Online payments' monopoly feared

Paymate has told the ACCC that the eBay proposal will result in PayPal dominating all online commerce in Australia and discouraging new entrants.
 
"If eBay proceeds with its notified conduct, PayPal will become a dominant payment provider on the eBay Australian website and is likely to become equally dominant in the online marketplace," wrote Paymate CEO Dilip Rao.
 
Online consumers have a general preference for not registering with a number of service providers that require log in procedures (with username and password) said Rao.
 
"Once a critical number of website merchants are forced to offer PayPal then the entire online marketplace will be dominated by PayPal. High switching costs or costs incurred by online sellers to maintain multiple payment options will constrain competitive providers like Paymate from gaining any profitable market share. It is highly likely that PayPal will use this dominant position in pricing out new entrants."
 
Rao asserts that phishing and PayPal account takeovers could increase as a result of the move. He also notes that seventy per cent of disputes between eBay buyers and sellers have nothing to do with payment methods, but with delivery charges or delays.
 
About one per cent of listings on eBay Australia offer Paymate as a payment option, with about 40 per cent offering PayPal.
 
Greg Walters, CEO of QPay, a Brisbane based voice recognition software vendor and mobile payments provider, told the ACCC that eBay sellers were already used to being discouraged from accepting alternative payment methods.
 
"Qpay generally avoids offering its services to eBay merchants, as they have found that eBay merchants are often concerned about being cut off from using eBay if they acquire services from a competitor of PayPal."
 
Currently just one eBay merchant offers QPay as a payment method.