PayPal is no friend to us!James Coney, Money Mail
1 March 2006
READERS of the Daily Mail and This is Money are furious with eBay payment system PayPal. Two weeks ago we highlighted serious flaws with Paypal. Since then we have been flooded with complaints from buyers and sellers whose transactions have gone wrong and are at their wit's end trying to get their money back.
MILLIONS of us are buying and selling goods on eBay. Almost 70,000 eBay sellers in the UK make a quarter of their income from the online auction house.
Most transactions on eBay are made through the preferred method of payment, PayPal, the company bought by eBay for £83m in 2002. There are more than 10m accounts in the UK alone and in the last four months of 2005 it made a profit of £173m.
To use it, you set up an account with PayPal online, entering your name, address and bank or credit card details. When you buy on eBay, you transfer funds into your PayPal account and it passes the money on to the seller.
The service is free for buyers, but PayPal takes commission of 20p plus 3.4% of the sale price of anything up to £1,500 from the seller. Sellers claim the system is biased towards buyers and they end up out of pocket when things go wrong.