EcommerceBytes-NewsFlash, Number 2852 - July 20, 2012     5 of 5

Paymate to Cease Ecommerce and eBay Payment Processing

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eBay sellers in the U.S. have few choices when it comes to accepting payments other than PayPal, and at the end of the month, they'll have even fewer. News came late this week that Paymate USA will cease offering payment processing services to all customers after July 31, 2012.

Paymate CEO Greg Lewis said business conditions were such that it didn't warrant continued investment providing ecommerce transactions and said Paymate was now focused on mobile commerce.

Lewis told EcommerceBytes that Paymate merchants would not have any problems with existing and past transactions - the company is solvent and is not closing, he said, and the company has access to all customer records and will work with both buyers and sellers who have questions beyond July 31st. Paymate has also communicated with eBay, according to Lewis. EcommerceBytes was unable to reach eBay by press time for confirmation.

Paymate was founded in 2000 in Australia and moved its headquarters to the U.S. in 2009. Paymate decided to get into mobile commerce after it merged with ACT Merchant Services last year, whose core competency is offering devices and infrastructure necessary to transact business utilizing smart phones and other mobile devices. Paymate then sold its Australian business, Paymate Pty Limited, to FlexiGroup.

Paymate has had its share of problems. In 2010, Paymate's financial partner held sellers' funds for up to 6 months. Objecting to the way the partner handled matters, Paymate moved to a new bank processor, which did not approve all of Paymate's existing customers, adding to customer frustrations. (See this October 2010 news story.)

Greg Quinn, Paymate's Executive Vice President of Sales and Client Services, said Paymate has reached out to its top 100 merchant customers by telephone and an announcement would be going up on the Paymate website over the weekend. He forwarded the body of the email sent to customers this week informing them of the company's decision to stop offering ecommerce payment processing services (his cell phone number is redacted below):

First, we would like to thank you for your business and loyalty in the past. As you probably know, in March of this year all of Paymate Global assets existing outside the United States were sold. Within the current operating environment we regrettably must inform you that we, PaymateUSA, will no longer be able to process payment transactions after July 31, 2012.

For client support on transactions prior to July 31, 2012 please direct your inquiries to gquinn@paymate.com. If you would like to speak with us directly please call 650-216-9561, option 1. If you donít reach someone "live" please be sure to leave a voicemail so we can return your call. If your situation is urgent please feel free to call me directly at 408-xxx-xxxx. Thanks again for the opportunity to serve you, and we appreciate your understanding.
Greg Quinn
EVP, Sales and Client Services
PaymateUSA

Paymate's departure from eBay means PayPal and Skrill are virtually the only methods of payment for small sellers. eBay sellers in the U.S. must abide by the company's accepted payments policy, originally called the safe payments policy. In addition to its own PayPal service, merchants may offer in listings to accept credit cards through their own merchant accounts or through ProPay, or they may accept Skrill, a UK service formerly called Moneybookers.

Aside from "payment upon pick up" for local transactions, sellers may only advertise electronic payment services, which are also required for seller protection eligibility.


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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