BidPay Is BackWritten by Evan Schuman
The old BidPay online payment service?which boasted more than 4 million registered users when it shut its doors in December 2005?has relaunched under the umbrella of new owner CyberSource. But the service has been significantly revamped.
CyberSource has a fondness for bargains, especially when the potential acquirees have as little negotiating room as possible. In September 2005, CyberSource swooped in to buy CardSystems Inc., the company that had the distinction of being responsible for what at the time was the worst example of credit-card information theft ever. CardSystems had kept the verification card numbers?which they are supposed to never retain?on file and also kept lots of other credit-card information on file without encryption. (I wonder if some CardSystems managers then took jobs at the Veterans Administration.)
After AmericanExpress and Visa cut its contract with CardSystems, the outfit was facing almost certain bankruptcy. So CyberSource swooped in to make a buyout offer. The offer was initially accepted, but later fell through and biometric company PayByTouch ultimately made the deal.
With BidPay, the company went through hard times and had to shut down in December. How strong a negotiating position is a company that had to shut its doors? This time, CyberSource made the deal and it stuck.
The new company will perform a little differently than its old version. With the new BidPay, for example, users will no longer be able to purchase money orders online. Sellers now pay for the service, in which deposits are made directly to their U.S. bank account. The company said this change was intended to “eliminate the wait associated with money orders.”
Another change, according to CyberSource, is that the new BidPay will be free for buyers. Last year, buyers had been charged a transaction fee. There will also be a BidPay instant payment notification to sellers, which the company said was supposed to minimize shipping lag time.