eBay Australia Backs Down on PayPal Push released a statement yesterday notifying of their intent to withdraw its notification to the ACCC regarding the removal of other payment options from the 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

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

This afternoon the Australian Competition and Consumer Commission, an independent statutory 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

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. And if they were to click for info, they’d know that there is a cornucopia of other payment options.

“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 Australia Offering Some Sellers Cash to Help Change Listings

Seems that eBay Australia is offering some ‘eligible’ sellers some funding to assist in the modification of their listings prior to June 17th to remove any payment methods that will be disallowed after this date.

I asked my TSAM (Top Seller Account Manager ) about it, but they did not know who was made eligible or how the amounts were calculated.

Cynics will view this as some sort of bribe, but I think given the policy changes on the 17th will impact sellers with large volumes of listings, an initiative like this will help.

I for one will find it hard to say no to an offer of assistance. We will have to change our listings anyway as we are not going to simply stop selling on eBay (like I hear many smaller sellers threatening to do).

eBay still makes up the majority of our sales (although this percentage continues to drop) so if the marketplace decides to throw some money our way to help us sell in their marketplace (by their rules) then I will take the offer thanks very much.

I haven’t heard of many sellers getting the offer, and I admit I was quite surprised to hear the spiel from my TSAM and the generous amount offered…

Yes Please PayPal. Pay Me Later!

Paypal has released a new product in the US, called Pay Me Later.

According to the press release on May 15 2008,

Starting today, eBay buyers in the United States can take advantage of Pay Later’s financing offer of no payments for 90 days for qualifying purchases between $50 and $199.

With Pay Later, buyers now have more ways to pay for items at checkout and can use Pay Later even if they don’t have a PayPal account. The streamlined application can be completed in 30 seconds and provides a buyer with instant access to credit.

Sellers also benefit through increased sales and higher selling prices. According to a study conducted by Northstar Research Partners commissioned by PayPal, 56 percent of PayPal users are more likely to purchase from a merchant if a PayPal deferred payment option is available.1 Pay Later purchases are the same as regular PayPal purchases: the sellers are paid quickly, and standard PayPal fees apply. Sellers who accept PayPal on eBay will automatically offer the Pay Later payment option.

I well and truly put my hand up to accept any new product opportunities like this, especially with all the market changes going on.

For higher priced item seller and product like this could be great in Australia.  Australian TV is awash with ‘No money down, pay nothing for 4 years, interest free’ commercials for whitegoods, computers and furniture. It is a popular marketing model here and a product like this for Paypal users can only help to boost ASPs and conversion rates on eBay (and on our own websites!).

I hope it arrives in Oz soon…

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.


PeSA Australia : Seller anger as eBay narrows payment options

PeSA Australia has released a press release today, in light of yesterday’s announcement from eBay Australia regarding the move to Paypal payment options on the site

Seller anger as eBay narrows payment options

Australian eBay sellers are angry at a policy change by eBay that will push transaction costs onto its sellers.

The new policy requires all sellers to accept Paypal as a payment method, whereas payment methods until now have been at the discretion of the seller.

Phil Leahy, President of the Professional eBay sellers Alliance (PeSA) said:

“PESA appreciates that eBay is focused on improving buyer activity in the marketplace. However, we believe that the current changes are at the expense of sellers in the short term. Paypal payments will reduce the friction of completing transactions, but the limitation of payment choice, higher cost of payment processing and limited real integration between eBay and Paypal far outweighs this benefit.

The change will result in increased transaction charges, as Paypal charges are higher than some other payment methods, such as bank transfers. There are also buyers for whom Paypal is not a preferred online payment method, causing concern that this change will reduce buying activity by such buyers.

The Paypal system is owned by eBay, so eBay will realise an immediate increase in its revenue. PESA says this also raises the question whether the change may be a breach of the Trade Practices Act prohibitions on anti-competitive conduct.

Mr Leahy said that eBay should be making the changes more palatable to its key customers by using this change to improve the system:

“We believe that eBay is serious about improving buyer activity and are committed to helping sellers navigate the rapidly changing marketplace.

However, as an organisation, we believe sellers would be more encouraged if eBay provided a positive impact to these changes. For example, eBay should be able to eliminate all non-paying bidders, which are a real cost to sellers. Such a change would help offset the higher costs that sellers will incur with the new policy, and could be funded by the extra volume of business eBay will push to Paypal.”

PESA has called on eBay to announce a timetable regarding fee reductions for Australian sellers, which it believes should be put in place before the new Paypal policy takes effect on June 17, 2008.

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 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…