Using BidPay in Online Auction Transactions
By Mark O'Neill
During some of my most recent surfing expeditions on eBay I've noticed more and more that sellers are accepting BidPay payments. BidPay is a service from Western Union, which started business 150 years ago sending telegrams and is now one of the biggest players in international money transfers. (Have you ever been stuck in another part of the world and your family wired you money to get home? Chances are they used Western Union to send you the money.) You can use Western Union's BidPay service to receive money orders as payments for your eBay auctions.
The BidPay.com website seems to have gone through various incarnations over the past few years, changing its domain name back and forth (at one time, they were auctionpayments.com). BidPay now seems to have settled down in the name department, and has developed a good reputation with sellers. I have used BidPay myself several times and I know many people on eBay who swear by them. PayPal is all well and good, but it helps to have a different payment option out there for anti-PayPal customers on eBay. BidPay is the perfect compromise. You get your money fast and easy, and you have the security of a well-known and trusted brand behind you.
So, the big question you're all asking - how does it all work? Well, first you need to sign up for your free account, but it is worth noting that sellers don't need to have an account to be paid by BidPay, since you receive a money order in the mail.
The buyer of course needs to be registered and would buy the Western Union Money Order through BidPay.com. However, there are advantages for a seller to be registered on the site since they can track the status of the money orders being sent to them. If you have several money orders on the way, it helps to have a status screen that tells you what's happening with each of them.
Sellers can advertise the fact they accept BidPay and get HTML secure payment logos for their auctions; the winning bidder can click on the logo and go to the BidPay site to complete their payment.
The buyer purchases the money order using a credit card or a debit card. A confirmation email then goes to both the buyer and the seller. U.S. sellers can have the payment sent directly to their checking account, which is faster, or they can opt instead for a paper money order to be mailed to their home address, which takes longer.
The major difference between PayPal and BidPay is that with PayPal, the seller pays the PayPal processing fee to accept the payment into their account. With BidPay, the buyer pays the processing fee. (BidPay's fees start at a hefty $1.95.) For sellers, BidPay is always free.
This is good for sellers, but buyers might balk at the thought of paying the minimum Western Union fee of $1.95. The only exceptions to the "always free for sellers" rule are "third party fees," such as your bank perhaps charging you an administrative fee to cash the money order, and if you want a money order in British pounds sterling instead of US dollars. In that case, an extra fee would be charged to convert the money order. But, as far as I can see, that seems to be the extent of any fees that might be incurred by sellers.
Currently, BidPay limits transactions to purchases of $1,000 (including the seller's shipping fee), regardless of the number of orders submitted. It's intended for buyers in the U.S., Canada and UK (http://www.bidpay.com/terms.asp). Sellers receiving money orders from BidPay should check with their bank to find out if there are service charges.
Here is the fee schedule, with payment amount and BidPay fee:
$10 and under: flat rate of $1.95
$10.01 to $30: flat rate of $2.95
$30.01 to $50: flat rate of $3.95
$50.01 to $100: flat rate of $4.95
$100.01 to $1,000: 2.25% + $4.95
The other thing to note is that buyers have no recourse from BidPay if they have a problem with the seller - BidPay is not an escrow service. As with all other payment services, you have to be careful about sending and receiving large payments, as BidPay is not immune to fraudsters. BidPay goes into the subject here http://www.bidpay.com/faqsecurity.asp.
The fraud scheme of the moment is to send a fake money order for more than the amount owed and then ask the seller to wire-transfer the extra cash back to the buyer. So as with PayPal, you can protect yourself by only accepting the amount owed, and if it is purchased through BidPay, the credit or debit card payment has to be authorized by the credit card company or bank before the payment is sent. The system isn't fraud-proof, but no system is perfect. Read the security FAQs before using the service.
Have you had any good or bad experiences with BidPay? Post a message in the forums http://www.auctionbytes.com/forum/phpBB/viewforum.php?f=3 and let other AuctionBytes subscribers know about it.
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