Did EBay Germany get cold feet?

Posted by on Jun 6, 2012 in Marketplace, Strategy

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By Christo Volschenk
Out of the blue EBay Germany yesterday informed private and professional EBay sellers that the introduction of the new payment system had been postponed to somewhere in 2013. The reason given for the postponement was so “unusual”, that one had to wonder whether EBay Germany might have gotten cold feet, and wants out.

Three observations fueled that thought:

1. In yesterday’s announcement (here in German) EBay “defended” its decision to go for the new payment system in a way which reminded of Shakespeare’s line in Hamlet, “The lady doth protest too much…”, thereby conveying a message opposite from the intended, namely that EBay might not be so sure about the chosen way itself!

The background in a nutshell: Until now, EBay has been an online platform bringing sellers and buyers together. It doesn’t get involved in transactions – buyers pay sellers and sellers dispatch goods to buyers. All without EBay’s intervention. The new payment system, announced in February, for implementation on Germany’s and Austria’s platforms later this year, will channel the money to flow through EBay’s bank account – buyers will pay EBay and EBay will pay sellers once the goods had been dispatched. (For the full background go to our reports here and here.

The proposed new payment system has been criticized heavily by professional sellers since its announcement in February for the extra costs (direct and indirect) it will bring them.

2. One would think EBay Germany had double-checked all legal, technical, cost-related and other issues related to the switch, before announcing it. But, now it transpired, and this must be embarrassing to Bob van Dijk, EBay Germany’s new CEO, that a banking license is missing.

A license is needed in Luxembourg, where the EBay subsidiary designated to administer the flow of an estimated €5 billion annually in German transactions, has its seat. This license will now be applied for and since it’s not clear how long it’ll take before EBay has the license, the introduction of the new system had to be postponed indefinitely.

3. The cherry on top: EBay also canned the idea as far as it’s already in use by new sellers. In other words, it called an end to the test. (Background: Sellers who have registered since August 2011, have done so as guinea pigs of the new system.) These sellers will now also transfer to the “old system” and then – when the license had been obtained – transfer back to the new system.

Cumbersome. Or, another sign that EBay Germany will drop all plans sometime in future?

Written by Christo Volschenk

Christo Volschenk joined the AIM Group as a researcher and writer in 2007. He brings more than 28 years of experience in business journalism to the team, the last 16 years focused on e-commerce. In addition to working closely with the AIM Group, Christo is also a freelance journalist and online editor. Before branching out on his own, he spent 15 years with Naspers in South Africa where he worked as journalist, economics editor and online project manager. He now spends most his day supporting the consultants of AIM Group as researcher and writer from an office in Stuttgart, Germany. His editorial focus is Europe, Middle East and Africa.