eBay 2009 Annual Report Download - page 18

PayPal’s Trust and Safety Programs
We have developed a number of PayPal trust and safety programs, including PayPal’s Seller Protection and
Buyer Protection Programs. These programs provide additional protection to certain account holders who pay or
receive payment for their transactions through PayPal on eBay and off eBay as well as in certain geographies.
PayPal’s Seller Protection Program covers sellers who follow specific shipping and handling practices against
claims that a transaction was not authorized by the buyer or that the item was not received. PayPal’s Buyer
Protection Program reimburses the buyer for qualified purchases off eBay.com in certain key geographies if the
buyer does not receive the item. In some eBay localized markets, protection for buyers is limited to a maximum
amount per transaction. In addition, our Risk Management and Fraud Investigation Teams focus 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.
Bill Me Later Transactional Payment Solution
Bill Me Later offers U.S. online consumers a way to obtain instant credit at the point of transaction through
Bill Me Later’s relationship with CIT Bank. Bill Me Later is not a chartered financial institution, and relies on
CIT Bank to extend credit as the lender to Bill Me Later customers utilizing the Bill Me Later service. When a
consumer makes a purchase using the Bill Me Later service, CIT Bank funds the consumer loan at the point of
sale and advances funds to the merchant. Bill Me Later subsequently purchases the receivable related to the
consumer loan extended by CIT Bank. Bill Me Later accounts are most commonly opened on a U.S. merchant
site offering Bill Me Later as a payment method, but can also be opened via a qualified PayPal account or at the
Bill Me Later website. A buyer enters his or her birth date and the last four digits of his or her social security
number and, subject to credit approval by CIT Bank, Bill Me Later opens an account for the buyer. This account
can be used on any other U.S. merchant site offering the Bill Me Later payment option or as a funding source in a
qualified PayPal account on certain merchants in the U.S. who accept PayPal. Once established, customers can
then manage their accounts online with access to their transaction history and monthly statements and can elect
to establish recurring electronic monthly payments.
Bill Me Later earns revenues in several ways:
• Bill Me Later earns interest on the outstanding customer balances;
• Bill Me Later charges fees for late payments; and
• Bill Me Later earns fees from merchants who use the Bill Me Later service.
Bill Me Later’s alternative payment solution is designed to help retailers with an online presence attract,
satisfy and retain customers at the point of sale. Through this offering, we believe that customers can make
successful real-time retailing decisions, and that online retailers of all sizes can develop an effective payments
strategy designed to increase sales and satisfaction by providing consumers with secure, convenient and flexible
payment choices.
Payments Growth Strategy
We seek to become the online payment solution of choice around the world through our focus on
simplifying and improving the customer experience, striving to be the most secure method of payment on the
Internet, enhancing our product offering for our merchants and utilizing multiple sales channels. To establish
PayPal and Bill Me Later as the online payment solutions of choice, we intend to continue focusing on increased
user adoption of PayPal on our Marketplaces platforms, continued expansion of PayPal’s Merchant Services
business and our financial products business, expanding the offerings of Bill Me Later, including as a funding
source for PayPal accounts and increasing adoption of Bill Me Later on merchant sites, including the eBay
Marketplace.
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