Billpoint

» see billpoint.com as it lived, on the wayback machine

~ the last words ~

payments stayed american longer than anything else on the web. a turkish user in 2001 could reach every page ebay served and could not complete a single one of these transactions, because the plumbing underneath ran through a us bank account and a us card issuer and neither of those was available. billpoint is a grave i can research but cannot remember, and the reason is not obscurity. it is that the whole product lived behind a border.

it started in october 1998 in redwood city, founded by a group that included sang young lee and jason may, with sequoia money arriving in february 1999. the idea was person-to-person card payments for auction buyers, so a stranger could pay another stranger with a credit card without either of them being a merchant. ebay bought it later that same year and took the site down while it wired the thing into the auction flow.

it came back in 2000 as a joint venture with wells fargo, which supplied the banking side. that gave billpoint the two things a payments startup is supposed to spend a decade fighting for, a real bank and distribution on the biggest marketplace there was. it had both from day one and it still lost.

~ the record ~

~ the early days ~

paypal grew inside ebay without permission. sellers pasted the logo into their own listing descriptions because buyers already had accounts, and every listing that did that was free advertising for a competitor on ebay's own property. billpoint had the official button and paypal had the sentence in the item description, and the sentence won.

the reason underneath was boring and financial. almost every billpoint payment settled on a credit card, and card interchange has a floor that ebay could not price below without losing money on each transaction. paypal had spent years pushing users onto bank-account transfers, and roughly a quarter of its volume moved over the automated clearing house at a fraction of the cost. that difference funded lower fees, and lower fees is what sellers were choosing on.

~ the day it died ~

by mid-2002 something like seventy percent of ebay sellers accepted paypal. meg whitman stopped fighting it and agreed in july 2002 to buy the company for 1.5 billion dollars, closing that october. the wind-down of billpoint ran on a schedule after that. it disappeared from new listings that january and came off ebay motors in february. the site itself went dark on 30 april 2003. billpoint.com now redirects to ebay.com, which is the acquirer keeping the address and pointing it home.

~ what got buried with it ~

the lesson people took was that distribution beats product, and billpoint is the counterexample nobody quotes. it had the distribution. what it did not have was a cost structure, and in payments the cost structure is the product. sixteen years later ebay unwound the whole thing anyway, ending the paypal arrangement and moving to adyen, which means the marketplace spent two decades getting back to owning its own checkout.

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