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Auction transactions made secure

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This column originally ran in ComputorEdge on February 23, 2001
(Issue 1908, Computer Grab Bag)

Okay, you finally prevailed in that eBay auction for a 1967 G.I. Joe with lifelike hair and kung-fu grip – and it only set you back $85. Now, how to get the money to the seller? You could send them a check, but unless they're morons they're not sending you anything until it clears – might be two, three weeks before you receive your treasure. Money order? Sellers love them, but they offer little protection to the buyer. Credit cards are another solid option, but most folks who are just clearing out their garage via eBay or Yahoo auctions aren't likely to go through the hassle of getting a merchant account.

Which leaves the new auction pay sites – online portals whose purpose is to facilitate transactions between auction sellers and buyers.


PayPal is the best-known of these transaction portals; whether it's the biggest or most popular is up to the accountants and pencil pushers.

PayPal's services are free to buyers – those sending money. PalPal makes its money by charging sellers a small fee on each transaction. Still, for occasional or part-time auctioneers, it's still probably cheaper than setting up a merchants' credit card account.

Plus, not only can you pay via your credit card on PayPal, you can also draw on a checking account or set up your own PayPal account that you pay funds into and then draw from when you make a purchase.

The site is well laid out and organized, and easy to navigate.

However, PayPal was often overwhelmed during the recent holiday season. There were several times when I simply could not get in to the site because the PayPal servers were loaded far beyond capacity and the pages did not open. Undoubtedly, PayPal's managers are using their hindsight to see that they should have anticipated a spike in usage during the holidays


Billpoint is eBay's own in-house auction payment service. Closely integrated with eBay, it nevertheless can be used to fulfill nearly any online transaction. (Whether any other auction service would allow Billpoint to be advertised on one of their auctions is open to question, however.) Billpoint seems to offer many of the security protections that PayPal offers. The sole payment option with Billpoint seems to be with credit card. As with PayPal, Billpoint makes its money by charging sellers a small fee for each transaction.


BidPay differs from both Billpoint and PayPal in that it doesn't require either sellers or buyers to register in order to complete a transaction. As with Billpoint, the only method for a buyer to pay is with a credit card. Unlike the other services, it seems that BidPay gets the funds to the seller by cutting a money order. Also unlike the other services, BidPay gets its payment from buyers – notsellers. Obviously, those listing auctions are more likely to enjoy BidPay than the winning bidders, who will be paying $5 and up per transaction.