eBay Inc. repurchased Wells Fargo's equity stake in Billpoint, eBay's payment subsidiary, for $43.5 million. eBay and Wells Fargo formed a strategic relationship in March 2000 to provide eBay's buyers and sellers with its first integrated online payment service. At the time, Wells Fargo acquired a 35% equity stake in Billpoint.
Wells Fargo will continue to support eBay Payments by Billpoint through its payment processing and risk management services. "The increased integration of Billpoint and eBay over time makes this stock repurchase very attractive for both Wells Fargo and eBay," said Janet Crane, CEO of Billpoint. "We're pleased that our strategic relationship with Wells Fargo will continue, helping us deliver the fastest, easiest and safest payments experience
available."
Yisroel Goodman, who covers the online payment service market and moderates the Auction Services Forum on AuctionBytes.com, said eBay is taking advantage of PayPal's current woes. "It's a good time to try to grab more
market share," Goodman stated. He opined that Citigroup's c2it online payment service is the only other real contender with the means to play in this arena, but says "it is asleep at the wheel."
PayPal is an online payment service that became popular with online auction buyers who sent payments to sellers electronically; the PayPal service launched in October 1999 before eBay launched its Billpoint payment service. PayPal is facing numerous lawsuits and recently disclosed that the
states of Louisiana and New York had expressed the view that PayPal's service constituted an unauthorized banking business in their states. PayPal shares closed at $15.01 at the end of trading yesterday; it went public last Friday, having priced its shares at $13.
