eBay is requiring that users in Australia use its PayPal payment service on all transactions. Aside from transactions in which the buyer picks up items in person and cash-on-delivery, no other payment method will be permitted, and eBay is banning sellers from using their own merchant credit card accounts if they have them. eBay said it is making the changes "to make buying on eBay.com.au even safer and selling more reliable."

According to the new policy, all items listed for sale on eBay.com.au on or after May 21, 2008, must offer PayPal as one of the payment methods. Beginning June17, all items appearing on eBay.com.au must be paid for using PayPal or pay on pick up. Visa and MasterCard are accepted only when processed through PayPal.

The only exceptions to the policy will be for listings in the categories of cars, motorcycles, aircraft, boats, caravans, trailers, trucks (commercials), services, real estate and businesses for sale.

Also beginning June 17, PayPal Buyer Protection will increase to a maximum of $20,000 (based on the full value of the purchase amount, including postage) for eligible items purchased.

eBay spokesperson Nichola Sharpe said the new policy applies only to eBay in Australia. "There are no plans to go to a PayPal-only model for eBay in the US and we haven't announced any other markets at this time."

Sharpe said eBay will evaluate the impact of eBay Australia's new "Safer Payment" requirements. "If we think these changes will significantly improve the buyer experience, we may expand them to additional segments of sellers or categories."

Australian users heard about the new policy on Wednesday in newspapers, which wrote about it before eBay posted it on the Australia Announcement Board. In addition to expressing skepticism that PayPal was actually safer than all other forms of payment processing, some sellers said on eBay discussion boards that they were concerned about a percentage of buyers who distrusted PayPal (http://forums.ebay.com.au/thread.jspa?threadID=600085842).

eBay Payment Restrictions Began in 2005
eBay became stricter with payment processing in late 2005 when it launched in the US a "Safe Payments" policy, later renamed the Accepted Payments policy, that was expanded internationally. The policy famously banned Google Checkout. (A look at the policy on eBay Australia on Wednesday showed the following methods were allowed: Allpay.net, Bidpay, Canadian Tire Money, cash2india, CertaPay, Checkfree.com, hyperwallet.com, Moneybookers.com, Nochex.com, Ozpay.biz, Paymate.com.au, Propay.com, XOOM. Some of those services are no longer active, and beginning June 17, all will be banned.)

In 2007, eBay limited buyer protection to PayPal-funded transactions only (http://www.auctionbytes.com/cab/abn/y07/m01/i10/s01).

Last month, additional payment rules went into effect including an extremely controversial policy that lets PayPal hold funds in certain cases for up to 21 days. According to the policy, "In a small percentage of cases where it has been determined the risk of dissatisfied buyers is higher, PayPal may delay release of the payment funds to the seller until the buyer has left a positive feedback or 21 days have passed without a dispute, claim, chargeback or reversal filed on that transaction" (http://www.auctionbytes.com/cab/abn/y08/m02/i08/s03).

Comment on the AuctionBytes Blog:
http://blog.auctionbytes.com/cgi-bin/blog/blog.pl?/pl/2008/4/1207774925.html