eBay Australia faces PayPal fury

Aussies unconvinced by PayPal-only policy

eBay Australia's attempt to force all sellers to use PayPal is failing to win over users and still faces a competition investigation.

The online auction house has suspended introduction of the scheme while the Australian Competition and Consumer Commission investigates it. The ACCC has already said that it is concerned that eBay is using its dominant position in online auctions to lessen competition in another market - online payments.

At a meeting held earlier this week eBay failed to answer users' concerns that the decision was more to do with improving eBay's margins than the purported fraud reductions claimed. Under the proposals all transactions on eBay would have to be made using PayPal or cash on delivery.

eBay's Australian managing director Simon Smith read a prepared statement but refused to answer follow-up questions. The meeting, called by the ACCC, was attended by about 50 people although many claimed to represent hundreds of other traders. Certainly forum discussions on the issue have collected hundreds of responses.

The Australian policy is predicted to spread to the rest of the world - eBay UK made it compulsory to offer PayPal earlier this year but sellers can also offer other payment methods. In the US eBay sellers who ship items outside the country are also required to offer PayPal as an option. ®