FRAMINGHAM (03/03/2000) - EBay Inc. and Wells Fargo & Co. in San Francisco launched a joint venture to process person-to-person credit-card payments over the Web auction site.
The company, Billpoint Inc., will speed up the sometimes lengthy transaction process between people who buy and sell at eBay's auction site. But company officials say they also plan to take the new payment platform into other e-commerce areas.
Billpoint allows eBay buyers to enter their credit-card information to make purchases. When a transaction occurs, Billpoint deducts the payment from the buyer's card and electronically credits the seller's bank account, without letting either person see the account information of the other.
EBay officials say they hope the new platform will be more popular than the current payment method used by its 10 million registered users. Now, after an auction is completed, the seller contacts the buyer and tells him where to send a check, then waits for payment before delivering the item.
According to eBay president and CEO Meg Whitman, users of Billpoint don't need new hardware or software.
"The early results from our tests have been strong" Whitman said at the launch this week. "We expect buyers and sellers to move to Billpoint."
EBay and Wells Fargo officials say the teaming of the nation's seventh-largest bank and the Internet auction giant will provide users of Billpoint with added security.
"We believe that we are the first to address the person-to-person payment space," said Michelle Bonaugh, senior vice president of e-commerce at Wells Fargo, which purchased a 35% stake in Billpoint from eBay for an undisclosed sum.
Reactions to the launch were mixed.
"This offers a whole new class of payments online," said Tom Murphy, vice president at Global Concepts Inc., a Norcross, Ga.-based payment systems consulting firm.
Billpoint, bought by eBay in May, will offer its services for free until May 31. After that, transaction fees of 35 cents per sale and 3.5% of the total will be charged to the seller. For transactions under $10, a flat 35-cent fee will apply.