BidPay Closing Operations

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AuctionBytes Blog
News and insight focusing on
ecommerce and the online auction industry
by Ina Steiner, Editor of AuctionBytes.com

December 19, 2007

BidPay Closing Operations

By: Ina Steiner

Wed Dec 19 2007 20:19:43

If you haven't heard, today BidPay announced it is shutting its online payment service. I may have jinxed it - in writing about Amazon's new Pay Now buttons on Friday, I wrote, "There hasn't been this much competition for online payment services that could be used by small online sellers in a long time." mea culpa

The beauty of BidPay, of course, was that eBay allowed its sellers to accept it. Although, ever the ungracious host, eBay only protected buyers for transactions paid for with its own payment service, PayPal. (Since buyers used credit cards with BidPay, they did get protection.)

Sellers listing off-eBay still have choices (including Google Checkout and Amazon Payments), but for eBay.com sellers - especially those who just won't use PayPal - this is a major setback.

Full details in Thursday's newsletter, along with news of another industry closure. (How's that for a teaser?)

Comments (42) | Permalink

Readers Comments

BidPay Closing Operations

by: LapisLee

Wed Dec 19 21:01:31 2007

Once again eBay has screwed us all. I knew this would happen.

BidPay Closing Operations

by: Harry Dick

Wed Dec 19 21:12:06 2007

SCREW EBAY AND BOYCOT THEM!!!

BidPay Closing Operations

by: Starr

Wed Dec 19 21:49:15 2007

How is this Ebay's fault?

BidPay Closing Operations

by: Carol

Wed Dec 19 22:08:06 2007

I will NOT use PAYPAL no matter what! I liked BidPay but refuse to use PayPAL!
Discusting news!

BidPay Closing Operations

by: Eric

Wed Dec 19 22:20:38 2007

Does anyone have any idea why they're ceasing operations? I thought Cybersource was doing really well with it's Bidpay business unit.

BidPay Closing Operations

by: bonni

Wed Dec 19 22:26:23 2007

Ebay, the ungracious host. That sums up a great deal about eBay quite succinctly.

BidPay Closing Operations

by: LapisLee

Wed Dec 19 22:51:25 2007

Electronic payment processor CyberSource Corp. said Wednesday that BidPay.com, its online auction payment processing subsidiary, will stop operations on Dec. 31. The company did not disclose a reason for the shutdown.

CyberSource predicted it will record one-time charges of about $1.7 million to $2.7 million in its fourth quarter for the shutdown. The company said $300,000 of this amount will affect its future cash balance.

Shares of CyberSource rose 27 cents to $17 in aftermarket trading after rising 26 cents during the regular session to $16.73.

BidPay Closing Operations

by: LapisLee

Wed Dec 19 22:56:22 2007

CyberSource bought BidPay.com in March 2006 from First Data, which shut the site down in December 2005 when it had 4 million registered users. The deal was valued at about $3 million, including cash outlays totaling nearly $2 million and assumption of tax liabilities. CyberSource relaunched the site three months later.

In its most recent financial filing, CyberSource reported that BidPay.com revenue totaled $120,000 and generated losses in its fiscal 2007 third quarter. That was down from $173,000 in sales in the fourth quarter of 2006, when it had 250,000 registered users.

BidPay Closing Operations

by: Dave

Wed Dec 19 22:56:47 2007

BidPay was a substantial portion of our non eBay payment methods, little came from eBay sales where Paypal seems to dominate for obvious reasons. Bidpay will be no loss as far as our eBay operations are concerned.

BidPay Closing Operations

by: LapisLee

Thu Dec 20 00:02:44 2007

My Paypal account was closed without further chance of appeal in June 2006 after a competitor placed one of the unknown 'banned words' in the Reason line of the PayPal payment form after making a small purchase. Since I was out of town and did not return the small sum within the required 72 hours of receipt, I lost my PayPal account irrevocably. My business lost 50% sales revenue instead of doubling every month as it had for the past six months in a row.

BidPay Closing Operations

by: Benny

Thu Dec 20 01:39:20 2007

Got my closing notification email today from BidPay and it was like reading a nightmare...I too refuse to use Papal and my auctions where doing well with the Bidpay payment method...cant believe CyberSource was losing money with BidPay... I use ACTIVA auction software with my ebay listings and I just now read they are starting an auction payment method... wonder if eBay & Paypal will muscle them out of business ?

BidPay Closing Operations

by: Sue @ TameBay

Thu Dec 20 05:01:35 2007

That's a great shame - I used to use BidPay a LOT before PayPal was even thought of. Though like most of the rest of the world, I haven't used them at all since I got a PP account - so I guess this doesn't come as any great surprise.

BidPay Closing Operations

by: jsicolts

Thu Dec 20 06:13:53 2007

that's too bad. Once in awhile a buyer liked to use bidpay for a variety of reasons. Paypal is a tool for ebay ovouisly and will only get worse screwing more & more sellers.

BidPay Closing Operations

by: Mark S. Hutchins

Thu Dec 20 07:20:56 2007

This is just another example of unfair competition, the fox is watching the hen house now.

BidPay Closing Operations

by: LapisLee

Thu Dec 20 08:07:12 2007

eBay claims Paypal is the company's crown jewel, always profitable and hugely successful. If that is true then why do all competitors fail? Does success only scale up in this business?

Common sense tells us that if a business process is profitable then the process itself should be profitable for both small and large players with the only difference being the number of zeros on the bottom line.

I’d like to know BidPay quit because they truly couldn’t make a profit? If so, does that mean that Paypal is really that much better at it or is there something I’m missing entirely? There is something rotten in Denmark.

BidPay Closing Operations

by: forget it

Thu Dec 20 09:31:33 2007

Use Paypal? Don't leave a penny in your account. Paypal can shut your account down without any good reason and for any reason they feel. Some protection.

BidPay Closing Operations

by: Dr. V K Pandey

Thu Dec 20 10:03:08 2007

It is a great loss for buyers from smaller countries which still are not on PayPal list. Our only option was BidPay. I am really sorry to see BidPay go. I am not particularly against any company what other option is left for people living in smaller countries?

BidPay Closing Operations

by: Mikey

Thu Dec 20 10:34:36 2007

$127k of Rev in the 3rd quarter, the company was obviously being shut down because it doesn't make enough to support even one staff member.

BidPay Closing Operations

by: John

Thu Dec 20 10:38:23 2007

Buyers love PayPal. After all, where else online or off do buyers get to purchase merchandise, then look, touch, smell and taste it and then decide to keep it or send it back for a full refund including shipping? It don't get no better than that. The sellers keep accepting it so PayPal will keep serving it up while complaining. Go figure.

BidPay Closing Operations

by: Joe

Thu Dec 20 10:56:19 2007

Paypal is a corrupt monopoly that is not federally regulated and the majority of their members do not know that.
NEVER leave money in your paypal account, they will freeze your account without any notice and collect interest off of it for up to 6 months. They froze $30,000.00 of mine for 6 months because of a bankruptcy I had 4 years ago which almost ruined my business. The three prior years I used paypal I had no disputes or chargebacks and did $100,000.00 + in sales thru ebay and paypal annually. I guess to paypal that meant nothing.
Why the government hasn't done anything about their corrupt practices is beyond me. Check out the website paypalsucks.com for further info on how paypal will screw over anyone.
I'm sorry bidpay is shutting down because that gives paypal more business and more people to screw.
Auctioncheckout is another payment method for those of you that relied soley on bidpay, it has been working great for me.

BidPay Closing Operations

by: Suzanne Wells

Thu Dec 20 13:38:17 2007

I'm with Starr - How is this eBay's fault? I personally never used BidPay and am happy with service from Paypal.

BidPay Closing Operations

by: LapisLee

Thu Dec 20 14:22:23 2007

Can you say 'monopoly'?

Permitted on eBay.com: Sellers may offer to accept PayPal, credit cards including MasterCard/Visa/Amex/Discover® Network, debit cards and bank electronic payments online for eBay purchases. Sellers may also offer to accept bank-to-bank transfers, often known as bank wire transfers or bank cash transfers. Sellers may accept COD (cash on delivery) or cash for in person transactions. Sellers may offer to accept personal checks, money orders, cashier's checks, certified checks and other negotiable instruments.

BidPay Closing Operations

by: Corporate Greed is out-of-control

Thu Dec 20 14:54:51 2007

Regarding the question about ''how this is eBay's fault?'' Simply go to this link: https://www.paypal.com/us/cgi-bin/webscr?cmd=p/gen/about-outside
R>PayPal was acquired by eBay... that's how it is eBay's fault. Also, re-read the article (at the top of this page) by Ina Steiner and note the second paragraph.

I can't even begin to understand why anyone would post a question like that in the first place!

BidPay Closing Operations

by: James R.

Thu Dec 20 15:57:30 2007

Of many auctions listing BidPay, only one buyer ever used it. I empathize with their plight-- trying to compete with an established, if flawed, mega-competitor. The deck was stacked against them, although the idea of accepting credit cards seems viable on paper. It was a shock to receive the email about their closing, but, as always, onwards and upwards. No use crying over spilt milk. Just call the cat.

Best,

James R.
Sierra Foothills

BidPay Closing Operations

by: Justin

Thu Dec 20 16:12:41 2007

I really thought bidpay had this the 2nd time around. but as they say 3rd times a charm! I'm just glad I switched my checkout in time!

Justin

BidPay Closing Operations

by: Greg

Thu Dec 20 17:38:32 2007

Does anyone know what to use besides paypal. Paypal is a bunch of theifs. They have stole atleast $400 from my account. I dont like to use paypal but it you dont have it on your auctions no one will bid.

BidPay Closing Operations

by: Ed

Thu Dec 20 17:58:31 2007

Not a surprise Bidpay angered a lot of people by re-opening as a Paypal wanna-be rather then offering the money order service that built their reputation but it's still sad news as i'll never use Paypal as their a bunch of theives which is not surprising as ebay also make unauthorized charges and refuses to refund and has members in the BBB to shut down any cases filed against them. Now this news gives ebay more opportunity to rip people off for more money by limiting your options.

BidPay Closing Operations

by: Chris

Fri Dec 21 01:48:57 2007

The problem is buyers are going to use what they know - and most all know Paypal. Not many have ever heard of Bidpay so why would they use it over Paypal? Sellers could care less that Paypal charges me more for fees - as long as they get their product. Nothing is going to change with ebay or Paypal until someone people know is allowed in - like Google.

BidPay Closing Operations

by: Eddie St Clare

Fri Dec 21 02:47:18 2007

If it helps, where Paypal is not an option for an International purchase or payment, there is a long term established UK business (AuctionChex) that may provide an alternative for some ?

Eddie.

BidPay Closing Operations

by: Sam

Sat Dec 22 19:29:42 2007

Eddie,

You mentioned AuctionChex, according to eBay that is not an approved service.

http://pages.ebay.com/help/policies/accepted-payments-
policy.html

BidPay Closing Operations

by: Mike

Sun Dec 23 11:38:52 2007

Due to PayPal's limited coverage for US sellers shipping overseas, we require most non-US buyers to send us a BidPay payment, or to send us a bank-issued certified check in USD. Average eBay transaction is $600, so avoiding chargeback scamming is a big issue for us.

For the second time in our online sales history, we will miss BidPay. This will force us to stop taking eBay bids from sellers in countries that PayPal does not Confirm the delivery address.

BidPay Closing Operations

by: John

Sun Dec 23 18:35:31 2007

Payment Services permitted on eBay: Allpay.net, Bidpay, cash2india, CertaPay, Checkfree.com, hyperwallet.com, Moneybookers.com, Nochex.com, Ozpay.biz, Paymate.com.au, Propay.com, XOOM

BidPay Closing Operations

by: Ainsworth

Wed Dec 26 11:00:06 2007

I take exception with the following misleading comment in your article ...

''eBay only protected buyers for transactions paid for with its own payment service, PayPal''

eBay does not protect anyone. Neither does PayPal. The typical transaction is only protected up to $200, so if you make a large purchase and the seller is fraudulent you may still be out significant sums. The PayPal recovery process also lacks transparency, you can never be sure that PayPal did not recover the total value of your purchase and then only gives you $200 of the funds recovered.

The solution pay with PayPal using your credit card. Then do a charge back whenever you need to.

BidPay Closing Operations

by: Erik

Thu Dec 27 11:22:11 2007

Bidpay was used extensively by the Gunbroker community, and will be greatly missed. Does anyone know of a payment service that allows firearms related transactions?

BidPay Closing Operations

by: Robert

Thu Dec 27 12:10:24 2007

I don't under stand, I have been on both ebay - PP since they started and have never had a problem! I can only figure that everyones issue here is with success of an American company? both have protected me as a buyer and seller, if they closed your account it must have been a good reason, and that protected me too.

BidPay Closing Operations

by: Gary

Fri Dec 28 16:06:34 2007

I too have been ripped off by Paypal in a transaction with a crook in Hong Kong. I don't know where they came up with the idea that if a buyer doesn't get insurance that Paypal will come to the rescue and take money from sellers accounts. Sounds like robbery to me.
Never, Never again. And for anyone that thinks Paypal is the way to go, just wait until it happens to you. Good Luck!

BidPay Closing Operations

by: kris

Mon Dec 31 18:18:37 2007

Does anyone know anything about auctionpay.com and if this is allowed to be used on ebay? Is it safe and will ebay allow this payment site?

BidPay Closing Operations

by: chris

Tue Jan 1 18:41:31 2008

paypal sucks I have herd so many horror stories,www.suepaypal.com they don't alow guns but they do porn? all I herd from the net was paypal/ebay put bidpay out of business in many ways it will be out soon in Wsj IM sure again ebay rips us all off hmm wonder if th Bush family is major stock holders now too?

BidPay Closing Operations

by: Bob. H

Wed Jan 2 09:34:36 2008

After reading these posts, I'm even more convinced that eBay/PayPal has way too many sellers (that use their services) who DON'T HAVE A CLUE.

According to them, eBay is out to get them for no reason and is trying to rip them off any way they can! Come on people, could it be possible that maybe, just maybe, that you're at fault.

I've had over 4000 eBay/PayPal transactions with only ONE chargeback. Yes, I lost it because I couldn't prove delivery. My fault -- I lost track of the delivery confirmation number. I've also had 4 rulings in my favor because I had folllowed PayPal's procedures for shipping (and could prove delivery confirmation).

Protect yourself and use the services properly and 99.9% of the transactions will be just fine. Quit whining about stuff, accept responsibility, and you'll probably be OK. MILLIONS of PayPal sellers have no problems with eBay and/or PayPal. If YOU are having issues, look within.

Conspiracy theories float on these forums like water down a mountain stream...eBay is not THAT powerful that they can put BidPay out of business. Lack of business for BidPay put them out of business. Statistically speaking, they weren't cheaper than PayPal. As a seller, I actually trusted PayPal more than BidPay.

PayPal is not tring to screw anybody over...they're trying to make money. The fees are appropriately priced for this type of service. Small storefront retailers pay these kinds of fees all the time when processing credit cards.

And, if you do end up with a loss...it's part of doing business!

BidPay Closing Operations

by: Joel

Wed Jan 2 13:15:06 2008

I am really sorry for BidPay since it was an alternative for us who live in small countries. Anyways thats the way the things go...

BidPay Closing Operations

by: now4real954

Mon Jan 21 14:33:06 2008

its amazing that paypal is still out there screwing people over...a monopoly is a monopoly and is supposed to be illegal in the united states...but again paypal gets to ruin the competition...

i stopped using paypal to buy my ebay auctions because after taking $2000 of my money thru my credit card they want me to get a paypal credit card or they want my banking information even if i never use my bank for payments...this is crap...

it is none of their business what my banking practices are and i will never add my bank account to their site...

i will continue to send money orders for my auctions and i will also use google checkout if a seller will accept it even if paypal doesnt allow google checkout...what a crock...

they just know that if they allow google checkout on the auction pages they will lose at least half of the sales thru paypal because there is nothing more trusted than google in the world...

GOOGLE CHECKOUT RULES

...and i will miss bidpay because they were perfect for me to pay with....

good luck with Amazon Payments...glad that it was offered as an option here because i already have an amazon account and to be able to pay my ebay with it also will be great...

good luck to you who believe that paypal isnt a crook...just remember they only protect the sellers..they are the ones that give them the money...not the buyers...ebay gets money from the sellers for the auction and the sales thru paypal...they are only interested in the money...

it took them 4 months to give me a refund on a fake pair of prada sunglasses that the seller had already been kicked off of ebay...all of their info was fraudulent and i still had to pay to get them authenticated and pay to send them to paypal to get my money back...it was completely obvious that this seller was a crook and they still screwed me over

BidPay Closing Operations

by: cafenitro

Fri Feb 8 14:49:14 2008

I used to think PayPal was great until they froze my account for six months after I accidentally send merchandise to the wrong address. No amount of persuading from me or the buyer could get my money unfrozen and I had a lot of money in there. I use Google Checkout now.

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