Australia cenbank seeks end of Ebay PayPal rules
Tue Aug 19, 2008 11:26pm EDT

SYDNEY, Aug 20 (Reuters) - Australia's central bank on Wednesday said it would seek to have online auction site Ebay (EBAY.O: Quote, Profile, Research, Stock Buzz) remove rules that could favour the use of its PayPal payments system over other payment methods.

In a statement, the Reserve Bank of Australia (RBA) said it had received a number of representations against Ebay's no-surcharge and no-steering rules.

Such rules prevent a seller on Ebay from charging extra to recoup the cost of a buyer using a particular payment method such as Paypal. Ebay has also prevented sellers from stating a preferred method of payment, such as direct deposit or credit cards.

"Where no-surcharge and no-steering rules have existed in other systems, the Board has encouraged their removal on the grounds that these rules can diminish competition in the payments system," the RBA said.

"Consistent with this, the Bank will shortly be holding discussions with PayPal with a view to seeking the removal of these rules," said the statement.

Ebay recently abandoned attempts to make PayPal the only method of payment in Australia, expect for cash on delivery, after objections from the country's consumer watchdog.

In Australia, the central bank has the power to regulate all payment systems, including PayPal. (Reporting by Wayne Cole)