Sydney - Internet auctioneer eBay said Tuesday it would challenge a decision by the Australian consumer watchdog to block a move that would force successful bidders to use its PayPal payments system.

The auction site said the Australian Competition and Consumer Commission (ACCC) decision would force a delay in the introduction of the PayPal-only policy, which was supposed to take effect next week.

The ACCC cited the "anti-competitive effect" of forcing customers to use the eBay-owned PayPal system if they didn't opt to pay cash on delivery or pick up.

The ACCC decision is provisional, hence eBay's response of delaying rather than scrapping its PayPal policy.

US-owned eBay, which claims more than 5 million customers in Australia, argues that PayPal gives buyers and sellers better protection from fraud.

The PayPal-only plan was an initiative of eBay's Australian offshoot but could have spread to other countries if successful. (dpa)