Paymate issues open challenge to eBay over buyer and sell protection

Stan Beer
Monday, 28 April 2008 19:24

Business IT - Technology

Australian-based Internet payment services provider Paymate has issued an open challenge to eBay Australia to prove claims made to iTWire last week that eBay-owned PayPal offers better buyer and seller protection than Paymate are true. In addition, Paymate says that its payment system can be easily integrated with the eBay site contrary to the claims made by eBay.

In what is being widely viewed as a precursor to a global rollout, eBay Australia plans to make PayPal the only payment option other than cash on delivery, eliminating choices such as direct credit card payments and bank deposits, as well as competing payment clearing systems such as Paymate. Opponents are calling on the Australian Competition and Consumer Commission (ACCC) to block the anti-competitive move by eBay, while eBay is seeking indemnity from the Trade Practices Act, claiming that a PayPal only eBay Australia is for the greater good of consumers.

In an interview with iTWire last week, eBay Australia spokesman Daniel Feiler said: "People are less likely to end up in a dispute if they pay by PayPal than other payment methods such as bank deposits." He also said: "Paymate doesn’t have a buyer protection program; it doesn’t have a seller protection program; and unlike PayPal, there’s no ability for eBay to share the data with Paymate."

As far as Paymate managing director Dilip Rao is concerned, however, the claims of eBay Australia that PayPal offers superior buyer and seller protection are pure bunk. What's more, Mr Rao claims that eBay's contention that it can't share data with Paymate in the same way as it can with PayPal are rubbish.

"eBay say they cannot share risk data with Paymate – this is their restriction, not ours," said Mr Rao.  "We already have a capability to place payments on hold until risk elements are investigated or an escrow process initiated for funds settlement subject to buyer approval – we can easily do this via integration with eBay.

"These packages are really to some extent really marketing offers so that people feel confident using the service. The reality is you have to manage every dispute if there is one," Mr Rao told iTWire.

"We have offered a specific (buyer protection) program packaged that way on Oztion, which is a small Australian auction site. They collaborate with us and promote our service. Similarly if eBay give us access to their marketplace, we would be more than happy to provide an equivalent buyer protection program."

"We don't offer a formal seller protection program but what you've got to figure out is are your sellers happy or unhappy with your service because if you don't protect them from charge backs when buyers behave in a fraudulent way, they won't be happy. So we generally require our sellers to follow best practice in how they ship - to have a trackable (sic) method of shipment. Then they'll be able to argue the case and protect the seller. We do that as part of the service and we would argue that provides better seller protection than formal insurance and that's evidenced by people who have switched to us from PayPal after having been charged back in what they've deemed to be totally unfair circumstances."