Broadband Advisor

eBay is using its massive market share to lock users into paying for purchases through its fee-based PayPal service.

In a world first move, the online retailer has announced that as of June 17, users in Australia must use its PayPal payment service for all transactions, with the only exception for cash-on-delivery.

eBay's new policy will be implemented in two stages. In the first stage, all items listed for sale must offer PayPal by May 21. Then in June it will put an end to direct deposits, personal cheques and money orders as a payment option.

The announcement has sparked widespread anger amongst some members of the eBay community, with a petition already circulating on eBay Australia's Round Table discussion board.

Many criticise the extra fees eBay members will be subjected to through PayPal, which attracts a seller fee of between 1.1 percent and 2.4 percent.

"Double-dipping with fees for sellers is not fair. I'm not a big seller myself but now I will not be a seller at all," said eBay member Melg_80.

Exceptions to the new policy will be for listings in the categories of cars, motorcycles, aircraft, boats, caravans, trailers, trucks (commercials), services, real estate and businesses for sale.

eBay trust and safety director Alastair MacGibbon, touted confidence and safety as the two key reasons for this decision. "It's all about increasing the safety and confidence of Australians on eBay," he said.

"You are four times less likely to have a problem on eBay if you pay for the item with PayPal. eBay is no longer willing to stand aside and allow payment methods on the site that are proven to be less safe to consumers".

MacGibbon dismissed seller concerns surrounding the capability of eBay's older and less tech-savvy audience to use PayPal. "If you're buying and selling already on eBay, then you're tech-savvy enough to be well and truly understanding these changes," he said.

Arnitrav, who has been a member for over 8 years, will leave eBay on June 17.

"It is simply not viable to pay eBay's high listing fees, PayPal fees, and still have the normal bank fees imposed on us by our banks as well. I see it as a slap in the face to all the great honest sellers eBay has," said the member.

"Obviously I'm sad that people feel that way...I do understand that some people are not happy with the decision," said MacGibbon.

"eBay and I will do anything we can to try and convince those people the reason behind this decision."

PayPal Buyer Protection will also increase on June 17 to a maximum of $20,000 for eligible items purchased. Currently that level of protection is $3,000.