Yahoo is shutting down PayDirect, an online payment service similar to eBay's PayPal.
In a notice on
the service's Web site, Yahoo said it will begin to shutter the service on Nov. 22. Beginning on that date, the Web portal will no longer let people open new accounts or send and receive payments from non-PayDirect users.
Transactions prior to Nov. 22 will be processed if the recipients accept the payments within 30 days. After that, Yahoo will cancel all payments. People will have until Feb. 15, 2005, to withdraw unused funds and check transaction records. By May 15, the entire site will shut down, the notice said.
"We are discontinuing PayDirect as part of our efforts to focus the company on core priorities," Yahoo spokesman Brian Nelson said Friday.
Since then, Yahoo has retreated from parts of its auctions business. In 2002, the company said it would close its European auction business and point its customers to industry giant eBay. Yahoo still runs its United States-based auction site and accepts PayPal payments.
PayDirect has gone through its own share of changes. The service was originally free, but Yahoo began tacking fees onto the service in 2001 to expand its nonadvertising revenue. Eight months later, it retreated from its mandatory fees and restored PayDirect as a free service.
They already, earlier this year, made an announcement that they were going to charge a fee just to even have a Yahoo! PayDirect account. This fee, IMO, made the costs prohibitive unless one was, perhaps, selling quite a bit of merchandise via PayDirect on a regular basis or had a great desire to use PayDirect's international money transfer features.
Therefore, my own analysis basically gave me the impression that they were no longer intending to even pretend to compete with PayPal, and instead wanted to only serve a specific segment of existing customers. I suppose that segment wasn't enough to justify going forward with the service.
It's a shame, because their fee (at least for a while) was a bit cheaper for the average seller than PayPal was, and it had the backing of a major web brand name (Yahoo!) but I only ever had maybe one customer pay me with the service over the whole time I offered it as an option.
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Therefore, my own analysis basically gave me the impression that they were no longer intending to even pretend to compete with PayPal, and instead wanted to only serve a specific segment of existing customers. I suppose that segment wasn't enough to justify going forward with the service.
It's a shame, because their fee (at least for a while) was a bit cheaper for the average seller than PayPal was, and it had the backing of a major web brand name (Yahoo!) but I only ever had maybe one customer pay me with the service over the whole time I offered it as an option.