eBay 2005 Annual Report Download - page 13

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PayPal Money Market Fund. This Money Market Fund, which is invested in a portfolio managed by Barclays
Global Fund Advisors, bore a current compound annual yield of 4.22% as of December 31, 2005.
Verification of PayPal's Account Holders
To fund payments from their bank accounts in the United States, senders must first become verified
PayPal users. The primary method for verification is our Random Deposit technique. Under this technique,
PayPal makes two deposits ranging from 1 to 99 cents to the user's bank account. To verify ownership of the
account, the user then enters the two amounts as a four-digit code at the PayPal website. In addition to
allowing funding through bank accounts, verification also removes some spending limits on users' accounts
and gives them reputational advantages when transacting with other members of the PayPal community.
Withdrawing Money
Each account holder in the U.S. and, as of December 31, 2005, in 26 other markets, may withdraw
money from their PayPal account through an electronic fund transfer to his or her bank account or, in the
U.S., by a mailed check from PayPal. Automated Clearing House, or ACH, withdrawals may take three to
five business days to arrive in the account holder's bank account, depending on the bank. However, everyone
who can receive funds can withdraw to a U.S. bank account. Mailed checks may take one to two weeks to
arrive, and PayPal charges $1.50 per check. Qualifying PayPal business users in the U.S. can receive a PayPal
ATM/debit card, which provides instant liquidity to their PayPal account balances. ATM/debit cardholders
can withdraw cash, for a $1.00 fee per transaction, from any ATM connected to the Cirrus or Maestro
networks and can make purchases at any merchant accepting MasterCard.
PayPal's Trust and Safety Programs
We have developed a number of PayPal trust and safety programs, including PayPal's Seller Protection
Policy, Buyer Protection Policy and PayPal's Money Back Guarantee. These programs provide additional
protection to certain users who pay, or receive payment, for their transactions through PayPal. In addition, our
Fraud Investigation Team focuses on identifying and preventing fraud before it occurs, detecting fraud in
process, mitigating loss if fraud does occur and delivering information to law enforcement around the world to
better combat online fraud.
Seller Protection Policy: PayPal's Seller Protection Policy covers sellers for up to $5,000 per year on
certain reversed transactions. In order to be eligible for 100% protection, PayPal sellers must adhere to certain
steps which include: having a verified Business or Premier account; shipping goods, in a timely manner, to an
eligible address; retaining proof of shipping that is traceable online and, for items with a value of over $250,
requiring a signature receipt; accepting the entire payment in a single transaction; and responding to all PayPal
inquiries in a timely manner.
Buyer Protection Policy: With PayPal Buyer Protection, qualified purchases on eBay are eligible for up
to $1,000 coverage at no cost (with different terms for transactions denominated in other currencies). This
program covers qualified purchases that the buyer has paid for, and either has never received, or has received
but were significantly different than described in the listing. When a buyer files a claim through PayPal Buyer
Protection, we work with both the buyer and seller to gather the details of the transaction. We investigate the
facts of the case and make an effort to come to a fair conclusion. For a purchase to be eligible for this
coverage, the item purchased must be a physical item, PayPal must be used to pay for the item, and the buyer
must use the seller's e-mail address associated with the listing. Claims must be filed within 45 days of PayPal
payment, and buyers are limited to three PayPal Buyer Protection refunds per year.
Communications
We added the Communications business upon our acquisition of Skype in October 2005. Skype is a
Luxembourg-based company that was established in 2003. Skype provides software that, among other things,
enables free VoIP calls between Skype users online. Skype's premium offerings, which are currently Skype's
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