The problem is the fact Ebay owns Paypal andthat Paypal is not a bank so they can operate by their own rules. The money you have in your Paypal account can be frozen and taken from your account for some very flimsy and in my mind, fraudulent reasons.
A co-worker of mine sold tickets to a Pittsburgh Penguins playoff game on Ebay, the buyer made payment via Paypal the day before the game. The buyer requested to have the tickets emailed to him since the game was the next day, which can easily be done as a season ticket holder by electronically forwarding the tickets. My co-worker forwarded the tickets via email. A week later... a week after the game, the buyer filed a dispute with Paypal that he never received the tickets. Paypal and Ebay asked for proof of shipment or delivery. Only they do not accept emails as proof of shipment or delivery! As a result they sided with the buyer and took took $750 out of my co-worker's paypal account.
I don't have a paypal account, I process all my ebay purchases through Paypal but I refuse to have an account with them. If and when I ever want to sell on Ebay there are alternative ways to accept credit card payments on your auctions. Merchantinc.com is one such service. Their transfer fees and percentages are cheaper than Paypal with only I think an $8/month member fee. And this is a merchant account, which means that your funds from sales get deposited directly into your bank account and NOT a Paypal type account. With a merchant account, your funds are protected by federal banking regulations "Since your merchant account is provided by a real US bank". Unfortunately, PayPal is not considered a bank in the United States, and therefore it does not have to adhere to federal banking guidelines.
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