In a big move today, eBay Australia announced that shortly only Paypal will be a viable payment option for sellers on the site, along with cash on pickup of items, and credit card payments (via Paypal).

According to the release :

These changes are part of our ongoing commitment to protect our members. We believe buyers will be more confident shopping on eBay if only the safest payment methods are permitted.

In 2007 on those who paid with PayPal were much less likely to enter a dispute. In fact those using PayPal were almost four times less likely to have a dispute over their purchase than people who paid with bank deposit. Plus, PayPal sellers were almost half as likely to experience an unpaid item as sellers who did not accept PayPal.

The information embargo was broken by local press, resulting in the news reaching buyers and sellers before eBay officially told them. This of course has resulted in a torrent of angry posts in the eBay forums.

The Powerseller forum in particular was active, with 230 replies to one post about the news by mid afternoon today.

And I have to say the overall feelings were very negative. To summarise the local eBay Powersellers:

  • Some sellers believe their main demographic may not buy from them any more (older audience) and only younger buyers will be confident to remain on eBay
  • Sellers don’t want to feel like they will be paying higher fees as a result of being forced to use Paypal
  • Annoyance that eBay stands to possibly boost their ‘take’ per transaction by disallowing payment methods like bank transfer, BPay etc
  • Sellers won’t be able to offer buyers a good choice of payment options.

All in all, a bold move, and for my money a potentially dangerous one.

Maybe eBay Australia is being used as a testbed for the other eBay markets, we know this may happen. But is this a step too far? Trust and Safety is an issue yes, and some bold changes need to take place to improve the marketplace so a step back to take 2 steps forward should be the theme for eBay at the moment.

But is this 2 steps back, rather than 1?

I hope eBay Australia haven’t underestimated the impact this change could have in site GMV.

I could just imagine the staff at Oztion running around their office clapping their hands in the air with joy today!

Personally, 50% of our transactions are made with Paypal, the other 50% choose one of 6 other methods we offer. Most of these buyers :

  1. Don’t know how to use Paypal or what is it (they dot trust it!) or
  2. They don’t want to have to set up another account/login on the internet, just to make a payment.

I am going to be frustrated that direct bank transfer won’t be allowed, nor BPay.

Will sellers lose buyers on the site? Will sales drop?

The gamble is that business conditions will improve in the short to medium term as a result of these changes but I can see a lot of sellers now moving faster than ever to set up their own stores and find alternative channels to sell their products on.

Of course, most sellers will remain selling, and most buyers will remain on the site buying, but the next 2-3 months will be interesting. I will be watching our sales and keeping a finger on the pulse to see…