Reserve Bank takes aim at PayPal over eBay payment rules

The Reserve Bank says it will hold discussions with eBay subsidiary PayPal over rules that force eBay sellers to offer PayPal and restrict their ability to offer buyers other payment methods.

The Reserve Bank says it will hold discussions with eBay subsidiary PayPal over rules that force eBay sellers to offer PayPal and restrict their ability to offer buyers other payment methods.

“Over recent months, the board has received a number of comments on the no-surcharge and no-steering rules that apply to payments using the PayPal system as well as the mandated acceptance of PayPal on eBay’s auction site,” the central bank said in a statement.

No-surcharge rules prevent eBay sellers from charging buyers a surcharge to recoup the cost of using a particularly payment method, such as a credit card or PayPal.

No-steering rules prevent eBay sellers from steering customers towards payment methods other than PayPal.

“Where no-surcharge and no-steering rules have existed in other systems, the board has encouraged their removal on the grounds that these rules can diminish competition in the payments system.

“Consistent with this, the bank will shortly be holding discussions with PayPal with a view to seeking the removal of these rules.”

eBay seller Robert Vandermeer, who is part of group of sellers campaigning for eBay to stop forcing sellers to use PayPal, describes the RBA’s action as a big step forward for Australia’s five million eBay users.

“This is a significant step towards returning freedom of choice to both sellers and buyers and allowing hundreds of thousands of Australian sellers who refused to sign up and offer PayPal by 21 May 2008 (and have thus been unable to sell on eBay since then) to return.”

PayPal Australia’s managing director Andrew Pipolo says PayPal will continue to co-operate with the RBA during discussions relating to its no surcharging policy.

“Since launching in early 2005 PayPal has always had on-going dialogue with Australia’s regulators and governing bodies, and will continue to do so,” he says. “We do not intend to speculate, nor comment preemptively, on what the outcome of these discussions might be.”

A date for the first meeting between the RBA and PayPal has not been set.

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