eBay woos AU sellers with PayPal discount

PayPal e-mailed its Australian user base over the weekend, announcing it was cutting its cross-border selling charges by 0.5 percent for an indefinite period. Cross-border fees apply when currencies are converted, and are thus a necessary feature of PayPal sales by Australian traders to overseas customers. Currently, PayPal adds a 2.5 percent service fee to currency conversion transactions.

A similar discount is being offered to users registered in Hong Kong, Singapore and Taiwan. The discount does not apply to buyers using the service. The e-mail said the discount period is "provisional" and doesn't specify a cut-off date.

In practice, many local sellers are reluctant to use PayPal, as the fees involved can be high. A common strategy for Aussie-to-Aussie transactions is to take direct deposits to a bank account, but that approach won't usually work with overseas buyers.

eBay acquired PayPal in July 2002 as a replacement for its own Billpoint payment system, which had failed to gain a significant audience. Billpoint was never launched in Australia, though eBay offered support for locally-developed payment service PayPal. At the time of the acquisition, eBay officials said initial promotional efforts would be centred on the US -- a strategy which now appears to be shifting.