Boycott eBay

eBay Australia has decided that in order to offer better consumer protection that only two payment forms will be accepted. This will be implemented in two phases:

1 - All items listed for sale on eBay.com.au on or after 21 May 2008 must offer PayPal as one of the payment methods.
2 - All items appearing on eBay.com.au as of 17 June 2008 must be paid for using one of the following:

• PayPal
• Pay on pick up (i.e. paid for when picking up the item)
• Visa/MasterCard (with transactions processed by PayPal).

Given that eBay owns PayPal it would seem that they are trying to create a vertically integrated business where they get a cut of the money at each step in the transaction.

Here's an example of the fees you can face as a seller. I recently sold my old Mac Mini. The listing fee was $3.49 including a value pack that gave my listing some more prominence. Then there as the final value fee. The item sold for $560, attracting a Final Value Fee of $17.28. So listing and selling has delivered eBay $20.77 - or 3.7%.

Then you need to consider that personal PayPal accounts attract the following fees to accept payments:

• 3.4% plus $0.30 AUD for domestic transactions
• 4.4% + a flat fee as outlined below* for cross-border transactions of 6 transactions per 12 month period, unless initiated through Skype
• 3.4% plus $0.30 AUD for card payments received using PayPal on Skype

Then, if you're only an occasional PayPal user, there's a further $1.00 fee if you transfer less than $150 to your bank account.

In other words eBay collects cash at listing, sale, to receive money and, potentially, when you try and access your funds.

So why are eBay doing this:

These changes are part of our ongoing commitment to protect our members. We believe buyers will be more confident shopping on eBay if only the safest payment methods are permitted.

In 2007 on eBay.com.au those who paid with PayPal were much less likely to enter a dispute. In fact those using PayPal were almost four times less likely to have a dispute over their purchase than people who paid with bank deposit. Plus, PayPal sellers were almost half as likely to experience an unpaid item as sellers who did not accept PayPal.

The data clearly shows that PayPal is a safer way to buy and a more reliable way to sell on eBay.com.au.

The ACCC (Australia's commercial regulator) is now looking at this. My understanding (I'm not a lawyer so this isn't legal advice - just a lay opinion) is that you can't be forced to use a service as a consequence of using some other service. There's a decent definition of this law at this web site.

Cash on delivery is still acceptable but direct transfer to bank accounts will no longer be a payment option.

I've made an official complaint to the ACCC about this matter and would encourage you to do the same. Simply visit the ACCC's complaints site and contact them.