November 23, 2009 - 11:06am

http://ecommerce-journal.com/node/25429?drgn=1

PayPal Inc., the online payment processor owned by EBay Inc., agreed to work with Australia’s financial crimes regulator after the agency found it wasn’t compliant with reporting standards to prevent money laundering. 

The company will hire an independent party to help it meet the standards, the Australian Transaction Reports and Analysis Centre and PayPal said today in separate statements. 

PayPal has spent $13 million over the last two years to comply with Australia’s regulatory standards, the company said. Australia, the payment processor’s fifth-biggest market, made a similar assessment of Barclays Plc in July. PayPal, which accounts for about 31 percent of EBay’s revenue, said it didn’t know how much it would cost to meet the requirements. 

Under Australian law, banks are required to submit suspicious transactions to the country’s counter-terrorism financing agency, know as AUSTRAC. The lenders must also have processes in place to prevent money laundering. 

Merchants use PayPal for transactions on EBay.com and other retail Web sites. The company charges a fee for every payment processed by a merchant. It is also used by people to send money to each other. 

PayPal is available in 190 countries and supports payments in 24 currencies. EBay said the unit’s sales will double to $5 billion by 2011 and the payment processor will eventually become the San Jose, California-based company’s biggest business.

Source: Bloomberg News