Payment Methods for Consumer-to-Consumer Online Transactions

Participants in eBay online auctions and other types of online transactions involving private individuals increasingly use PayPal or online payment services that enable individuals to make credit card payments to one another, generally with the payment service acting as an intermediary. Relatively little attention has been paid to the risks and potential liabilities that such services involve for buyers and sellers. This Article compares online payment systems and similar intermediary services to traditional payment mechanisms in that context. The Article concludes that making chargeback rights available for credit card-based online payments would help balance transaction risks between buyers and sellers