eBay Australia Backs Down on PayPal Push

eBay.com.au released a statement yesterday notifying of their intent to withdraw its notification to the ACCC regarding the removal of other payment options from the eBay.com.au website.

This didn’t come as a big surprise.

Going to court over the matter would indeed have been a long and painful process, not to mention the amount of stress and anxiety it would cause eBay’s poor old PR team in Australia. The lesser of two evils was to withdraw the notification. Good move. They should now make some more publicly satisfying changes to try and get some goodwill back!

PayPal still remains a compulsory payment option at this stage. No doubt this will still cause some animated discussion. In fact, one website has already questioned the validity of the PayPal requirement in relation to the ACCC notice

eBay Australia In Lose/Lose Situation

Time to change all your listings back to include all payment options?

Today eBay announced it would postpone its (now) 15th July deadline for changes of listing payment options to PayPal only, citing its requirements to wait until the review process of the ACCC regarding its recent draft notice is complete.

It seems fairly inevitable to me that the outcome will not fall in eBay’s direction.

eBay Australia seem to be in a lose/lose situation. If they struggle and fight against the ACCC, Google, and other companies and individuals that have submitted complaints to the ACCC they don’t come out of the situation looking good. If they ‘win’ they still look like the bad guy in the media, given the attention this whole situation has received.

And, if the ACCC ends up halting their effort for PayPal only, they lose again. They may then be judged as having made a poor decision to attempt to limit payment options to begin with, and they will lose (more) face with plenty of buyers and sellers.

Its a sad situation, head shaking stuff. I can’t help feeling that if they took smaller bites from the apple over time there wouldn’t have been a public and media reaction as strong as we have seen.

I do hope that other site improvements that they have planned (check out playground.ebay.com.au) ensure the sales and buyers continue to come and purchase…

The ACCC proposes to revoke immunity for eBay’s PayPal only policy

This afternoon the Australian Competition and Consumer Commission, an independent┬ástatutory authority formed in 1995 to administer the Trade Practices Act 1974 and other acts in Australia, issued a press release regarding it’s intent toward the pending PayPal only policy change from eBay.com.au.

The press release says:

The Australian Competition and Consumer Commission has issued a draft notice proposing to revoke a notification* lodged by eBay International A.G. on 11 April 2008. Under the notification, eBay proposes to mandate the use of PayPal for almost all transactions on the eBay site.

“The ACCC is concerned that the notified conduct will allow eBay to use its market power in the supply of online marketplaces to substantially lessen competition in the market in which PayPal operates,” ACCC Chairman, Mr Graeme Samuel, said today.

“PayPal currently competes with a range of other providers to supply online payment services to users of online marketplaces. If the notified conduct is allowed to go ahead, there will be no competition for the supply of such services to buyers and sellers using eBay.

“Given eBay’s position as Australia’s leading online marketplace, the notified conduct will substantially reduce competition to supply online payment services to users of online marketplaces more generally.

“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. However, the ACCC believes that consumers are in the best position to decide which payment method is most suitable for them.

“The notified conduct denies them that choice. Accordingly, the ACCC considers that these benefits do not outweigh the anti-competitive effects of the conduct,” Mr Samuel said.

eBay proposes to implement the conduct in two stages. From 21 May 2008, all sellers on eBay were required to offer PayPal as one of their accepted payment methods. The second stage of the conduct is due to commence on 17 June 2008, with the requirement that all transactions on eBay must be paid for using PayPal or cash on pickup.

“In light of the serious competition concerns raised in the draft notice and the significant concerns raised by interested parties, I have asked eBay to delay implementation of the second stage of the conduct until a final decision is made by the ACCC,” Mr Samuel said.

eBay and interested parties now have time to lodge submissions in response to the draft notice, before the ACCC decides whether to issue a final notice revoking the notification.

So, big news for eBay buyers and sellers in Australia today. This doesn’t put the nail in the coffin just yet though, it’s a stall for more time to make a better informed decision. The ACCC will take a little more time and listen to both sides of the story in a little more detail.

As it stands though, I think it is likely the ACCC will bloke eBay’s policy change plans.

eBay faces the angry mob in Melbourne last night

I have been catching up on the news this morning about eBay’s public meeting in Melbourne regarding the Paypal only changes coming in June.

I wasn’t surprised to hear that there was quite an angry mob asking questions of Simon Smith, Andrew Pipolo and Alistair MacGibbon.

I got invited to have an informal Q&A sessions with Andrew, Alistair and a few others before the general meeting. It was a small group of sellers, maybe 12 of us. The discussion was good, and we learned a little about the attitude of Paypal towards the change. It was actually floated as an idea in August last year by Simon Smith and Alistair and from the sounds of it, met with surprise by Andrew Pipolo.

(more…)

eBay Australia forcing sellers and buyers to use Paypal

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 eBay.com.au 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…