About 90 percent of sales on the popular online auction site are paid with checks or money orders because few sellers accept credit cards. As part of the deal, Wells Fargo has agreed to purchase a 35 percent stake in Billpoint, which eBay acquired in May 1999, for an undisclosed sum. Billpoint also hopes to offer its services to users on other e-commerce Web sites. Looking into the future, Dan MacKeigan, a Friedman Billings Ramsey analyst, said consumers could use Billpoint's services on cell phones and other wireless devices to split lunch bills or pay money to friends. The principle behind Billpoint's credit card service is simple.
Sellers sign up with the service and list the items they are auctioning.
Buyers enter their credit card information, which Billpoint can keep on file, when they've placed the winning bid. Billpoint handles the job of charging buyers' credit cards and depositing funds in sellers' bank accounts. Right now, many sellers won't ship a item until a buyer's check or money order arrives and is cleared. The service is free for buyers. To encourage sellers to test the system as it rolls it out, Billpoint is waiving fees for the first three months.