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The controversial policy due to come into force on July 15 dictated that all transactions on eBay Australia be carried out using PayPal (an eBay subsidiary) or cash on delivery. Direct bank deposits, cheques and money orders were to be barred.

The ACCC had signaled their intentions to reject the policy on the grounds it would lessen competition in the online payments market and deny consumers choice, and were expected to rule after July 3.

The Paypal-only policy – that eBay said was to prevent fraud on the site – also drew the ire of the Reserve Bank, the Australian Bankers' Association, Google and the Australian Securities and Investments Commission.

EBay Australia now plan to implement the strategy recently introduced in the UK – a rule that makes PayPal mandatory on all sales listings but permits other forms of transaction.

However with the Australian press refusing to let the issue die, the online marketplace remains under the microscope of the country’s competition watchdog.

“Given that eBay and PayPal are related companies, eBay requirements that traders make available PayPal among the payment choices offered is, in itself, unlikely to raise exclusive dealing concerns,” said an ACCC spokeswoman.

“We would, however, be concerned over any misrepresentations made in relation to the requirement for PayPal and other conduct that might restrain traders’ ability to offer other payment methods.”

Two of the issues brought to the ACCC’s attention by eBay members are the prominent placement of the PayPal logo during the checkout phase (other payment methods are buried at the end of the page) and material on eBay’s site conveying the message that payment methods other than PayPal were not safe.