eBay did what?

So eBay Australia intends to make PayPal the only method of payment from June this year. And judging by the media coverage, public comment (read, outrage), and submissions to the ACCC, eBay is facing a massive exodus of sellers.

The main concern is the fees charged by PayPal, which is owned by eBay, and the lack of alternative methods of payment. I have been both a seller and buyer on eBay for several years now. As a buyer, it does not concern me too much, as all payments made via PayPal are free. In fact, I admit that PayPal may provide an easier choice as compare to other payment methods due to its tight integration with eBay.

However, as a seller, I absolutely loathe PayPal. Many sellers (me, included) feel that we are being double dipped by eBay and PayPal, as we pay the eBay fees for listing on the website, and PayPal fees for the eventual transaction of funds between the buyer and seller.

By removing the other methods of payment, eBay effectively forces the sellers to absorb the fee imposed by PayPal and raises the cost of doing business on eBay.

Let's say that I am selling an item on eBay. I list the starting bid for the item at $0.99, and postage at $5. Let's say that the item is sold for $0.99, the fee that I need to pay eBay is:

Inesrtion Fee => 0.3
Final Value Fee => 0.99 * 5.25% = 0.05
Total eBay fee => 0.3 + 0.05 = 0.35

Now let's say that PayPal is used to pay for the item. The PayPal fee is:

Fixed amount => 0.3
Fee => 5.99 * 2.4% = 0.14
Total PayPal fee => 0.3 + 0.14 = 0.44

I got to pay more to PayPal than I do to eBay! Ridiculous! eBay is losing it. They claim that PayPal is safer than other methods of payment, but where is the evidence to support it?

It's a cycle that will only make eBay less and less popular. The livelihood of eBay is going to dry up as sellers moves to other auction sites (eg. Oztion) which offer an alternative payment method. Items on offer on eBay will dry up, and so will the buyers.

Regardless of outcome by the ACCC in regards to eBay's purposed change, the damage has already been done. It's a PR disaster for eBay. If they force their way into making PayPal the only payment method, I, for one, will be looking elsewhere.