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EcommerceBytes-NewsFlash, Number 618 - September 30, 2003 - ISSN 1539-5065    1 of 2

Another One Bites the Dust: PayPal Competitor c2it to Close

By Ina Steiner
September 30, 2003

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A CitiGroup spokesperson confirmed that the c2it online payment service will cease operations next month. c2it will close all customer accounts effective November 9, 2003, and will send remaining funds by check to customers. The site will be taken down on February 22, 2004.

Citi Cards launched c2it in October 2000, offering a service for users to transfer funds to other members electronically. The c2it spokesperson said the service was attractive only in the auction space. "This was a niche that c2it chose not to pursue and has not marketed to for more than a year."

c2it was never able to gain the same traction as PayPal and had stricter limits on daily transactions amounts, possible due to concerns over fraud. Forbes reported last year that C2it attempted to acquire PayPal but was rebuffed. eBay bought the PayPal online payment service in the fall of 2002 and shut down its own Billpoint payment service shortly thereafter.

Another option for buyers who want to pay for auction purchases electronically is Western Union Auction Payments (formerly BidPay), which offers the ability to purchase money orders electronically. CheckFree entered the space this summer with a service that allows buyers to settle eBay purchases directly from their checking or money market accounts. Smaller services include PayingFast (the Western Union model) and ProPay (similar to Checkfree's model).

Meanwhile, some eBay users were upset Monday because of a change eBay made to its Payment Preferences page. eBay renamed the "turn off checkout" setting to "show pay now button for PayPal only."

Checkout is the feature that allows buyers to complete an order after an auction has ended or a fixed-price order has been placed. Checkout replaces the shopping cart feature typically found on ecommerce sites.

Some eBay sellers thought the recent name change meant eBay was making it impossible for sellers to turn off Checkout from their preferences. But for a long time the "Pay Now" button has appeared for sellers who set their preferences to accept PayPal.

A spokesperson said, "PayPal and eBay didn't change any of the functionality; we merely changed the name of the preference. Turn off checkout is now called "Show Pay Now button for PayPal only."" Checkout is a sore point with some sellers after eBay initially made it a mandatory feature and it caused conflicts with third-party software when first introduced.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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