eBay Technical Problem with PayPal Causes User Anger Again

Reports surfaced yesterday evening on the eBay community boards as well as some Facebook groups that buyers could not check out on eBay using PayPal.

Several users on these boards claimed they contacted eBay and learned that there was a problem with the link between eBay and PayPal and were told that the technical staff at eBay was looking at it.

As of this morning, neither the PayPal Status page nor the eBay System Status page shows any issues. Also, in eBay’s community forum, we have not seen any answers provided by eBay staff regarding this problem.

Unfortunately, this problem caused a lot of confusion since eBay had ditched PayPal to build its own system to manage payments.

Last year, eBay announced that it completed the migration from PayPal managing payments on the platform to its eBay Managed Payments solution for all sellers globally.

With this technical issue creeping up yesterday evening, some users believed this was a permanent final change of this relationship and that eBay had completely abandoned PayPal now.

However, that is not the case as PayPal continues to be a payment option under eBay Managed Payments for buyers and there is no known plan to remove it.

eBay only switched sellers to its payments solution, completely removing the ability for sellers to manage their sales on eBay through PayPal.

While this has created a furor among some long-time sellers, it has also offered eBay an opportunity to fix some issues on the platform that have plagued sellers for a while as well.

For example, with its own managed payments solution, eBay is able to reduce the number of unpaid items when sellers accept offers from buyers through eBay’s Make Offer function (if enabled by the seller).

In addition, eBay plans to release a Digital Wallet which will expand the use of funds stored on eBay from sales to be used on the platform to make purchases.

While eBay’s Managed Payments continues to be maligned by many long-time sellers that used PayPal as a business bank account, new sellers seem to be perfectly fine with it as eBay payments functionality rivals many other marketplaces today.

eBay Should Have Addressed Issue Head On

But this technical problem with the link between eBay and PayPal has resurfaced the anger from some veteran sellers and it shows how important it would have been for eBay to address these reports quickly to avoid confusion.

Not only did some users provide incorrect information on Facebook forums by mistakenly referring to the switchover for sellers, but it also further degraded trust in their payments platform again.

Technical problems occur, but it is how a company communicates and addresses these issues that make a big difference. That is where eBay failed here, especially since this has been a sore subject with many users.

And considering last year the company lost 18 million buyers and 2 million sellers, it should beef up its transparency a bit to maintain the trust among users that are frustrated with the platform. Especially since trust is part of the selling point it is making now why it can turn around the sluggishness of the platform.

We have seen some indications that this problem may be resolved as of this morning for most users.

Richard Meldner

Richard is co-founder of eSeller365. He has over 17 years of experience on eBay which includes tens of thousands of sales to buyers in over 100 countries and even has experience with eBay’s VeRO program enforcing intellectual property rights for a former employer. And for about two years Richard sold products on Amazon using Amazon FBA in the US.

To “relax” from the daily business grind, for a few weekends a year, he also works for IMSA as a professional race official.