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An article relating to this blog post on Finextra:

Australian banks to challenge eBay on PayPal plan

Australian banks are looking to the country's competition watch dog to derail plans by eBay to force customers to use its PayPal service to make payments on the online auction site.

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Australian central bank cries foul over eBay PayPal mandate

Australia's central bank has stepped into the debate over eBay's proposals to make the use of PayPal mandatory for buyers and sellers on the online aution site.

In a submission to the country's competition commission, the RBA  raises three issues of concern:

"The first is that it could limit the ability of new on-line payment systems to become established and for alternative systems to compete in the on-line payments space. The second is that it could restrict merchants' ability to negotiate lower fees. And the third is that it restricts choice for consumers."

The  unspoken fourth concern is that it could further accelerate the disintermediation of traditional banks in the digital payments field.

You can read the RBA's submission here.


Comments: (1)

A Finextra member
A Finextra member 10 May, 2008, 03:57Be the first to give this comment the thumbs up 0 likes

I am pleased to see the Australian Government has taken swift action and is cognizant of the risks of Ebay's apparently monopolistic behaviour. As I pointed out in my blog there are serious issues with allowing such actions in the marketplace.

The outcome of allowing such behaviour would be inferior security and services and higher prices. Clear and simple.

I'm sure the financial authorities would soon cry foul if the banks united and refused to allow transactions on their accounts via paypal.... 

For instance the many thousands of complaints on the internet about Paypal (search paypal s?cks or paypal fraud for instance) would clearly demonstrate the hazards of being caught in the paypal business model. Reputable banks might have justifiable reasons to preclude doing business with any company which had many thousands of vehement ex-customers venting their frustrations all over the internet. I know that I actively search businesses before considering doing business with them, and banks do too. Did anyone bother in this case?

Shame on Ebay. Three cheers for the Australian banking industry.

I dare say that bridge is burned though.... 

The price of ethics. 

Anyone want to finance an alternative? I'll do a good deal for an online auction business which would like to offer some real customer benefits. OOps I'm blegging....

Paul Penrose
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Paul Penrose

Head of Research


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06 Oct 2006



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EBAday is the annual event for European payments professionals organised by Finextra and the Euro Banking Association. This community has been created to deliver a forum for EBA delegates to exchange views on instant payments, open banking and new developments in payments processing and technology.

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