eBay 2008 Annual Report Download - page 14

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promoting their listings through our “Best Match” search algorithm. We are also in the process of modifying the
payment process to enhance speed and reliability.
eBay strives to offer a wide variety of inventory ranging from new in-season through end-of-life products, from
different types of sellers, in a broad variety of categories, with a favorable buyer experience and a choice between
auctions and fixed price formats, all in one place. We believe that, if successful, these measures will increase the
number of items sold on our sites.
Another element of our growth strategy is to build adjacent Marketplaces businesses, such as our classified
platforms and StubHub, which offer new formats and new monetization models, as well as opportunities for growth
beyond our core businesses.
Payments
Our payments segment is comprised of online payment solutions — PayPal (which enables individuals and
businesses to securely, easily and quickly send and receive payments online in approximately 190 markets
worldwide) and Bill Me Later (which we acquired in November 2008 and which enables online U.S. merchants to
offer, and U.S. consumers to obtain, transactional credit at the point of sale). Our Payments network builds upon the
existing financial infrastructure to create a global, real-time payment solution.
Payments Value Proposition
We believe our payment solutions make online commerce more efficient compared to traditional payment
alternatives such as checks, money orders and credit cards via merchant accounts. These traditional payment
alternatives present various obstacles to the online commerce experience, including lengthy processing time,
inconvenience and high costs. Providing a more efficient and effective payment alternative for users is essential to
creating a faster, easier and safer online commerce experience. Our online payment solutions allow customers to
send and receive funds securely, easily and quickly, and facilitate transactional credit for merchants and consumers.
Payments Solution
Buyer Value Proposition
PayPal enables buyers to pay merchants without sharing sensitive financial information. To make payments,
buyers need to disclose only their email addresses to recipients. Buyers also benefit from PayPal’s Buyer Protection
Program, which reimburses buyers using PayPal with respect to most purchases made on eBay.com. When using
Bill Me Later to obtain transactional credit, buyers need to provide only their name, address, birth date and the last
four digits of their social security number. Many buyers wary of disclosing financial information online find the
limited amount of information they are required to provide attractive. Bill Me Later also offers U.S. buyers an
opportunity to defer payments; under some promotional arrangements with select merchants, interest on such
payments can be deferred for as long as three to six months.
Seller Value Proposition
PayPal offers online merchants an all-in-one payment processing solution that is less expensive than most
credit card merchant accounts, offers industry-leading fraud prevention, and enables merchants to conduct business
with approximately 68.6 million PayPal registered active accounts in approximately 190 markets. Many of these
active accounts prefer to use PayPal over other payment methods, which may help merchants to increase sales
volume. PayPal also offers merchants the ability to maintain a direct relationship with their customers. In addition,
PayPal also offers a payment gateway service that provides merchants who already have a credit card merchant
account with a secure connection from their online store to their internet merchant account and their payment
processing network.
A merchant can generally open a PayPal account and begin accepting credit card payments within a few minutes.
Most merchants are approved instantly for a PayPal account, and do not need to provide a personal guaranty, acquire
any specialized hardware, prepare an application, contact a payment gateway or securely store customer financial
information that is maintained by PayPal instead of the merchant. Furthermore, PayPal charges lower transaction fees
than most U.S. merchant accounts, and charges no setup fees and few or no recurring monthly fees.
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