eBay gets set to accept credit cards

eBay began beta testing its Billpoint credit card payment service during the fourth quarter of last year, chief executive Meg Whitman said today during a conference call with investors. The company plans a full-fledged launch during the second quarter of 2000, she said.

"The service increases the velocity of transactions because the payment is easier and items get to them faster," Whitman said. The convenience should benefit eBay because "people feel better about paying with a credit card," she added.

To date, most eBay buyers have paid for their items either through personal checks or money orders.

eBay bought Billpoint last May in an all-stock deal worth about $86 million. Late last year, the company invited 5,000 of its sellers to try out the service, Whitman said. Under the test program, sellers pay 75 cents per item they list on eBay plus 4.75 percent of the closing sale price of each item.

eBay plans to offer the service to other e-commerce companies beginning in the second half of this year, Whitman said.

Many auction sellers already accept credit cards, but require buyers to send their account numbers via email or over the phone. What Billpoint will do is allow buyers to pay for their items online, in the same way that they would buy a book from Amazon.com or a video game from eToys.

Buyers will pay Billpoint, which will immediately credit sellers' bank accounts, minus Billpoint's fees.

Amazon.com introduced a similar service for its auction and zShops customers last fall. But most other person-to-person auction sites rely on ad hoc payment arrangements made between buyers and sellers.

Last June, Excite@Home announced an agreement with Billpoint to use its person-to-person credit card transaction services, and subsequently beta tested it on its site. But Whitman said Billpoint has cancelled its agreement with Excite@Home to focus on developing the system for eBay.