PayPal: Risky for eBay and users alike?

PayPal: Risky for eBay and users alike?

Summary: As eBay continues to promote its move to a single payment system &mdash PayPal &mdash as being in the best interests of its users, one security specialist believes it may be asking for trouble.

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As eBay continues to promote its move to a single payment system &mdash PayPal &mdash as being in the best interests of its users, one security specialist believes it may be asking for trouble.

The online auction giant issued a statement to its entire Australian user base this week, alerting them to the mid-July deadline to comply with the new payment policy. From 15 July, all transactions on eBay's Australian site will be limited PayPal, as the company awaits the Australian Competition and Consumer Commission's (ACCC) final ruling on the matter.

"Current policies regarding accepted payment methods still apply. This means PayPal is required on all listings on eBay.com.au. Other payment methods (ie bank deposit, cheque/money order) may also be offered until 15 July 2008... any listings that do not comply with eBay's Accepted Payments Policy will be removed," eBay said in the mail to users.

Andrew Walls, research director and security specialist at Gartner, said eBay must now be very comfortable with PayPal.

"From their [eBay's] point of view monopolising its payment system would seem inherently secure...but at the same time there's an inherent danger in doing so, because if there's a security breach in PayPal significant enough to damage their reputation eBay may run into some real trouble," he told ZDNet.com.au.

Walls added that many users may have their own particular payment method which they believe to be the most secure, but now will be asked to "place all of their trust in PayPal".

"Having multiple payment options gives users the ability to choose which one they prefer on the basis of good security," he said. "Some people may particularly trust their credit card provider when it comes to security, others may have a particularly good association with EFTPOS."

Despite this, Walls does not believe that security is the central concern of any of the parties involved in the ongoing dispute over the exclusive use of PayPal.

"The grumbling is really less related to security and more related to who's making money off the transactions, and in this case eBay clearly stands to benefit from the move," he said.

After ruling that eBay extend the availability of other payment systems by a month, the ACCC has begun accepting public submissions in response to the draft notice proposing to block a permanent switch to PayPal-only transactions by eBay.

According to an ACCC spokesperson, a public conference may also be called in response to the matter, and ahead of the deadline for submissions on 3 July.

"After that there'll be a final decision on whether or not to revoke the [PayPal] notice," said the spokesperson.

The spokesperson told ZDNet.com.au today that eBay will be able to appeal the decision through the Australian Competition Tribunal.

Topics: Security, CXO, E-Commerce, Government, Government AU, IT Priorities

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23 comments
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  • ebay and paypal

    Every one knows that ebay is double dipping. If the dont get it through they will appeal it anyway. The damage is already done in Australia, buyer are leaving sellers are leaving and every one has a foul taste in their mouth from what has happened. in 4 days I have had 5 people ask me to list on www.bang4bucks.com.au these are regular customers of mine and I will be listing on there and supporting a private owned company instead of all these greedy corporate business.
    Sellers have plenty of places to list and trade so why not make a stand and move on and take your buyers with you, I know after my buyers contacting me this week they will buy from me elsewhere. Apparently the new site is offering like power buyer points so buyers can get freebies
    anonymous
  • Leave ebay, support Aussie sites

    eBay does not respect Australians especially Australian law. Support Aussie, Support OZtion.com.au and Trading Post
    anonymous
  • Shoplift Victoriously

    Preypal is the WORST in security. Stop by the ebay mesage board and see how many people are getting ripped off. Buyer buys, pays, get the item and then files a chargeback. 99% of the time, the buyer gets to keep the tiem and get a refund. How is that secure?
    Stop by and see ALL the sellers, who are getting ripped off, left and right.
    http://forums.ebay.com/db2/forum.jspa?forumID=113
    anonymous
  • See eBay/PayPal for what they really are

    If the above post had been made on any of eBay's own forums, it would have been deleted and the poster sent a warning for violating eBay policy.

    No other auction site would do that if you mentioned eBay or PayPal in a post

    That's how "open and honest" greedBay is...
    anonymous
  • Paypal - A derred payment system at best

    Paypal ahs the ability to arbitrarily stop payment on a transaction until it is satisfied it has enough documentation to allow the payment to proceed. This is done on the basis of 'identification' which it should have done at the tiem the account was opened, not during the course of a transaction.

    I have left eBay and definitely Paypal becasue of this practice and I am sure if Paypal continues this practice many, many more will leave simply for this reason.

    eBay and Paypal are manipulating themselves into a position of being no longr required. there are plenty of options out there, take them and make eBay/Paypal the losers
    anonymous
  • Aus equivalent of PayPal?

    Is there an Australian equivalent of PP - we have the auction sites, but do we have a PP equivalent?
    anonymous
  • Try Paymate.com.au

    For an Aussie Paypal alternative check out Paymate - http://www.paymate.com.au
    anonymous
  • eBay's rope is just long enough

    Ebay's decision has demonstrated to me that the company sees itself as beyond the law and thinks it knows better than buyers and sellers what they want.

    It's prompted me to leave the service and I'll need to see a lot of change before I go back.
    anonymous
  • reputation

    even if they do drop the paypal only requirements - theyr reputation is destroyed. there are other online auction sites to try out - im watching smartbid.com.au which opens very shortly - looks like a great opportunity for both buyers and sellers.
    anonymous
  • smartbid.com.au

    im also watching smartbid.com.au - only $5 registration and you get free listings for the lifetime of your membership? yes please!!
    anonymous
  • smart bid auctions

    I just signed up for the smartbid auction site, looks like a winner!
    anonymous
  • ebay and paypal

    As an eBay user, I have always felt paying by direct bank Transfer gives me the most comfort as a buyer. There is no way I will use Paypal...
    See you later eBay, and bring on the alternatives.
    anonymous
  • www.bang4bucks.com.au

    I have given it a try, in fact I have listed my entire inventory there, have made sales and when I ask a question, I actually get an answer that relates to the question! My buyers are following me over and are happy to see an Aussie alternative to eBay that doesn't force them to use any particular payment method.
    anonymous
  • EBAY

    Its time to try somewhere else these people are starting up in Australia from the 1st July 08 II have already signed up recommend the word gets past around so EBAY will suffer big time..
    smartbid.com.au
    http://www.smartbid.com.au/index.php?
    anonymous
  • Bidpal.com.au

    i have been listing on bidpal.com.au australia auctions. seem to be growing very fast. they also have a offer going, the first 1000 members don't have to pay fees ever. no listing or final value fees.

    it is worth a look at www.bidpal.com.au
    support aussie websites, also don't use paypal use paymate.
    anonymous
  • www.smartbid.com.au

    I've been watching this site and it went live today. I have signed up and it's such a refreshing change not being slugged with fees.

    I loved their opening message:

    Pencil the first of July 2008 in on your calendar.
    Why? Because this is the date Australians were finally provided with a community auction site, made by users for users.
    Smartbid is a genuine alternative to EBay and the other various spin off auction sites whose not so lofty aspirations seem to be being regarded as the slightly lesser evil.
    The difference? Smartbid is free! You can sell and buy items for no cost.
    How can this work?
    Community!
    The Smartbid business model is so simple yet incomprehensible for other auction sites. We don�t mind making it public because we know it�s far too radical for the opposition to attempt so here it is:
    Create a community of users and don�t rip them off
    Smartbid will charge a minimal charge for some additional extras, if required in order to function as a viable business.
    Smartbid are not going to siphon money from their users so they can advertise on TV and radio. Our strength is our site and the services provided. This is the information age and what better method of spreading the word then a base of satisfied Internet savvy users.
    Smartbid are not going to ask �how� you found their site. They only care about �why� you found their site.


    Goodbye Ebay
    anonymous
  • www.smartbid.com.au

    Oops let me try that again:

    Here was there statement:

    Pencil the first of July 2008 in on your calendar.
    Why? Because this is the date Australians were finally provided with a community auction site, made by users for users.

    Smartbid is a genuine alternative to EBay and the other various spin off auction sites whose not so lofty aspirations seem to be being regarded as the slightly lesser evil.
    The difference? Smartbid is free! You can sell and buy items for no cost.
    How can this work?
    Community!
    The Smartbid business model is so simple yet incomprehensible for other auction sites. We don't mind making it public because we know it’s far too radical for the opposition to attempt so here it is:

    Create a community of users and don't rip them off

    Smartbid will charge a minimal charge for some additional extras, if required in order to function as a viable business.

    Smartbid are not going to siphon money from their users so they can advertise on TV and radio. Our strength is our site and the services provided. This is the information age and what better method of spreading the word then a base of satisfied Internet savvy users.
    Smartbid are not going to ask how you found their site. They only care about why you found their site.
    anonymous
  • www.smartbid.com.au

    Last try, I promise!


    Here was their statement:

    Pencil the first of July 2008 in on your calendar.
    Why? Because this is the date Australians were finally provided with a community auction site, made by users for users.

    Smartbid is a genuine alternative to EBay and the other various spin off auction sites whose not so lofty aspirations seem to be being regarded as the slightly lesser evil.

    The difference? Smartbid is free! You can sell and buy items for no cost.

    How can this work?

    Community!

    The Smartbid business model is so simple yet incomprehensible for other auction sites. We don't mind making it public because we know it's far too radical for the opposition to attempt so here it is:

    Create a community of users and don't rip them off

    Smartbid will charge a minimal charge for some additional extras, if required in order to function as a viable business.

    Smartbid are not going to siphon money from their users so they can advertise on TV and radio. Our strength is our site and the services provided.

    This is the information age and what better method of spreading the word then a base of satisfied Internet savvy users.


    Smartbid are not going to ask how you found their site. They only care about why you found their site.

    - as I said before, Goodbye Ebay
    anonymous
  • ebay / paypal buyer protection what a joke

    the only time i have lost money was with a paypal transaction , payed my money to seller via paypal
    never received item , went to ebay they told me i would get a refund , then they told me the person had no money in there paypal account so i had to miss out as a buyer and a seller direct deposit into a bank account is the best way
    anonymous
  • Bid2trade.com.au

    Another new site looking to take market share from Ebay is bid2trade.com.au. No basic listing fees and site credit awarded to all new registrations to help you get your store established sounds like its anothe feasable alternative. Up to $500 site credit sound pretty good to me.

    Bid2trade has only just been launched and the site is pretty good, it just needs more people to list to help kick start it off. Register for free even if it's just for the site credit, I have.
    anonymous