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Introducing the New eBay
"Buyer's
Credit" Program |
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Introducing the New eBay "Buyer's Credit"
Program.
In an effort to compete with more 'traditional'
shops, eBay has started to offer finance agreements though
PayPal for expensive items. This means that, if the seller
decides to offer it, you can now spread the cost of an item
into affordable monthly payments.
This is good for buyers, good for sellers, and
good for eBay. Buyers can get the kind of credit agreements
they're used to in shops. Sellers can make their items more
attractive to buyers who might not have all the money then and
there, but eBay still pays the sellers upfront - they don't
have to wait to be paid each month or anything like that.
Buyers make their monthly payments to PayPal's credit provider
instead.
The APR of the Buyer's Credit program is
currently 12.9%. You can pay back $999 or more over 12 months,
or $1,999 or more over 24 months. There are also interest-free
options for purchases of $199 or more over 3, 6 or 12
months.
The reason why some of these credit offers sound
better than others is that it is up to the seller to decide
how good the credit offer should be and pay extra to PayPal to
offer it. To give their buyer the best promotion, for example,
of no interest for twelve months, the seller must pay 3.75% of
the item's cost to PayPal.
Basically, this means that sellers pay less when
the buyers pay interest, and sellers pay the cost of the
interest on the interest-free offers. PayPal makes its
interest either way, buyers are happy to get credit, and
sellers are happy to sell more.
Can I Get This Credit?
On items over $199, Buyer's Credit is now being
automatically offered to buyers in the USA only. Just click
the link when you buy something for more than $199 and you
will be taken through the application process, which includes
a 30-second check on your credit history. Then you just go
through the buying process as normal, and you get your item
before you've paid a penny.
Why are eBay Offering This?
eBay say they want to "level the playing field",
to allow eBay businesses to compete with the big chain stores,
and they also want to promote PayPal as a payment method.
Relatively few buyers can afford the more expensive items on
eBay all at once, and so the introduction of Buyer's Credit
seems likely to significantly increase prices and sales at the
higher end of the market.
It is worth noting that you can use Buyer's
Credit anywhere PayPal is accepted, not just on eBay. PayPal
say it's "like a credit card - minus the card!" You don't get
a card number - you can pay with credit with just your email
address and password.
The only thing left to do now, then, is find the
best deal for that really special item - the expensive thing
you've been wanting for ages but could never afford. But how
can you be sure you're getting the best price? Try our tips
and tricks for eBay searching, in the next
email.
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