ACCC versus eBay on ‘PayPal only’ 11:05am 27.06.08

The Australian Competition and Consumer Commission (ACCC) has cautioned e-commerce site eBay for its controversial policy on PayPal, a payment system wholly owned by eBay.

The site has attempted to force buyers to use only PayPal for all electronic transactions, for which they charge a percentage between 1.1 and 2.4 percent of the total amount in fees.

The Reserve Bank, the Australian Bankers Association and hundreds of eBay sellers have submitted their concerns to the ACCC about eBay using substantial market power to decrease competition in the online payments market. The policy will affect online payment providers including PayMate, Centricom and the banks.

“The ACCC acknowledges that having PayPal as the only payment provider has the potential to deliver some benefits to users, such as increased buyer protection insurance in certain circumstances,” said ACCC chairman Graeme Samuel. “However, the ACCC believes that consumers are in the best position to decide which payment method is most suitable for them.”