eBay's new PayPal rule angers Australians

From next month eBay users in Australia will have to use its online payment service PayPal for all transactions, an Associated Press report said.

The report said the move that has angered users and prompted antitrust scrutiny.

It's unclear whether eBay will institute a similar policy in the US and other countries, the report said.

However, the online auction company often tries big changes in smaller markets before expanding them worldwide, and says it is open to that in this case.

'We are going to take learnings from it and apply them accordingly,' eBay spokesman Usher Lieberman was quoted saying in the report.

eBay says it wants to reduce disputes and restore trust in its marketplace with the PayPal-only plan.

As eBay and PayPal can share information on each transaction, eBay says use of PayPal allows it to stop fraud more efficiently than outside payment services.

Pressing that safety argument in a heated discussion with Australian users, an eBay executive compared the new rule to banning the sale of heroin on street corners.

However critics lament that PayPal is costlier than other payment options and suspect eBay is primarily interested in increasing PayPal's revenue. Australian banks have said that the plan will eliminate competition on the grounds of exaggerated benefits.