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Is ProPay a Good Alternative To PayPal for eBay Sellers?

October 19th, 2008 by Skip McGrath

In my opinion NOT Now, but it may not hurt to have it.

eBay and ProPay announced their deal for eBay sellers that will take effect next week. Starting next week, Silver, Gold, Platinum and Titanium eBay Power Sellers can sign up for ProPay and integrate ProPay into their eBay business much like they now do with PayPal.

The rates will be similar to PayPal: 30-cent transaction fee plus 2.7% for Silver Power Sellers and 2.4% for Gold and Platinum. eBay Titanium Power Sellers will be given special rates (Why am I not surprised?). Bronze Power Sellers will be “invited” to join the program sometime next year.

Rather than rewrite all the details, if you want to understand the ProPay (ProPal?) deal, Ina Steiner at AuctionBytes has done her usual thorough and excellent analysis of the eBay and ProPay announcement. There is some important information in her report, so please click here to read the whole story.

I am going to confine myself to some observations.

Disadvantages

  • The rates  are about the same so there is no cost advantage
  • You now have two services to deal with instead of just one
  • We already have a merchant CC account as many larger sellers do and their rates are about the same as ProPal, plus I get a machine for procession offline or telephone transactions

Advantages

  • One advantage I see to joining ProPal is to help the occasional buyer out who does not have a PayPal account or those who have a PayPal account and don’t want to use it for some reason. We get a lot of this around Christmas. A wife wants to buy something for her hubby and doesn’t want him to see it on the PayPal account.
  • When you have an unhappy customer they have to sue the credit card charge back system. This is slightly better –and a little more in your favor than PayPal. If you sell the type of goods subject to a lot of returns this could be a big advantage, but for most sellers like us, it doesn’t add up to much.

Stay tuned for more. eBay said they are currently working with several other payment processors and will announce those in January. For me, I am going to take a pass for now and see how this all plays out. If I have leaned one thing being on eBay, don’t rush into new services until they have had some time to percolate on the site.  Jumping right into ProPay now, would be like taking a cake out of the oven five minutes before it’s finished baking. It will still be a little soft and mushy in the middle.  I also want to see what the other services will be and how PayPal integrates with PayMeLater whom they just purchased.

Until next time

Skip McGrath

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