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EcommerceBytes-NewsFlash, Number 1826 - July 03, 2008 - ISSN 1539-5065    1 of 4

eBay Cancels Plans to Go PayPal-Only in Australia

By Ina Steiner
July 03, 2008

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eBay has cancelled plans to go to a PayPal-only marketplace in Australia. It had intended to limit buyers and sellers to using its own payment service exclusively, but withdrew its notification to government regulators after the agency indicated its intention to prohibit eBay from doing so.

In June, the Australian Competition and Consumer Commission (ACCC) said it believed consumers were in the best position to determine whether, for their particular transaction, PayPal offers the best features in terms of security, fraud protection, dispute resolution and insurance, at the price offered. It also said that having a single payment provider on eBay might reduce the incentive for other payment systems to develop more secure and cost effective systems. The ACCC based its draft on information provided by eBay and interested parties, including competing payment services and eBay sellers.

eBay rolled out its PayPal policy in two stages, the first requiring all sellers to accept PayPal in all listings, and Stage 2 eliminating all other forms of payment, including merchant credit card accounts. Some eBay sellers reacting to Thursday's announcement expressed dissatisfaction that Stage 1 was still in place, requiring them to accept PayPal. "It's not over until Stage 1 is gone," said one seller. The ACCC could not comment early Thursday afternoon (Sydney time) on whether it would be reviewing the PayPal requirement.

eBay Vice President Simon Smith said in a press release on Thursday, "While we disagree with the ACCC's draft notice, we have decided to withdraw the notification to stop any further confusion and disruption among the eBay Community."

An announcement to users said eBay would continue to allow all existing payment methods on eBay.com.au. Currently, eBay requires all sellers to accept PayPal in their listings, barring a few categories. They may also use listings to offer acceptance of cash (other than by mail or courier) and most valid financial instruments, including personal checks, bank checks, money orders, COD. In addition, certain services are allowed as specified in the company's accepted payments policy (Allpay.net, Bidpay, Canadian Tire Money, cash2india, CertaPay, Checkfree.com, hyperwallet.com, Moneybookers.com, Nochex.com, Ozpay.biz, PayPal, Paymate.com.au, Propay.com, XOOM).

Thursday's Announcement Board post said eBay had decided to withdraw the notification "to stop any further confusion and disruption among the eBay Community," and it said it "regrets any uncertainty that this process has caused among the Community and believe that today's decision will remove further doubt." The statement went on to say:

eBay's goal has always been to provide members with a safer experience. Under the current circumstances, we will continue to look for ways to do that while still offering a variety of payment choices.

eBay requires all sellers to offer PayPal as a payment choice on eBay.com.au along with other permitted payment methods of their choosing.

Although we have decided not to move ahead with the further planned changes, eBay is pleased that all buyers can now choose PayPal along with other permitted payment methods of their choice.

Other recently introduced safety measures, such as PayPal Seller Protection and increased PayPal Buyer Protection (now up to $20,000) will also remain.

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About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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