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 05:40:23 PM new
I think there are many of us who are still too mistrustful of giving out too much information on the internet.
Personally, I don't think there is or can be any such thing as a secure anything, given that hackers even get into federal web sites and wreck havoc.
A few years ago porno robots got into eBay's e-mail records and suddenly we were all in the wonderful world of porno ads.
What else can the robots of today get into? Does anyone really know?
posted on February 9, 2001 07:32:20 PM new
The first online payment service I used called itself paypal. Like it was really my pal....NOT!
Anyway, my full story on that is on the AW paypal forum under 'My response to Paypal payment'
The problem is trust. This company started out with an always free promise, then reneged on that. I got away before then though. First thing they did was to start changing their rules, without notifying members. I had to be told of their rule changes by a competitor of theirs. This is not the way you treat your members.
Paypal had started getting sellers to trust them by accepting the responsibility to verify the credit card transaction. Then they changed that. They wanted more and more access to your bank account, they wanted you to be 'verified' then they wanted to get in the middle of auction transactions as an arbitrary mediator for disputes. Now if you want to accept their service, you have to give them your CC, bank account access and any other personal control item they decide on next week.
Paypal now makes the member responsible for another party committing credit card fraud, even though as sellers, we do not even have an oppourtunity to review the CC info.
The amount of leverage they want to any money you have on deposit with them, incoming payments to your account, and even the power to drain your bank account without your specific knowledge is just beyond my comprehension to believe there are that many trusting sheep out there.
Even when ripped by the BBB, and members experience a poor response level to customer service, people continue to trust them. It is amazing.
In my own case, rather than submit ti their controls to receive moeny that was sent tome legally by an online auction site, I returned debited the Auction site with a note to keep the money if the only way they could send it required that I give anyone complete financial access to me.
The only thing I accept now is Bidpay. I do not have to give them my bank account.
When a customer sends me a Bidpay money order, they are charged $5.00. To many this is more conveient that purchasinga paper money order themselves and the time and cost of mailing same. Bidpay confirms the transaction and has the money order in the mail to me within hours. I can then ship the merchandise with confidence.
One other note:
I no longer accept personal checks. The items I deal with are not that expensive, but I have had two returned for NSF, and I find that the time spent chasing and the added bank fees involved are just not worth the effort. So, unless I have done business with you previously, or you have some great feedback, I will not accept personal checks. Very recently, I relaxed this rule at the insistance of one customer and guess what? Yep, the day after I shipped the check came back in the mail. when you are talking items in a $10.00 to $20.00 range, it is just not worth the effort. And I do not have the time to be constantly checking with my bank for the status of items for all transactions. I also do not have the oppourtunity to run to the bank to deposit daily
All this points to the need for a reliable online payment service, it is just a shame that the largest one has to treat it's members so poorly while feeding them a steady diet of propaganda.
edited to replace the word 'thing' with 'item'
[ edited by jimhhow on Feb 9, 2001 07:34 PM ]
posted on February 9, 2001 09:01:52 PM new
More and more people are paying with PayPal or Yahoo! Paydirect. 6 months ago I had to ask if they were willing to use either service. Now, they just send the money without me even asking.
Makes auctions very convenient. I just wish they made getting your money back easier. I paid a eBay seller by PayPal. He never sent the product, eBay suspended him, and the auction doesn't "exist" on eBay's database. I pretty much kissed that money good bye.
posted on February 9, 2001 09:20:57 PM new
Glad you asked....I agree that trust is the main cause of reluctance.
I have been using PayPal and PayDirect for a year now and have learned how to change my way of finances to accomodate what the customers want (still in the process, of course). Customers WANT to pay by credit card, customers WANT their items ASAP. This is a fact of life and more and more are not merely requesting but demanding as near the same services as they get at brick and mortar stores. So, IMHO, try to go with the flow or get left behind.
In my case, to obviate the problem of trust for myself, in online payments, I opened a separate checking account just for auctions, and keep a minimal amount of money in there (in case PP decides to freeze it for some reason, not a biggie for me). I also only use a CC that has a minimal amount to charge on it and use it ONLY for online purchases, when a statement comes I know immediately of any problems (or you can check your CC out online if your bank has that service, and know prior to receiving a statement if there is a problem). Until they establish a really great online payment service (convenience, trust, super customer service and all the support services needed for any problems and of course, low cost). So, currently I try to work with what is there and what the customer wants! So far (fingers crossed) no major problems that I could not work out myself or with the help of the customer.
A great online payment service hasn't come forward yet, I'm still waiting and working with what is here.
posted on February 9, 2001 10:02:36 PM new
Now that you ask, I just looked to see what percentages of different payment types I get from buyers. (I don't take personal checks, though people keep sending them to me; I also don't take Billpoint or credit cards through PayPal, since I have a personal account--I save CC payments for my international bidders. But I take CCs through PayDirect.)
My payments this year have been 48% online services, 36% money orders/cashiers checks/cash, and 16% personal checks. I would have more PayDirect payments if the buyers could get it to work more often; they often give up and send snail-mail payments.
I think the reasons for hesitation are obvious---foremost in most minds is the fear that COMPUTER HACKERS will cull the information and use CC numbers to make illegal purchases (after all, MICROSOFT was hacked just a few weeks ago); fear that personal information (like Social Security numbers or income) will be misused by an internet company; fear that they'll be bombarded with junk mail, email, and phone calls from people trying to sell something.
I personally use online payment services, but it's difficult to sell online and NOT use them (unless you have a merchant CC account, which many of us can't afford with our meager level of sales). A seller wants to attract as many buyers as possible, and many people won't bid unless they can charge it to their credit card quickly and easily.
I don't trust PayPal AT ALL, and I withdraw my money immediately from their account. I'm holding my breath that I won't get a chargeback or do something else (like accept a payment made with stolen credit card numbers) to get my account frozen, as has happened to so many others. So far, so good with PayDirect, but I'm warier than I used to be about it, too. BidPay has given me no trouble at all, and I ship merchandise when they say my money order's on the way.
Online payment services will NEVER increase their adoption rates as long as big-time hackers make the news every few months with another corporate or government computer system break-in, or another horrendous virus that crashes computers across the country/world. They can CLAIM to have a "secure" server and "foolproof" encryption all they want, but John Q Public KNOWS there's some computer-genius-social-misfit out there trying his DARNDEST to break their code---just for kicks---and some computer-genius-crook in Romania or Indonesia trying to break the code---to steal financial information and rob us blind.
posted on February 9, 2001 10:10:13 PM new
Funny you should mention Social security numbers, my first paydirect transaction asked for a ss# when I accessed it to accept a payment, refused to give it for the simple reason I am afaid to give # online, I was still able to accept money. After the one time it hasn't happened again, haven't a clue why paydirect would ask this since it was never given when I signed up.
posted on February 9, 2001 10:48:23 PM new
I believe online payment services are here to stay, great way to pay for auctions, lot better than getting a check returned for NSF and it sure beats running down to the local quick stop for a money order to pay for an online purchase, as most people won't take a personal check, no matter how hard you beg and plead. Being a senior citizen makes it hard to run out and get a money order. Most of us have insurance to cover unauthorized charges, but If I didn't have insurance on my credit cards, I most definitely would not use online payment services. I just hope someone challenges PayPay with the same great incentives they had in the beginning! I sure do miss the "good old days."
posted on February 10, 2001 12:44:31 PM new
Does anyone really READ the agreements for these services? Does anyone understand what the law is in regards to protection under the Fair Credit Act? As in, using one of these services, you have none? Not only are you entrusting them with credit card and/or banking information without the protection you would have under the law as a bank customer or a credit card user, but they are pretty much free to do whatever they want, as long as it's in the agreement you clicked "Yes" to. That includes debiting your accounts for any reason they want to, when they want to - and there are plenty of horror stories on AW boards about it.
As a seller, I take cashier's checks or money orders only. If I've dealth with a buyer before, I may take a personal check, and I still wait a full 10 days for it to clear. Unlike others, I've never been scammed this way. There are also plenty of laws covering check fraud if so needed. It bothers me a lot to think about what happens if one of the payment services is hacked or, worse and more likely, goes out of business. There is no FDIC, no insurance, no nothing to protect whatever you have in your account with them. You'll just be out of luck, along with whoever else uses them. After all, you agreed to their terms!
Services are convenient. But untill they have some legal control over them, I'll pass, thank you...
