eBay foists PayPal on users

by Ally Froude

May 19, 2008

AUSTRALIANS are being used as guinea pigs in a trial by eBay to reduce the number of financial disputes.

As of May 21, all users on eBay Australia will be forced to include PayPal, an online banking service, on their list of payment options, and from June 17 only PayPal and cash payments will be permitted.

PayPal is only one of the current pay options, alongside bank deposits, postal orders and personal cheques. The alternatives will be banned on June 17.

One user who posted on eBay’s community board insisted the change would hurt her financially.

“I do 75 per cent of my business using bank deposits ...,” said Deb Minter, an online eBay shop owner. “These new rules will send the casual eBayer away from eBay in droves.”

EBay also owns and operates PayPal, and makes use of every transaction by holding payments to supplement the interest. PayPal’s fees average between 1.1 and 2.4 per cent to receive payments, and upwards of $1 to withdraw money.

An online petition opposing mandatory PayPal contained 12,505 signatures as of May 16.

eBay Australia spokeswoman Inessa Jackson accepts there has been an outcry from eBay users, but insists the change will make online trading safer.

“We don’t want to do anything to negatively affect our buyers and sellers,” Ms Jackson said. “We’re trying to improve customer confidence.

“[We are] not dismissing the concerns.”

eBay internal figures show bank deposits are four times more likely to result in a dispute than a PayPal transaction.

“I find PayPal the most convenient method of making purchases,” Jack Smythe, an eBay buyer, told eMu News. “I can make payments to other members promptly without the inconvenience of [having to] find time.”

But why not offer the choice of other electronic payment options? Another growing disadvantage of PayPal is that buyers can simply reverse their payments by saying their goods never arrived.

The removal of bank deposit, money order and cheque options are the first payment limitations to be placed on an eBay site anywhere in the world. Results will be used to determine what actions eBay will take on a global scale.

“...It is wrong to make it the only payment option offered,” wrote Wendy, in a post to the Australian eBay forum. “eBay really needs to do something here.

“With this amount of unhappy people, it can only lead to disaster.”