Angus Kidman22 August 2008, 11:31 AM
The Reserve Bank says it is about to take on eBay to stop the auction giant from forcing sellers to offer PayPal. It has other concerns about eBay's conduct too.
Disgruntled eBay sellers may finally get some relief from the heavy-handed promotion of PayPal, with the Reserve Bank indicating that it wants eBay to remove the requirement that PayPal be a payment option on all listings and allow sellers to pass on service fees for customers who do use PayPal. Questions also remain over how PayPal is handling repayments to customers of a collapsed major eBay seller.
The Reserve Bank — which is responsible for maintaining national fiscal policy — has been inundated with complaints ever since eBay first announcedits plans to make PayPal the sole means for paying for transactions on eBay Australia. While that plan was eventually scuttled following the Australian Competition and Consumer Commissiondeclaring it illegal, it seems the Reserve Bank still isn't happy about eBay requiring all sellers to offer PayPal as an option.
Following a meeting of its Payments Systems Board earlier this week, the Reserve Bank has decided to contact PayPal and ask it to ditch the requirement that PayPal be included on all listings and that no extra charges for handling PayPal payments can be imposed by individual sellers. Or, to put it in the more formal tone used in the bank's statement:
"Over recent months, the Board has received a number of comments on the no-surcharge and no-steering rules that apply to payments using the PayPal system as well as the mandated acceptance of PayPal on eBay’s auction site. Where no-surcharge and no-steering rules have existed in other systems, the Board has encouraged their removal on the grounds that these rules can diminish competition in the payments system. Consistent with this, the Bank will shortly be holding discussions with PayPal with a view to seeking the removal of these rules."
What would that mean in practice? Sellers could offer PayPal as an option, but warn customers that there would be service fees involved. In practice, buyers who had another option (such as bank deposit) would probably choose that — though some might be willing to pay a convenience fee for the ease of using PayPal.
If the entire proposal went through, then including PayPal on all listings would no longer be compulsory. However, since one of the biggest complaints from sellers is that using PayPal ultimately costs them more — because they pay an extra set of fees on the total cost of the item, including non-profit elements such as postage — simply allowing these costs to be recovered might make the inclusion of PayPal less annoying.
Even with that potential relief in sight, there's still plenty of other flies in the ointment for eBay customers. Earlier this week, APC reported on how PayPal customers were being told that refunds for goods not being delivered from recently collapsed seller eBusiness Solutions were a "courtesy" rather than an "obligation", despite the PayPal Buyer Protection program promising to reimburse users under this circumstances.
In a media statement issued yesterday, PayPal said that it had been offering refunds since early August for any customers who had purchased goods using PayPal from eBusiness Solutions since June 2. How was that cut-off arrived at? "We feel that this date allows sufficient time to capture the vast majority of affected customers," PayPal managing director Andrew Pipolo said in a statement.
However, it remains unclear whether all customers in this situation will be treated the same way. Repeated attempts by APC to get clarification as to whether the repayments were a "courtesy", as suggested in an email to one customer from an eBay representative, have yet to see a response.
PayPal's own announcements on the topic are also somewhat contradictory. While its media statement said that the process of issuing refunds was ongoing, a posting on eBay's announcement board said that affected customers "have all now been credited".