eBay 2004 Annual Report Download - page 12

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We intend to continue to market the PayPal product to small and medium-sized businesses and large
merchants, and enable them to add PayPal as a ""payment mark'' on their websites. These merchants will oÅer
PayPal, alongside other payment methods, such as credit cards, checks and money orders.
Finally, we will continue to identify transactions and markets not served adequately by existing payment
systems and seek to develop product features that improve upon those legacy systems. For example, during the
past year, we integrated PayPal with Apple iTunes and Napster.
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 certain
additional protection to eBay 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 on certain
fraudulent transactions. In order to be eligible for 100% protection, PayPal sellers must adhere to certain steps
which include: having a veriÑed Business or Premier account; shipping goods, in a timely manner, to an
eligible address; retaining proof of shipping which is trackable online and, for items with a value of over $250,
requiring a signature receipt; accepting entire payment in a single transaction; and, responding to all PayPal
inquiries in a timely manner.
Buyer Protection Policy: With PayPal Buyer Protection, qualiÑed purchases are eligible for up to $1,000
(or for up to 500 for British pound-denominated transactions) coverage at no cost. This program covers
qualiÑed purchases that the buyer has paid for, and either has never received, or has received but where
signiÑcantly diÅerent than described in the listing. When a buyer Ñles 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 eÅort to come to a fair conclusion. For a purchase to be eligible for this
coverage, the PayPal Buyer Protection icon must be displayed in the Seller Information box on the eBay
listing, 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 Ñled within 45 days of PayPal
payment, and buyers are limited to three PayPal Buyer Protection refunds per year.
Money Back Guarantee: When a payment is made on the PayPal website, users are often given the
option to buy a Money Back Guarantee to protect the purchase of physical goods. If a Money Back Guarantee
is purchased, buyers will have the option to return the merchandise to us in exchange for a reimbursement
(not including the guarantee fee), provided that they Ñle a complete reimbursement request within 45 days of
payment. This program is only oÅered for transactions involving tangible goods of less than $1,000 with pre-
qualiÑed sellers. In addition, we may take additional criteria into account in deciding whether to oÅer the
Money Back Guarantee on a particular transaction.
Technology
eBay Platform
The eBay platform is composed of a scalable transaction processing system, consumer user interface, and
externally accessible Application Programming Interface, or API, for third-party integrations. The scalable
system is primarily based on internally developed proprietary software, but also includes selected vendor
components. The eBay platform supports the full selling and buying processes, including initial registration for
the service, placing bids and managing outbids, listing items for sale, and auction close. The eBay platform
also manages various notiÑcations for sellers and buyers, including daily status updates, bid and outbid notices,
registration conÑrmations, account change notices, billing notices, and end-of-auction notices. The platform
maintains user registration information, billing accounts, current item listings and historical listings. All
information is regularly archived for record-keeping and analysis purposes. The platform regularly updates a
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