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You can no longer use PayPal on eBay - here's why

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(Image credit: Shutterstock.com / Ascannio)

eBay has updated its terms of use, with new rules meaning that sellers will be paid directly by the company instead of through PayPal

The move, which is effective immediately for many account holders, means that eBay buyers can still make purchases using PayPal, but sellers will bypass the online payments company and get funds paid straight into their bank accounts.

However, the move does not appear to have gone down well with many eBay sellers, with some are threatening to boycott the service or stop using it altogether.

The core change to eBay’s payment processing journey once a sale has been made is that PayPal fees will no longer be added to the transaction process. 

However, eBay has at the same time increased its fees, although the company says that the majority of people will still pay the same as they did before the move - and in some cases, could actually pay less.

eBay direct debit

Several eBay forums feature posts from sellers who are clearly unhappy about the revised terms of use. Many disagree with the need to give eBay direct debit access to their personal bank accounts. However, users cannot opt out of the new ‘managed payments’ system and sellers could face having their transactional power curbed or see eBay listings removed if they’re not compliant with the change of rules.

In terms of cost to users, the new system is set at 12.8% of the final amount, including delivery plus $0.30 for US users (30p in the UK). This is compared to 10% previously for the eBay fee, plus PayPal’s fees and $0.30 (30p). 

While eBay suggests the rise is nominal it also points out about the wider range of payment options that the new system will offer. Buyers will have the choice of using credit and debit cards, Apple Pay, Google Pay as well as PayPal and PayPal Credit too. Less pleasing to customers is the way that payments will now take two working days, compared to previously when PayPal transfers would usually happen on the same day.

And, while the system is mandatory it might not affect everyone at the same time following the June 1 change. Some sellers might find they get a message from eBay advising of the changes, which could happen over the new few weeks or even months. 

Part of the issue sellers have with the new compulsory direct debit system is that it could leave them open to refunds being automatically issued to buyers if there are any disputes during a transaction. However, eBay says that customers will be told in advance of how much is being taken out. Similarly, any fraudulent payments should be refunded.

eBay insists that the move is to deliver a simpler and more efficient service, which will offer a higher level of convenience. It also believes the decision will ultimately provide a greater degree of payment options for buyers, which could be good for business. 

It’s the first major change to a nigh-on twenty-year affiliation that saw PayPal become a separate entity from eBay back in 2015.

Rob Clymo

Rob Clymo is a Freelance writer for digital and print, specialising in tech, gadgets, automotive and innovation but also covering filmmaking and travel.