eBay considers PayPal requirement, invites Australians antitrust scrutiny

by Brad Linder May 11th 2008

This is a story we've kind of been expecting to bring you since the day eBay bought PayPal. The company is thinking of requiring members to use PayPal to complete transactions -- in Australia anyway.

Right now you can arrange payments by check, money order, PayPal, or other methods. But next month eBay will change that policy and require Australian shoppers to pay via PayPal. And that's prompted antitrust complaints from Australian banks, which arrange money transfers for eBay auctions. Some sellers also complain that PayPal fees are higher than bank transfer fees, which means the new rule could cost them money.

Honestly, we don't know many people who use eBay and don't use PayPal. It's easy and convenient. And eBay claims it does a better job of preventing fraud than other payment services. But let's not forget that eBay gets a cut every time you pay with PayPal. And that's on top of the commission eBay already takes for items sold on the site. The company claims any additional income will be offset by increased investment in buyer protection measures.

There are currently no plans to go PayPal-only in the US and other markets. But eBay could be using Australia as a test case before expanding the policy. Australian regulators haven't yet issued a final ruling on the antitrust implications of the policy.

Tags: australia, ebay, paypa

Reader Comments (Page 1 of 1)

rodan32 said 1:28PM on 5-11-2008

As a former employee of eBay, I see, to remember that Australia was sometimes used as a test market for North America and Europe. They're a small enough segment of eBay, but they're culturally very much like the US, Canada, and much of Europe. It's been a couple of years since I was working there, but changes in Australia had a way of becoming global.

Taomyn said 5:05PM on 5-11-2008

Old news!!!!! Must be a slow day.

keeves said 5:21PM on 5-11-2008

If this had been built into ebay since the beginning there would be no problem about it. Nobody complains that you have to pay for Amazon-market place items via the Amazon payment method...

dfgdfgdfgd said 8:42PM on 5-12-2008

This could be another nail in Ebay's coffin. I do not know about the perception among sellers and buyers in the US or elsewhere, but in Germany Paypal's reputation (for Ebay at least) is really, really, really bad.

If you as a seller accept Paypal, it might very well happen that in the end of the transaction both your money and your product are gone. Also due to absurd, seemingly arbitrary behavior on Paypal's side money might simply disappear, or your account (including your money) might become frozen for months.

If any such thing happens, it will be impossible to communicate with Paypal. They will have someone answer your emails, but only with a combination of predefined text-blocks that have nothing (or very little) to do with your inquiry. Repeated emails will not change anything. There is no noticable issue escalation taking place.

Also, for buyers, Ebay's claims about consumer protection are nonsense. I needed that "buyer protection" in the past, and Paypal demanded from me to prove my claims of the article being defective by providing them with a written statement by some "expert". To get such a statement is nearly impossible, or at least very expensive. Of course you have to pay that expert yourself. My article had cost 90 Euro, definitely not expensive enough to pay for a professional expert evaluation. Remember: The "buyer protection" is NOT an insurance, it is an effing mercy.

I would prefer my good ol' German bank system over Paypal any day - at least for sums higher than, say, 20 Euro.

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