We asked AuctionBytes readers to complete a survey last month, and the company sponsoring the survey is sharing some of the results. Newbury Payments is a new company that will offer an online payment service that will be funded with retail gift cards. The survey is helping Newbury Payments determine the features that experienced auction buyers and sellers are looking for in an online payment service.

The Results: Auction Buyers & Sellers

The online survey of AuctionBytes readers was conducted in October 2002. AuctionBytes publishes two free email newsletters for online auction users. The survey revealed that the majority of respondents both buy and sell on auction sites.

The majority of buyers (62%) buy between 1-10 items per month; 21.3% buy fewer than 1 item per month, and 16.3% buy more than 10 items per month.

A majority of readers (75%) buy "antiques/arts/collectibles." They also buy "computers/consumer electronics/business equipment" (46%); "new clothing/accessories" (28%); "real estate/tickets/travel" (13%); and "automobiles" (5%).

Sellers ranged from consumers or "casual" sellers posting fewer than 20 auctions per month (29%), to sellers posting between 20 and 79 auctions per month (31%), all the way up to Powersellers posting 80 or more auctions per month (40%). Of the Powersellers, 12% list a whopping 400+ auctions per month.

Online Payment Behavior

Interestingly, 88% of all respondents have a PayPal account. The majority of buyers (85%) use an online payment service to pay for online auction items. They use other methods as well, including money orders, personal checks and credit cards.

Buyers like using online payment services because of the convenience and speed. While sellers like accepting online payment services because of the convenience and speed, they dislike the cost.

Buyers dislike using money orders to pay for auction purchases because of the convenience and cost factors associated with using money orders. Sellers like accepting money orders because of the guaranteed payment and security. They dislike the speed factor in accepting money orders.

It was interesting to find that some sellers have experienced problems with online payment services: 10% of sellers have had a buyer do a chargeback on a purchase when using an online payment service, and 8% of sellers have had their account frozen by an online payment service due to a problem buyer or by error.

About the New Payment Service

Newbury Payments has partnered with retailers to use their existing retail gift-card system to fund prepaid online accounts. This enables consumers who do not have a PayPal account or a credit card to send payment to anyone with a PayPal account.

The prepaid account will be targeted at buyers who don't have or don't wish to have an online payment service account like PayPal; who don't have credit cards; who have security concerns; or who like using a prepaid account. The Newbury Payment will make paying for online purchases more attractive to people who may have been hesitant to use online payment services in the past.

Respondents liked the Newbury Payment features, including: Limited loss since not tied to a credit card or bank account; Ability to use PayPal without having a PayPal account; Account can't be frozen.

Thank you to everyone who took the time to participate in the survey last month. Newbury Payments told us their service will be better as a result of the AuctionBytes reader input.