Australian banks to challenge eBay on PayPal plan

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.

According to local press reports, The Australian Bankers Association and The Reserve Bank are lodging submissions with the Australian Competition and Consumer Commission (ACCC) in an attempt to stop the online auction house from introducing the rule change on 18 June.

EBay has applied to the ACCC for an exemption from the Trade Practices Act as it prepares to stop vendors using other payments methods, such as direct bank deposits, cheques and money orders, on its online auction site. An option of paying on delivery will still be offered under the plans.

ACCC has given interested parties until the 2 May to make submissions on the move and local press reports claim the Reserve Bank, which has in the past called for more competition in Internet payments, will register its opposition.

The central bank is thought to favour a new online debit system to securely link bank accounts to merchants.

EBay insists its move is designed to increase security. If successful in Australia, the electronic auction house is expected to introduce the same rules across its global sites.

EBay has been in hot water over anti-competitive moves before, and faced a class action lawsuit in California last year over allegations PayPal sought to improperly monopolise the forms of payment that sellers can use on the auction site.

The firm regularly reviews the payment options available on its Web site and runs a blacklist of prohibited payment vehicles. In June 2006 it added Google Checkout - the rival Internet payment service from the Web search giant - to the prohibited list.

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