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PayPal Updates Payment Hold Policy For eBay Split

The separation of two large corporations such as PayPal and eBay is no straightforward task, but the companies are beginning to iron out the details of what PayPal’s incoming independence means for customers of the once integrated companies.

In an announcement, PayPal told its U.K. customers that it would continue to place holds on their accounts when customers dispute a transaction through eBay’s resolution mechanism.

“We need to make some of these changes because eBay and PayPal soon will no longer be part of the same group of companies and will operate as unrelated [organizations],” PayPal wrote. “However, eBay and PayPal will continue to partner together to provide and further enhance the great experience you’ve always had when using PayPal to send or receive payments on eBay.”

PayPal’s policy on temporary holds and payments made to eBay is complex at the moment, reports note. PayPal revealed that it will treat payment authorizations made to eBay as canceled, meaning PayPal will not complete the payment. If PayPal decides that the claim would have been ruled in the favor of the individual that filed the claim, PayPal will re-file the claim with PayPal. All claims filed under eBay, however, will not be covered by PayPal’s Seller Protection Program.

Among other updates, PayPal said that it would no longer require compliance with both PayPal’s Acceptable Use Policy as well as eBay’s own rules related to prohibited and restricted items as listed by eBay. Instead, PayPal’s Acceptable Use Policy will be changed to specify restrictions on the use of PayPal for payments, which will include a ban on bribery, corruption and gambling.

These changes will take effect July 1 of this year.

EBay announced last September that it planned to spin off PayPal and have the two firms run independently. Earlier this month, the companies revealed new details of their split in the form of a filing with the Securities and Exchange Commission. Among the highlights of the filing included an agreement, to last for five years, that allows eBay to seek partnerships with other payment processors while PayPal can pursue its own partnerships with other marketplaces.


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