eBay folds on PayPal plan

eBay yesterday blinked in the face of a wall of opposition and withdrew its plan to restrict payments for goods purchased through its Australian trading site to PayPal only.

The project attracted scarcely any support, with the RBA, APCA, ABA, CBA, BPay, eBay power sellers, other online payment providers, Google and finally the ACCC all lined up in opposition.

There were few voices in support of eBay's commercial freedom to tie use of its own payments mechanism to purchases (with the Wall Street Journal and The Sheet two of the few).

In an announcement posted on eBay.com.au yesterday morning and emailed to customers, eBay said it would continue to allow all existing payment methods on eBay.com.au.

One aspect of the company's plan remains. eBay requires all sellers to offer PayPal as a payment choice on eBay.com.au along with other permitted payment methods of their choosing.

The move follows a public consultation convened by the ACCC in Sydney on Monday where just one seller rose to support the project.

eBay Australia's chief executive Simon Smith said the company was pleased the ACCC accepted one part of the project: the requirement for all eBay sellers to offer PayPal as a payment option.

"We think the outcome has been a significant improvement in term of the safety of transacting on eBay while still giving buyers and sellers a choice around method of payment mechanism."

Smith said eBay didn't want a long drawn out battle. Previously the company has indicated a preparedness to take on all comers in a drawn out slugfest. There have been rumours that banks, most notably Commonwealth, could launch a private action for damages if the project were to proceed.

In the announcement Smith said: "The draft notice wasn't what we expected and it took us a while to digest it. We decided that if we were to go forward that process was likely to be long and drawn out, so we concluded that it was better to end the confusion here and withdraw the notification now."

eBay had not suffered any brand damage as a result of the shelved project, Smith said.

According to Smith, "Through this process the number of visitors to our site and the number of people looking for things to buy has continued to go up at the same steady rate.

"We operate in a competitive market but we continue to have a healthy and growing online marketplace in Australia."

Data on eBay.com.au traffic available through Alexa appears to bear this out, with a slight rise in traffic over the three months since the controversy broke.

However, data on eBay Australia's sales and revenues over this period (or any period for that matter) isn't available.

The announcement by eBay has put a dampener on one recent payments industry initiative.

Sydney-based Paymate, which led the campaign against eBay's PayPal project, has been holding a "farewell to eBay" sale where buyers are not charged transaction fees.

When The Sheet rang Paymate managing director Dilip Rao yesterday and informed him of eBay's dramatic backdown we sensed an almost disappointed sigh from the seasoned campaigner.

"I really thought they would take it all the way," said Rao.

Rao has given all buyers using Paymate on eBay a "Going off eBay" sale until 15 July, when all other payment methods were to be banned.

"We'll just have to change our farewell eBay sale now to a victory against eBay sale."

True to his word, just 15 minutes later, the going off eBay sale was changed to a "Staying on eBay?" sale and the following notice was placed on Paymate.com:
"We would like to thank the many, many people who pledged us their support and encouraged us to take the battle up to the ACCC."