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During eBay Live! 2008 in Chicago, eBay officially announced that they are planning to phase out the current eBay third-party checkout program sometime in mid-2009.

AuctionBlox and other eBay providers utilize the third-party checkout feature (also known as eBay checkout redirect) to direct eBay buyers to a custom checkout flow. Our merchants love this feature because it streamlines their sales process, and requires no manual intervention. That’s a necessity for merchants doing hundreds and even thousands of orders a day.

The phase-out of eBay third-party checkout is being driven within eBay by the “eBay Trust and Safety” team. Some of the reasons provided for justifying the phase-out of the program include:

1. Lack of trust by buyers in “off-eBay” checkout
2. Lack of consistency in the checkout process among eBay providers
3. Higher than anticipated failures during the checkout process

eBay does have some valid points. The checkout process does vary greatly from provider to provider. I find that somewhat odd actually considering that there are well-established processes for shopping cart checkout.

Additionally, we do get reports of buyers that will not use third-party checkout. However, this is far from the norm. In general, this population of user is less than 1% of all completed transactions. Not surprising, these are always PayPal users. However, there still exists a large community of people that don’t want (or can’t) pay via PayPal. Our merchants generally provide many different payment methods in order to cater to the majority of users.

In general, the AuctionBlox checkout system is a pleasant experience for eBay buyers. Our system does not require manual re-entry of information such as the billing and shipping address. As a result, the checkout process is as simple as paying at PayPal. There are so many features in our checkout system that is beyond the scope of features in the current eBay checkout. Our system allows for promotions with store coupons, combined checkout for multiple items, combined shipping discounts, cross-selling of related items, …

I want to stress that eBay third-party checkout is not yet dead. We’re working with eBay to design a new checkout system that will keep most of our existing features intact. However, this is a tough process. It’s clear that the design process has just begun at eBay. It’s going to be a long road ahead for eBay and third party providers. Whether eBay will accomplish the goal of phasing out the program and over what time-line remains to be seen.

Like most things in life, hopefully we’ll end up somewhere in the middle. Allow eBay checkout for those buyers that want it, and third-party checkout for those buyers that have special requirements such as paying via credit card or wire transfer.

In fact, AuctionBlox just introduced a feature that allows eBay checkout via PayPal.com without using eBay third party checkout. PayPal orders are imported into the system and look just like any other order in the AuctionBlox system. Given this feature, we have no direct dependence on eBay third party checkout.

However, what would be ideal is for eBay to allow the buyer to decide their checkout path. For PayPal orders, let the buyer proceed to PayPal.com and pay without leaving eBay, but for other payment methods let the buyer proceed to the merchant shopping cart to pay using eBay third party checkout.  That way, everyone wins!