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Under the deal, the online auctioneer will combine its Billpoint payment system with the banking company's expertise in the payment processing and customer services area to ensure quick, secure completion of its customers' Internet transactions, the companies said in a statement.
eBay acquired Billpoint, which enables person-to-person credit card payments over the Internet, last May. eBay has been beta testing its Billpoint credit card payment service since the fourth quarter of last year and plans a full-fledged launch for the second quarter of 2000.
"We believe this payment solution could significantly speed up the velocity of eBay's businesses, as 98 percent of transactions on eBay are completed by check or money order today," Susan Walker White, an analyst at investment bank JP Morgan, wrote in a report today. "The ability to pay by credit card would speed the transaction process up, help users feel more secure about buying online."
White added that higher-priced transactions may become more common because of the added feeling of security from buying with a credit card.
As part of today's deal, Wells Fargo agreed to purchase a 35 percent equity interest in Billpoint from eBay, pending regulatory approval. Wells Fargo also entered into a long-term payment processing and customer service contract with Billpoint.
A number of auction sellers already accept credit cards but require buyers to send their account numbers via email or over the phone. Billpoint will allow buyers to pay for their items directly online, in the same way, for example, that they would buy a book from Amazon.com.
Amazon last fall introduced a similar payment service to allow its auction and zShops sellers to accept credit cards online. Last week, Internet incubator Idealab launched PayMe.com, a new online bill payment service that allows consumers and small-business owners to send bills to other consumers. The bill recipients can pay the bills using a credit card at PayMe.com.
