News broke internationally earlier this month when eBay announced that, beginning mid-June, PayPal would be the only method of payment permitted on eBay transactions taking place in Australia.
See Associated Press story “EBay’s PayPal rule in Australia draws fire“.
Excerpt:
It’s unclear whether eBay will institute a similar policy in the United States and other countries. However, the online auction company often tries big changes in smaller markets before expanding them worldwide, and says it is open to that in this case.
“We are going to take learnings from it and apply them accordingly,” said eBay spokesman Usher Lieberman.
EBay says it wants to reduce disputes and restore trust in its marketplace with the PayPal-only plan. Because eBay and PayPal can share information on each transaction, eBay says use of PayPal allows it to stop fraud more efficiently than outside payment services. Pressing that safety argument in a heated discussion with Australian users, an eBay executive compared the new rule to banning the sale of heroin on street corners.
But critics lament that PayPal is costlier than other payment options, and they suspect eBay is just interested in increasing PayPal’s revenue. Australian banks say the plan will eliminate competition for the sake of exaggerated benefits.
“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,” the Australian Bankers Association said in a filing with regulators Thursday.
As most know, PayPal is an eBay company, and the AP story closes as follows:
The Australian experiment could lead to a less-stringent step: Perhaps eBay will require all sellers to at least offer PayPal as a payment choice. No matter how it turns out, however, eBay surely has more big plans for PayPal, which has grown steadily since the auction company bought the payment service in 2002. Last year it accounted for $1.9 billion in revenue, 25 percent of eBay’s total.
In fact, eBay’s top e-commerce executive, Rajiv Dutta, PayPal’s former president, said last year he was convinced PayPal would someday be bigger than eBay’s better-known auction and marketplace business.
AuctionBytes blog reports that eBay sellers in the U.S. have received a survey with questions that make one wonder about related changes to payment options in the U.S. (see “eBay Considering PayPal-Only Policy in US?“). This is a reported excerpt from that survey:
For the next question, we’d like you to consider the following statement outlining a possible scenario regarding a new eBay policy. Please note that this is one of several options still under discussion, that may vary from country to country. We greatly value the opinions of select sellers like yourself and appreciate your taking the time to review it:
To make eBay a safer place to buy and sell, sellers would be limited to accepting only the following safer electronic payment methods for their eBay sales (Paper forms of payment such as personal checks, cashier’s checks and money orders would no longer be allowed):
* PayPal
* Certain other electronic payment methods currently allowed on eBay, such as Xoom and Propay
* Credit Card or Debit Card payments made directly to the seller’s Merchant Account (Sellers would need to acquire a Merchant Account from a bank or other provider)
* In person payment for local pickup items
Sellers would be able to accept any one of the above payment methods, or they could accept all of the above. Sellers would receive full protection from payment reversals for items sold on eBay and paid with PayPal when they ship to the address provided by PayPal. Buyers paying with PayPal would be fully covered, no coverage limit, if their item doesn’t arrive or is different than described.
This seems to be shaping up to be a year of big changes with eBay, given the recent policy changes, including the change in which sellers can no longer leave buyers negative feedback (see “eBay 2008 Update – Policy Changes Announced“) and the announcement that eBay Live Auctions will be discontinued at the end of this year (see “eBay Live Auction Format Being Retired End of 2008“).
Jason De Bord