The ACCC will investigate the decision by eBay Australia to restrict payment methods allowed on the site to PayPal – a payment product owned by eBay – as well as credit cards.
A spokeswoman for the ACCC said eBay must prove that the public benefit flowing from the move outweighs the public detriment of what seems to fall under the “third line forcing” provisions of the Trade Practices Act.
eBay Australia has been framing the move as an attempt to increase security and highlighting the lower dispute rate for transactions conducted via PayPal. The company has used its head of security (and a former AFP security chief) Alistair MacGibbon to spin the decision in the media.
At the same time, PayPal has increased its buyer protection program for eBay purchases from $3000 to $20,000.
eBay Australia’s user forums have been filled with vitriolic comments from disaffected sellers and buyers complaining about the decision, which is applicable to eBay’s Australian site only.
“It will discourage Australian buyers I think, because they've for the most part never heard of PayPal. American buyers have lived with it for years, but I'm not targeting American buyers,” wrote an eBay seller called “j*oono”.
Many bloggers have suggested that sellers can maintain direct bank deposit as a payment method by communicating with buyers via email.
Daniel Feiler, media spokesperson for eBay, said if sellers attempted to promote direct bank deposit they could be removed from the site.
“We can remove the listing or even suspend the seller. We know there is going to be some initial pain, some sellers may leave eBay, but the changes will bring a long term benefit.”
Feiler said the number of fraudulent PayPal transactions had fallen over the last 18 months from 0.35 per cent of all transactions to “just over 0.3 per cent.”
In the Banking Ombudsman’s Annual Report for 2007, there were 75 complaints about PayPal.
The ACCC will publish eBay’s request for authorisation of this restriction of payments later this week.
Paymate leads campaign against PayPal
Australian online credit card payments processor Paymate is coordinating a campaign and petition against the eBay Australia decision to ban it and other providers from the site.
“As late as last year, when they got rid of Western Union and others, they confirmed they were happy with us as a payment method, so this has come as a surprise,” said Paymate chief executive Dilip Rao.
“eBay have presented no data to show that Paymate is a less safe way to buy or a less reliable way to sell on eBay compared to PayPal.
“Buyers are protected when using a credit card via Paymate for the entire value of the payment and can get their money back if goods are not delivered or not as described.
“Sellers are protected from fraudulent use of credit cards by our world-class risk assessment systems based on neural network and rules technology.”
Rao said Paymate has a very low fraudulent transaction rate.
“We don’t separate between eBay and non-eBay, but overall our charge-backs are about 0.1 per cent so we don’t really have a problem with charge-backs.”
Paymate has an AFSL and subscribes to the Banking and Financial Services Ombudsman.
There have been nine complaints to the Ombudsman about credit card transactions conducted via Paymate since 2005, all resolved in Paymate’s favour. Three of those related to eBay purchases.
eBay’s prodigal son goes elsewhere
Sydney based Paymate has gone live with a beta version of its new payments platform for AliPay, the largest online payment service provider in China with 62 million registered users.
Alipay is a subsidiary of the listed Alibaba Group, the operators of international trade portal Alibaba.com.
Paymate was launched by eBay in October 2001, but has been progressively sidelined since eBay international purchased PayPal and brought it to Australia in 2005.
Since then it has weathered a number of big hits including competition from mobile phone payments processor Paymate (India) which has grabbed www.paymate.com.
- Third line forcing review for eBay
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15 April 2008 6:30am
