Monday, February 06, 2006

AuctionBytes Payment Survey

The results are in from AuctionBytes' online-payment survey of readers conducted in January. While the survey shows PayPal is used by an overwhelming majority of respondents (over 94%), a look at the comments fields reveals that some sellers do have areas of concerns with the service, including the following:

  • PayPal fees
  • Levels of customer service at PayPal
  • Concern over a lack of competition, with some mentions of Google as a possible alternative
  • Security and spoof emails
  • Dissatisfaction with PayPal's dispute resolution
  • PayPal accessibility issues
  • A need for a way to facilitate international payments

It's important to note that some respondents expressed satisfaction with PayPal fees and service. A few wrote comments along the lines of this comment:

"Overall, the (PayPal) site works fine most of the time. But those times when it doesn't - it is a frustrating mess."

PayPal was the number one form of payment accepted in online auctions, storefronts and retail websites by respondents, followed closely by postal money orders and money orders, which were followed by checks. The reason for PayPal's success may be answered in a subsequent survey question: only 26 percent of respondents have a credit card merchant account, 74 percent do not. (PayPal allows individuals and businesses to accept credit cards without having to have a credit card merchant account.)

Slightly more than half of the respondents had accepted BidPay in their online listings before it ceased operations on December 31, 2005, and 61 percent said the closing would not affect their sales.

Respondents were asked, on average, what percentage of their online transactions do a list of payment services comprise, for a total of 100 percent. The average response indicated that PayPal comprised 79 percent of all transaction payments, credit cards comprised 23 percent, and checks comprised 12 percent.

With regard to the level of satisfaction with the current choice of payment services, 185 respondents (39%) said they were satisfied with the number of payment services available and 236 respondents (almost 50%) said that a greater choice of payment services was needed.

AuctionBytes invited its newsletter subscribers to take the survey in January. Respondents reported selling more items in categories that are considered "collectibles" as opposed to "practicals." Thirty-six percent of respondents said they sell between 1 - 10 items/week on average, and 23 percent sell between 11 - 25 items/week; 18 percent sell between 26 - 50.

There was a diverse selection of secondary online payment methods, including some services that we were not familiar with. In the "best of the rest" category, MoneyBookers, Ikobo, ProPay, Nochex and Ikobo received the highest number of votes (all less than 3%). We would like to hear more about these and other payment services. Share your experiences in this discussion forum thread that we've started on the AuctionBytes site:

The raw survey results can be found here:

About the author:

Ina Steiner is Editor of and author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). She has a background in marketing and research in the high-tech and publishing fields. If you have story ideas, comments or questions, send them to

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