Despite the added convenience and popularity among eBay buyers and sellers, PayPal is not without its problems, and they have caused some eBay members to avoid using PayPal to begin with or to discontinue PayPal use after years of PayPal trading:
- PayPal needs a bank account and credit card. In order to use all of PayPal's features and protections, members must supply both a bank account and credit card information to PayPal. For buyers who shop eBay only rarely, this may be a little too much information to give away.
- PayPal can get overzealous. PayPal implements anti-fraud measures in an attempt to protect buyers and sellers. When any one of several types of fraud is suspected on the part of a buyer or seller, PayPal sometimes takes steps such as freezing the connected account(s) until investigations are complete or cases can be referred to law enforcement. In rare cases, innocent parties who have accidentally fallen under suspicion have seen their bank accounts locked by PayPal. In order to mitigate this risk, heavy buyers or sellers often connect an account that has a low average balance and that isn't important to their month-to-month expenses, such as a petty cash account or a "just for eBay" savings account.
- PayPal is not free. PayPal charges any seller doing more than a very modest amount of business a percentage rate for commission. This means that when a buyer sends money, the seller receives slightly less than the buyer originally sent, once PayPal's cut has been deducted. In practice, this means that both buyers and sellers pay for PayPal use, since sellers naturally pass the extra expense to buyers via higher opening bid amounts or higher shipping and handling amounts.
- PayPal makes it too easy. Though some would say that this isn't really a drawback, others have noted that PayPal makes overspending on eBay as easy as or even easier than overspending at a department store or mall. Thanks to PayPal, it's possible for a buyer to put purchase after purchase on his or her credit card with only a single click, without having to talk to operators, swipe cards, or punch in card numbers. Buyers, beware: when you shop with PayPal, it's up to you to keep track of your bank balance!
Think you're ready to join?
If after taking all of this information in you've decided that PayPal might be for you, visit the PayPal registration page to set up a PayPal account for eBay trading today. If you still have qualms or questions, visit eBay's "About PayPal" page or PayPal's "What is PayPal?" page for more information.
