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Ebay Paypal Merger Term Paper

eBay PayPal Merger Growth in business comes from the joining of synergy to produce savings and necessarily growth, which lead to better profits. EBay is one of the greatest creations of the Internet in buying and selling, and it seems to be a continuously growing operation. The approach to the potential user is extremely friendly; the site gives good quality products which builds up the faith of the customers about the site, and there is regularly an interaction between the buyers and the sellers which also helps to a large extent in advertising the site. The user pays only a small fee for listing the product to be sold on the site and then a fee to be paid on completion of sales. It is possible to sell practically anything and everything on the site, from things like old cars to tickets for baseball games. The prices that can be realized depend on the consumer demand for the product. The objective of the site is to meet the miscellaneous requirements of the consumers and this is reflected in the fact that there are over 100 million items listed on the site at any given time. On the other side, pay Pal is a funding organization for the sales and purchase on the net through EBay. It was not a part of EBay, and the financial transactions could be done anywhere after the sales and purchase was completed at EBay. Now it is expected that both will be completed at EBay through the tie up with Pay Pal. EBay and Pay Pal have always been complementary operations, and the merger can only help both sites to grow.

There are many reasons that can be ascribed as contributing to the success of EBay. They have no warehouses or inventory adding to their expenses for storing the items. Everything that they sell exists only as entries on the Internet. Physically this may mean a certain amount of computer storage capacity. The operations of their computers are based on the latest programming. This enables them to track down every auction that is conducted. They check all the activity that goes on in the Internet regarding auctions and trading. This puts them in touch with all the buyers and sellers. This knowledge is used by them later in buying and selling of the goods that are given to them for selling. As mentioned earlier, the first step for anybody trying to sell through EBay is to fill out the readymade forms that are available on the computer. The forms are also available for helping potential buyers locate whatever they may want to buy. There are no fixed terms that everybody has to accept. The first step is for the auction to end. Then the buyer and the seller decide on the settlement of the deal regarding factors like payment terms, shipping method and location for shipping. All these records have to be stored on the site of EBay. This demonstrates to other buyers and sellers that they are reliable parties. The availability of this information on the site also helps EBay through more purchases and sales. (What is this hot Dot-Com business?)

Compared to this rather creative idea of creating a website for auction, Pay Pal is only a payment mechanism. They do not have as good a reputation. Once a person accepts the Terms of Service offered by Pay Pal, the person automatically waives all his rights under the credit card consumer protection laws. In the case of credit cards, the customer is allowed to charge back anything that he is not satisfied with, but this facility is not available under Pay Pal. The legality of this stance by Pay Pal is unknown, but this is imposed by Pay Pal, as per the statements made today. It has been claimed that Pay Pal does not disclose their telephone numbers, and only give out form e-mails for their clients to contact them. It has been stated by their representatives that they intentionally hide their phone numbers. To find out the number, the customer first has to click on the help at the top of their webpage, and then on "contact us" at the bottom left of the page that will appear. Then another page will appear and the customer has to click on "Customer support enquiries" near the middle of the page that appears. This leads one on to another page and there is a section on "Service Center" in the bottom...

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The non-toll free number that they provide is noted there. Considering the fact that in today's world people like things done rather fast, this is a rather long-drawn out procedure. (Welcome to NoPayPal)
Apart from not informing people about their own telephone numbers, they also do not disclose their own service conditions. They also do not mention to the potential users that Pay Pal does not carry any of the risks and all the risks are to be borne by the potential customer. This has led to situations in the past where Pay Pal has withdrawn all the money available in the customer's accounts. This is not only the credit card accounts that we are referring to, but also the savings or other accounts. Due to the signed agreement, the customers cannot get any benefit from any appeal. They also do not respond to any action of customers they feel have taken any questionable action. They are not normally interested in the viewpoint held by the customer. They also do not provide any details of the investigation they have conducted. They just send an e-mail which says "Thank you for contacting PayPal. We apologize for the delay in responding to your service request. After review, the decision has been made to keep your account locked. This decision cannot be appealed. (Welcome to NoPayPal)

If you have any further questions, please reply to this email." There is normally no further correspondence that is encouraged by Pay Pal. You may get some more e-mails saying basically the same thing. By Pay Pal, you are held responsible for someone paying you with a doubtful credit card. Pay Pal have themselves said that they will treat the account then as one with criminal behavior. They will also confiscate any money that is then lying in the account. When the customer does not agree with the charge as mentioned by Pay Pal, they do the same thing to the account. The cost of funding by Pay Pal is very high at 2.9% plus the $.35 per transaction. This is high compared to the charges by banks of around $0.05 to $0.12 per check that you deal through them. Even the charges for a money order is around $o.50 to $1. The charges for decent credit cards are about 2.3%. The total charges by Pay Pal are quite high and come to about $3.00 per $10. Earlier, they used to be very cheap, bit now they are pretty expensive. (Welcome to NoPayPal)

The biggest factor of Pay Pal is that they have the same charges for non-credit financing in the same manner as they have for credit cards. A fee for financing credit card deals is understood as the card itself will charge the fees to Pay Pal. On top of that there are often a lot of frauds in deals associated with credit cards. The problem is that when deals are made from one Pay Pal account to another Pay Pal account. Then the money exists, or is just transferred from one account to another, and there is no question of collecting funds from any credit card. Yet, the fees charged by Pay Pal is the same. These sorts of transactions make a lot of money for Pay Pal, when it is just a transfer entry in the computer system. This is just making a lot of money without doing any service. (Welcome to NoPayPal)

EBay on the other hand is a market place based on the Web. Here the buyers and sellers view items together in the virtual reality of the Web. They browse, buy and sell different items. The Pay Pal service just permits the buyers with e-mail identities to send and receive the online payments from the parties who are interested in these items. This adds to the security, convenience and cost effectiveness of the site. This is an online location for trading and because of the nature of the medium it permits continuous trading online from all over the world. This is a medium which is pre-arranged in a very topical manner. This makes it easier for the people to locate whatever they want to check on. It only requires a certain amount of human intuition to be able to use the medium. It should be remembered that Internet is available 24 hours a day for all the 7 days a week. Throughout the week it is only closed for a period of 2 hours for…

Sources used in this document:
References

1. What is this hot Dot-Com business? Retrieved at http://oak.cats.ohiou.edu/~jc128800/esp/memo1.htm

2. "Welcome to No Pay Pal" Retrieved at http://www.paypalsucks.com/

3. "Pay Pal shareholders approve eBay merger" Oct. 03, 2002

Retrieved at http://news.com.com/2100-1017_3-954719.html
4. "Pay Pal sued as eBay merger vote approaches" Sep. 13, 2002 Retrieved at http://news.com.com/2100-1017-941964.html
5. "Pay Pal has set a date for shareholders to weigh in on its proposed acquisition by eBay" August 21, 2002. Retrieved at http://www.siliconvalley.com/mld/siliconvalley/4068268.htm. n
Retrieved at http://www.bayarea.com/mld/bayarea/4205226.htm
Retrieved at http://www.kentucky.com/mld/kentucky/2003/10/09/business/7011571.htm
8. "What Is PayPal Really Worth to eBay?" (n.d) Retrieved at http://www.ectnews.com/perl/story/18551.html
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