The Paypal Restriction Rumor

The internet has been set abuzz with the latest eBay rumor, and it involves the widely accepted payment form Paypal. Now eBay has recently decided to make what could be a somewhat risky move in the Australian market, in what some are calling "test strategies to make a larger, more universal eBay marketplace." Australian eBayers will now be required to pay for purchases using Paypal, which eliminates all other payment methods besides credit cards. If using a card, however, the buyers must still have their payment processed through Paypal. This will bring in more revenue since the company charges fees for processing sales and monetary transactions. With eBay being such a stronghold in today's online business systems, the decision will affect a mass of people. The company is well established having been founded in 1995 and headquartered in San Jose, California. Their other affiliated brands include StumbleUpon, StubHub, Shopping.com, Skype, and of course Paypal. The eBay, Inc. global giant services over 39 markets including America and services over 83.9 million active users internationally. Their Paypal brand was formed in 1998 in San Jose, and is a leader in worldwide online payments. To this date, there are 190 markets serviced having around 60 million active account holders.

Due to the company's decision to restrict access to different payment options for Australian eBayers, panic has arisen in the United States. Presently, an eBayer can choose to pay for their purchases via money order, credit cards, personal check, or Paypal. It's mostly up to the seller as to what options to accept, giving flexibility for those who don't trust using online payment forms or would rather have a paper copy of their receipts. Many Australian buyers are angry at the company for making such a fast move and putting a limit on what they can use to just one payment form. Current eBay spokesman Usher Lieberman has responded to the American restriction rumor on the eBay Ink blog stating,"In the U.S., we are not mulling, planning, or otherwise seriously considering a move to PayPal-only. There are U.S. market-specific reasons why PayPal-only is something we simply cannot do in the U.S." Market analysts are still skeptical and say it is just a ploy to calm American eBayers down until the time of reckoning approaches. Meanwhile, Australian users are concerned about the affect it may have on the sellers' usual business cash flow, and the buyers ability to pay in a way that is convenient for them. Bankers are already complaining about the effect this switch will have on competition in the online buying marketplace. The eBay company says that this new policy is to make the service on www.ebay.com.au safer. Their reasoning is that the trade is worth it to have higher cash amounts of protection for buyers, and should reduce disputes toward sellers, as well as the use of fraudulent credit cards.

Time can only tell what the impact of eBay's Paypal-only plan will be for that country's users. Australian bankers have already filed submissions to the Australian Competition and Consumer Commission. They hope to to stop the switch, so that the 5 million users can continue doing business as usual. The opinion of the Australian bankers Commission is stated as follows,"competition will be restricted, innovation and development will be constrained, new entry will be discouraged and PayPal will be able to increase fees and charges to eBay users." This objection will hardly halt eBay's plans, as they have the change set to take place next month.