eBay To Move To PayPal Only In Australia

    May 13, 2008

After negative publicity about an eBay plan to require users in Australia to use PayPal-only, its online payment system, rumors about a similar policy in the U.S. were met with a forceful denial from the company.

"In the U.S., we are not mulling, planning, or otherwise seriously considering a move to PayPal-only," wrote spokesman Usher Lieberman on the company’s eBay Ink blog. "There are U.S. market-specific reasons why PayPal-only is something we simply cannot do in the U.S."

In Australia, the PayPal- only policy goes into effect next month, it has raised concern from users who do not want their payment options limited and sparked complaints about its impact on competition from bankers.

"It’s a test case," Ina Steiner, editor of Auctionbytes.com, told the Mercury News.  "I’m sure they’re very much considering rolling it out to other countries."

Beginning June 17, items sold on www.ebay.com.au must be paid for with PayPal or by using Visa or MasterCard, with the transactions processed by PayPal. The company generates revenue by charging fees for processing sales and monetary transactions.

Writing about eBay’s U.S. plans, Lieberman did not use the word "never" in his posting. "Categorical statements have a tendency to cause headaches down the road, particularly as we evaluate how to move forward in other markets and as conditions could shift in the US."

The online auction company says the switch to PayPal-only will make its service safer in Australia. Along with the PayPay-only offering, it will provide a higher dollar amount of buyer protection along with better seller protection from buyer disputes and the use of stolen credit cards.

"These changes are part of our ongoing commitment to protect our members," the company wrote on its Web site. "We believe buyers will be more confident shopping on eBay if only the safest payment methods are permitted."

Australian bankers don’t agree and have filed submissions to the Australian Competition and Consumer Commission in an attempt to stop the changes. The affect on eBay’s 5 million registered users there, according to the Australian bankers Commission, will be that, "competition will be restricted, innovation and development will be constrained, new entry will be discouraged and PayPal will be able to increase fees and charges to eBay users."

Steiner does not think those objections will influence eBay’s policy. "It’s going to happen," she said. "I don’t think eBay would proceed if they hadn’t laid a lot of groundwork."