire accounts over one transaction does not inspire confidence.
3) provide customer service and that does not mean one employee monitoring auctionwatch for complaints. There is no excuse for why it takes WEEKS to get an answer to a problem, particularly if the problem is the freezing of an entire account.
In other words, if other online services operated the way Western Union's Moneyzap, Bidpay or Achex worked, there wouldn't be such a problem. But as long as some services think that they should continue operating in the same miserable manner that Paypal, Exchangepath and to some extent Paydirect have done, we all suffer.
, but I like the freedom of choice of being able to name my terms, should I wish to excercise that right...After all, it IS an auction, not the local department store (BTW: I sell Antiques, often rare or limited in numbers).
