BidPay Re-launches with New Pricing, Chargeback Policy

BidPay.com Inc., an online auction-payment processor that was shut down in December by owner First Data Corp., went live again this week with new pricing, international sales support, and a strategy to appeal to sellers by offering protection against certain chargebacks. The re-launch follows the March 2006 acquisition of BidPay for $1.8 million in cash by Mountain View, Calif.-based e-commerce processor CyberSource Corp. and comes amid strong growth for No. 1 auction-payment processor PayPal Inc., a unit of eBay Inc., the online auction giant. Like PayPal, the new BidPay service charges transaction fees to sellers, a departure from the former pricing model, which charged buyers tiered pricing for what BidPay then regarded as a money-order service. Sellers now pay 2.5% of the sale amount plus 50 cents for domestic transactions. International payments cost 2.9% plus 50 cents. By contrast, PayPal fees range from 1.9% plus 30 cents up to 2.9% plus 30 cents. In return, sellers receive fraud-management services from parent CyberSource as well as protection against chargebacks stemming from unwarranted complaints of non-delivery. In these cases, sellers must produce proof of shipment to receive protection. “If it's buyer fraud, we're not going to hold sellers responsible,” says David Hansen, president of BidPay. Hansen, who is promoting the re-launch this week at eBay Live!, a conference in Las Vegas for eBay buyers and sellers, says BidPay is an approved payment provider on eBay, which accounted for about 95% of the processor's volume when it was part of First Data. The service, however, can be used for transactions on other auction platforms. BidPay also now supports Visa, MasterCard, and American Express credit card transactions from overseas. And, as part of its risk-management routine, it has incorporated the Verified by Visa and MasterCard SecureCode buyer authentication technologies. Sellers need not have established a merchant account for card transactions. BidPay, which had more than 4 million users at the time it ceased operations, now goes up against dominant online transaction processor PayPal, which claims 105 million user accounts (of which 29.2 million are active) and processed 149.2 million transactions in the first quarter, up 35% over the year-earlier period. About 70% of PayPal's transactions come from auction activity.