Online marketplace eBay has repurchased a thirty-five per cent equity stake in person-to-person payment subsidiary Billpoint from Wells Fargo for $43.5 million.
EBay and Wells Fargo formed an alliance in March 2000 to provide buyers and sellers at the online auction house with an integrated payment service. At the time, Wells Fargo acquired a 35% equity stake in Billpoint.
Yet despite the heavyweight backing of Wells Fargo and eBay, Billpoint has struggled to catch up with PayPal, the market leading system. According to figures from Gartner PayPal is used by 27% of online consumers - 2.5 times as many as Billpoint with 11%.
EBay says that nearly a quarter of all listings on its site offer Billpoint as a payment option. Billpoint also holds a clear lead over its nearest competitor Yahoo!Direct, which according to Gartner figures has a three per cent market share. Citibank's c2it lags with just one per cent of users says Gartner.
"The increased integration of Billpoint and eBay over time makes this stock repurchase very attractive for both Wells Fargo and eBay," says Janet Crane, CEO of Billpoint.
Wells Fargo will continue to support eBay payments by Billpoint through its payment processing and risk management services.