Anthony Green, an eBay seller from Australia, sent a letter to the Reserve Bank of Australia (RBA) requesting it take action with regards to eBay's policy requiring users to offer PayPal on all transactions. Sellers are still fuming over eBay's attempt to make PayPal the exclusive payment service on eBay Australia (referred to as "Stage 2"), which eBay backed away from after a regulatory agency indicated it would not support such a move. However, eBay Australia left its "Stage 1" policy in place, requiring sellers offer PayPal on all transactions.

Reserve Bank of Australia spokesperson John Pick said the bank received the letter on Monday. "The Bank has not yet responded to the letter (other than to acknowledge its receipt) but will do so in due course. The Bank has not initiated a formal review process. At this stage there is no further information available."

The Payments System Board of the RBA has responsibility for promoting stability, efficiency and competition in the payments system, including removing restrictions on merchants that limit their choices in accepting payment instruments. The RBA had filed its objection to eBay Australia's plans to mandate the exclusive use of PayPal for all transactions on the site with the Australian Competition and Consumer Commission (ACCC).

In its submission to the ACCC in May, the Reserve Bank had said eBay's policy limited sellers' ability to put downward pressure on the fees they are charged by declining to accept PayPal payments or encouraging buyers to use an alternative payment method. It said in its submission that a major focus of the board has been to ensure merchants are able to exert competitive pressure on fees when they accept payments. The RBA referred to "tying" rules, which forced merchants to accept a payment method they might not otherwise accept at a price they might not otherwise pay. It also referenced the "no surcharge" rule, which prevents merchants from charging customers extra for using a particular payment instrument, and said it had required those rules to be removed in credit and charge card systems.

Green asked the RBA to enforce the provisions of the Payment Systems (Regulation) Act 1998, writing:

In particular we believe that section 11 (1) of the Act should be utilised to make PayPal a designated payment system because it is in the Public Interest to so do. Further we believe that the Reserve Bank should invoke section 18 and set standards for the operation of PayPal as it relates to ebay as this is in the Public Interest. Our view is that this matter is so urgent that section 18 (5) should be used to issue urgent standards. The urgency stems from the fact that ebay's aggressive tactics to make PayPal the defacto payment method has meant that many ebay members (buyers and sellers) who are unable or less able to adapt to this forced change are becoming unviable and are having to cease trading on ebay

eBay users discussed Green's letter to the RBA on the eBay discussion forums.

Robert Vandermeer, who is coordinating media relations for those sellers involved in the campaign against eBay's PayPal policy, said links to related initiatives by the group over the past two weeks may be found on the eBay discussion boards:

Legal action

Letter campaign to Australia Post

Letter campaign to Ministers, Senators etc

Letter campaign to banks

How to make Fair Trading Complaints