Eight weeks after First Data Corp. abruptly closed its BidPay service, a company called CyberSource Corp. announced it has acquired the service for $1.8 million and will re-launch it in the coming months. BidPay allows auction winners to purchase money orders online to pay for eBay and online-auction purchases.
CyberSource Corp., a provider of electronic payment and risk-management solutions, said it acquired proprietary technology, databases, and certain intellectual property rights, including exclusive rights to the BidPay.com brand. BidPay will operate as a wholly owned subsidiary of CyberSource.
First Data Corp. had given customers only a week's notice when it announced it would shut down the service as of December 31, 2005 (http://www.auctionbytes.com/cab/abn/y05/m12/i23/s06) It had given no indication as to the reason for the closure, nor that it was looking to sell the service.
While PayPal dominates auction-payment usage (over 94 percent of AuctionBytes readers said they use PayPal in a recent survey), BidPay was the only service that allowed auction buyers to purchase money orders online and was generally liked by users. Buyers paid a non-refundable service fee based on the face value of the money order. Fees ranged from $1.95 for money orders with a face value of $10 and less, to $4.95 plus 2.25 percent of the face value for money orders with a value of between $100.01 and $1000.
eBay began shutting down sellers' listings that mentioned BidPay in the item description in January (http://www.auctionbytes.com/cab/abn/y06/m02/i07/s03) citing its new "Safe Payments" policy, which limits the payment methods sellers can mention in their auction listings (http://pages.ebay.com/help/policies/safe-payments-policy.html). When eBay announced the policy in October, BidPay was included as an acceptable method of payment, but eBay banned it after the service closed.
A Marek Bradbury co-founded BidPay in 1999 and sold it to First Data Corporation/Western Union in 2001 (http://www.auctionbytes.com/cab/abu/y204/m08/abu0125/s04). First Data Corp.'s Western Union changed BidPay's name to "Western Union Auction Payments" in 2003. eBay warns users not to use Western Union wire-transfer services because fraudsters trick auction users into wire-transferring money (which is like sending cash) and not delivering goods, and some eBay buyers and sellers were confusing Western Union's wire-transfer service with the Western Union Auction Payments service. First Data Corp. changed the name back to BidPay in 2004.
According to CyberSource's press release, BidPay had acquired over 4 million registered users. BidPay's privacy policy as of August 1, 2004, stated in part, "BidPay may disclose information about former customers to third parties and companies with which BidPay is affiliated, as well as unaffiliated third parties." The policy can be accessed through the WayBack machine (http://www.waybackmachine.org).
CyberSource Corp. allows merchants to accept multiple payment methods with one interface, including PayPal, credit cards, e-checks, Bill Me Later, regional cards, bank transfers and direct debit (http://digbig.com/4gqew). It gave no indication as to whether it would change BidPay's fee structure.
http://www.cybersource.com
