The word is that eBay is banning checks and money orders, and buyers will have to use PayPal or (if the seller has a credit card merchant account or an account with a service called ProPay), credit cards.

Here’s how eBay explains the change:

Starting this fall, we’re moving to an electronic checkout process that’s faster and more reliable for sellers and buyers. As part of this move, checks and money orders will no longer be accepted on eBay, although buyers can still use these payment methods for item pick-up, at the seller’s discretion. In addition, the electronic payment methods will be fully integrated into eBay checkout. For example, if a seller has an internet merchant account, a buyer will be able to directly enter a credit card and never have to leave the site.

Today, items paid with check or money order are 80% more likely to result in an item not received (INR) than those paid with credit card or PayPal. Also, buyers who pay with check or money order are 50% more likely to leave negative feedback than those who pay with electronic methods. So starting in late October, 2008, we are moving to 100% electronic payments – credit cards, ProPay, or PayPal.

This means that sellers will be able to offer credit card payments through their own merchant accounts, and payments through ProPay and/or PayPal, with all payment methods integrated into the checkout process on eBay. Seller will also get paid faster and be able to ship items quicker. And remember, for those buyers and sellers who use PayPal, we’re backing every eligible transaction with our buyer and seller protections.

The New York Times says that this is all part of a shift away from auctions and toward fixed price sales.

“Clearly there’s a strong buyer preference for fixed price,” said Lorrie Norrington, president of eBay Marketplace, which includes the eBay site.

The banning of checks and money orders leaves some wondering about anti-trust issues. An official eBay FAQ says that popular alternate payment options such as Checkout by Amazon and Google Checkout, are being excluded from eBay because they compete with PayPal:

Google’s and Amazon’s products and services compete with eBay on a number of levels, so we are not going to allow them on eBay.

What do you think about this new move? Will it really stop fraud? Or just increase the use of PayPal?

EBay Is Planning to Emphasize Fixed-Price Sales Format Over Its Auction Model [NYT]

***A Message from Lorrie Norrington: New Pricing, More Incentives, and Other Changes to Bring More Buyers*** [eBay]
(Photo: rightonbro )

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