Back when eBay first launched, all the way back in 1995, buyers could pay for the items from auctions they had won using a cheque, a money order and, if the seller accepted them (which was rare) a credit card. Back in 1995 PayPal did not even exist yet. Sellers had to spend their time opening mail, cashing cheques, matching cheques to auctions, waiting for the cheques to clear. Life, for an eBay seller back in the early days was not easy!
Once Paypal launched in 1998 eBay was quick to encourage its users to sign up for the new service and use it to pay for auctions while also encouraging sellers to accept it. They liked the functionality of PayPal so much that they bought it in 2002 for $1.5 billion.
Twelve years later it is rare to click on an auction or visit an eBay store which does not list Paypal as the preferred method of payment. In fact, for eBay.co.uk sellers, accepting Paypal as a form of payment is mandatory. What you may not know though is that if you intend to sell items in certain eBay categories Paypal is the only form of payment you are allowed to accept. No credit cards, no cheques or money orders and certainly no cash (which was always a crazy idea in the first place, however “well concealed” it was)
As of 2011, the following categories are considered “PayPal only” in every country that eBay operates in:
Video Games: Consoles
Consumer Electronics: MP3 Players
Wholesale Lots: Mobile and Home Phones
Business, Office and Industrial: Industrial Supply/MRO
Why the PayPal mandate? It is actually designed to protect both buyers and sellers. If a buyer drops £200 on an iPod and does not receive it, PayPal offers them the chance to get their money back. And although many sellers complain about PayPal fees, it is still the safest option for them too, especially since in many cases PayPal can help sellers hold on to their money if a customer tries to get a chargeback for no particularly good reason (Do eBay Sellers Really Have to Take PayPal? Do eBay Sellers Really Have to Take PayPal a favourite ploy of scammers a few years ago).