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eBay buys VeriSign payment gateway for Paypal

 10:02 pm on Oct 10, 2005 (gmt 0)


eBay had a payment service called BillPoint. When eBay realized Paypal was the better product, eBay purchased Paypal and got rid of BillPoint. Paypal has their "virtual terminal" feature but needs a lot of work. I think they bought the VeriSign payment gateway service to get up to speed without having the re-invent the wheel.



 11:10 pm on Oct 10, 2005 (gmt 0)

I can't believe this. And I just tried to go to PayPal's website and got their "down for maintenance" screen.

I moved from Authorize.net to Verisign last year after Authorize.net got slammed by DDoS attacks. Now Verisign's reliability will undoubtedly go downhill considering this new corporate parent.


 11:34 pm on Oct 10, 2005 (gmt 0)

> Now Verisign's reliability will undoubtedly
> go downhill considering this new corporate parent.

Yes, I think you are correct. If Paypal leaves the VeriSign payment service alone to operate as a separate entity, reliability will be the same. But eBay tries to bring VeriSign to their in-house platform, it could spell trouble. Paypal was mostly trouble free before eBay bought them.


 1:29 pm on Oct 11, 2005 (gmt 0)

As a VeriSign user, I'm worried about how they are going to intergrate these platforms. I doubt they will just leave VeriSign alone.


 5:39 pm on Oct 11, 2005 (gmt 0)

As an eBay seller, I would not sign up for VeriSign since the cost of their payment gateway is much higher than other competitors. I am speculating here, but perhaps eBay is looking to actually handle the payment and refund process much like Amazon Payments.


 1:50 am on Oct 12, 2005 (gmt 0)

trying this again, this time in the right place...

paypal has been expanding their payment offerings so that they can process credit card payments directly, so that online merchants can use paypal as a gateway for their card processing, and customers do not need to use a paypal account. my guess, that's what this acquisition is about.


 6:38 am on Oct 12, 2005 (gmt 0)

I'm thinking they're just bulking up for the online payment war when google launches their payment system.


 8:54 am on Oct 12, 2005 (gmt 0)

I haven't looked at PayPal for years because it used to be so bad. Having recently used WorldPay and HSBC (which is a pain when working with PHP - ask any OsCommerce user!) PayPal is looking much better these days.

You're right though about Google payments. Although, it's not good to put all your eggs in one basket...


 1:01 pm on Oct 12, 2005 (gmt 0)

Paypal has recently introduced their transparent credit card processing gateway for merchants and are trying to get them to switch their merchant accounts to Paypal. My guess is that they want the verisign customer base to now all be integrated with the paypal gateway. Plus now they own the entire vertical of both the gateway processor and the merchant accounts so they can collect all the fees in one entity.

We use VS gateway with a Bank of America Merchant account. Now I wonder if Verisign will force us to drop BOA in favor of Paypal. And at what price? Currently Paypal is expensive compared to large volume merchant accounts. Maybe this will result in some more cost effectiveness, although with Ebay as a parent never count on costs going down.


 1:54 pm on Oct 12, 2005 (gmt 0)

We don't use VS with BOA - we use it with Nova through Costco (very good deal). We just paid for two more years of VS.

I really doubt they'd make customers change their underlying bank - if they did, people would likely leave in droves. It's much easier to switch payment gateways than merchant accounts.

I just feel like we finally got a stable solution here. PayPal courts us constantly. We do take PayPal as an option, but we hate it - it's far too cumbersome for high-volume sales.

Let's hope that they really keep this unit separate.


 4:54 pm on Oct 12, 2005 (gmt 0)

Currently Paypal is expensive compared to large volume merchant accounts.

Out of curiosity, what rates are you using for comparison?

Keeping in mind that PayPal offers lower rates for merchants with higher volumes...

(Go to the PayPal home page and click the "Low fees" link to see the full rate table)

...how does that compare to what you would pay for your gateway plus your merchant account?


 5:14 pm on Oct 12, 2005 (gmt 0)

Been through this with a VP at PayPal ad nauseum:

-Visa/MC: generally 2.02% plus a small transaction fee from VS
-Amex: 2.99% plus same trans fee

If we did a ton of Amex, it'd be worth PayPal's 2.2%, and for us, it probably is at our current level. The problem isn't the money - it's dealing with PayPal.


 5:19 pm on Oct 12, 2005 (gmt 0)

> joestern

What happens when your transaction is mid-qualified or non-qualified? There is usually a surcharge that adds 1% or more to your processing rate. That needs to be calculated as well.


 5:33 pm on Oct 12, 2005 (gmt 0)

We have a higher rate of about 3.03%, but that occurs on less than 1% of our gross sales (by dollar volume).


 3:46 pm on Oct 13, 2005 (gmt 0)

how does that compare to what you would pay for your gateway plus your merchant account?

Paypal is 1.9% on over 100K per month which is a very good rate. However they also charge 30 cents per transaction which is high and their international rates are very high which make up a considerable amount of our business. The one benefit of PP is that when you refund a customer you get your fees back (as far as I know in all situations) rather than getting charged again like with a regular merchant account.

However as others have said, dealing with paypal both from a reliability standpoint, service standpoint and reporting capability would make it difficult under any circumstances to work with them.


 6:30 pm on Oct 13, 2005 (gmt 0)

I used Pay Pal a bunch for an ebay only business and it was awsome.


 11:36 am on Oct 15, 2005 (gmt 0)

PayPal is our savior if you ask me.

Probably the only one out there who has the ability to break the cartel.

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