eBay's PayPal only changes deferred indefinitely

Auctioneer must wait for ACCC ruling before forcing users into PayPal.

Controversial changes to payment methods on the online auction site eBay which would require all bidders and sellers to solely use Paypal as a payment method have been delayed indefinitely until the review process with the Australian Competition and Consumer Commission (ACCC) is complete.

eBay spokesperson Daniel Felier told Computerworld that eBay is continuing to work with the ACCC to achieve a beneficial outcome for all eBay members, and will not decide on implementation of any further changes until the ACCC review process is complete.

"We informed them [eBay members] that we're postponing the 15th July plans for removal of other playment methods. The postponement allows eBay additional time with the ACCC to review the commissions recent draft notice and get our submission in place," he said.

eBay's submission to restrict the payment method of users of its site solely to the PayPal system is under review by the ACCC, who expressed concerns that the changes will allow eBay to use its massive online market share to lessen competition in the market where PayPal operates.

"PayPal currently competes with a range of other providers to supply online payment services to users of online marketplaces. If the notified conduct is allowed to go ahead, there will be no competition for the supply of such services to buyers and sellers using eBay," said ACCC chairman Graeme Samuel.

Felier said eBay was listening to a range of customer reactions to the proposal.

"I think certainly the community are out there talking and we're hearing a range of opinions. We certainly know that PayPal is the number one preferred payment method on eBay."

eBay owns PayPal, and charges beteen 1.1-2.4 percent per credit card payment in addition to its standard fees for buying and selling items.

The proposal attracted criticism from the consumer watchdog as it would see the company profiting from payment fees twice during each transaction, and eliminate competition from other secure payment providers.

"Given eBay's position as Australia's leading online marketplace, the notified conduct will substantially reduce competition to supply online payment services to users of online marketplaces more generally," Samuel said.

In an email to eBay users today, the online auction said that changes requiring all sellers to offer PayPal, which came into effect 21 May, will remain.

"These changes mean that all buyers have the option of choosing PayPal, the safer payment method for shopping on eBay.com.au. Payment methods that are currently permitted will continue to be allowed on eBay.com.au until further notice," the email said.

Other safety measures such as the PayPal Seller Protection and increased PayPal Buyer Protection up to $20,0000, will also remain.

eBay said it regrets any ongoing uncertainty that this further delay may cause and indicated it would keep its users of abreast of the ACCC process.

Felier said the ACCC indicated the review process could continue until the end of July, and pending that decision believed it was only fair to the eBay community to delay the changes.

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Andrew Hendry

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