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Was Ebay’s BillMeLater Acquisition A Huge Blunder?

techcrunch.com — When eBay paid $945 million for BillMeLater in October, we blinked. The business assigns credit at the point of sale to ecommerce customers who can’t use credit cards because they don’t have them, have maxed out credit limits, or choose not to. It charges fees much like a credit card - currently 19% interest.

Who dugg this? Made popular Nov 26, 2008

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  • doublefelix, on 11/26/2008, -1/+22Hey BillMeLater, iaintpayinyou.
  • inactive, on 11/26/2008, -0/+15Not a huge blunder, people are still stupid enough to spend money they don't have.
  • wiirdo, on 11/26/2008, -1/+15$2.3B for Skype was a bigger blunder.
  • OuijaCat, on 11/26/2008, -0/+4"Do no evil" - huh?! - eBay is not Google
  • Sergej, on 11/26/2008, -0/+4Like my pappy always said,

    "Never underestimate peoples' stupidity."
  • inactive, on 11/26/2008, -1/+519% too high
  • phantomfiles, on 11/26/2008, -0/+4Exactly, So will BillMeLater be able to risk giving credit in this financial downturn?

    I really hope once we come through this 'crisis' people become used to only spending money they have.
  • lgyeresi, on 11/26/2008, -0/+4I've got a credit score of 765 and my credit cards just went up to 19.99% interest. I've never paid even 1 cents in interest though.
  • inactive, on 11/26/2008, -0/+4Which would be the death-knell of the economy.

    Borrowing to purchase is not bad. Borrowing beyond your means to repay is.

    How would one purchase even a modestly priced car or house? Or perhaps replace a suddenly dead appliance.

    I've paid cash for my past 4 vehicle purchases. And paid off the house 13 years early. But I still see the benefit of credit.

  • 919kwjc, on 11/26/2008, -0/+4Fail
  • kraftj, on 11/26/2008, -0/+4eBay has been one big blunder after another since they purchased Skype.
  • 919kwjc, on 11/26/2008, -0/+3That's the point... if they spend money they don't have... and NEVER PAY IT BACK then eBay gets hosed.
  • sdbyrd, on 11/26/2008, -0/+3I use BillMeLater all the time and I have perfect credit and credit cards. I take advantage of it when they have either 90 or 180 days of no interest. As long as you pay the balance in full before the due date you owe no interest.
  • czeman, on 11/26/2008, -0/+3Assuming this IS a blunder on eBay's part... isn't this just one blunder among many for them?
  • Ravenhaft, on 11/26/2008, -0/+3I hate these Digg articles that ask a rhetorical question, where you know exactly what the author's answer is going to be before you open the page.
  • figec, on 11/26/2008, -1/+4I think this makes good strategic sense for eBay. This acquisition is a classic example of vertical integration. BillMeLater allows eBay to get closer to the wallets of their consumers, cutting out Visa and Mastercard so that they can reap those fees eBay otherwise would have lost. The acquisition fits directly in to eBay's core strengths so it is not a diversion from any viewpoint. The amount eBay paid for BillMeLater probably was justifiable at the time, so in the context of today's market valuations it only seems overpriced. In the competitive landscape against the likes of Google's Checkout, this gives eBay a valuable advantage as it is a distinctive differentiating factor of their product. I'd look for Google to imitate this in the near future.
  • inactive, on 11/26/2008, -0/+3eBay is the new Yahoo!
  • geekworking, on 11/26/2008, -1/+4What a coincidence. Around the same time eBay told sellers that they could no longer accept offline payments. On Jan 15th, any auction (except for things like cars, houses, etc) will be ended if it offers offline payments (check, money order,etc).
  • smileylich, on 11/26/2008, -0/+2Ebay's traffic left with:

    1. Their "improved" fee structure
    2. Paypal-only payments (How does BillMeLater factor into this anyway? Are they going to allow it?)
    3. Assigned max shipping values to various sale categories
    4. Sellers having to keep their DSR's high on a 30 day scale (so a couple screwups in one month and you're out)
    5. Sellers can't leave anything other than positive feedback for buyers now (Why have feedback at all for buyers then? It is impossible for a buyer to have anything less than 100% feedback now)

    Um, that's all I can think of. And no, I'm not bitter, I'm a fool: I am still selling on Ebay.
  • Jeffler, on 11/26/2008, -0/+2Actually, internet traffic as a whole generally dropped since June or July. Look at digg, for example.
  • inactive, on 11/26/2008, -0/+2You use PayPal to pay BillMeLater
  • ZombieSociety, on 11/26/2008, -0/+2Wouldn't it be "people's?"
  • HareBall, on 11/26/2008, -0/+2@ unreg That would not cause the economy to collapse. You would save up to buy a car. You probably would need to borrow to buy a house. Those of us that are over 35 remember when our parents and Grandparents did it that way and the country grew very well.
    You are repeating exactly what the credit card companies want you to believe. They are the only ones who would suffer and then they would have to come up with a better way to make money.
  • kraftj, on 11/26/2008, -0/+219% interest is high for people with decent credit; but I would guess the people using this service are not exactly grade-A candidates for borrowing money...
  • grungegbunny, on 11/26/2008, -1/+3Yeah real men buy houses with cash.
  • globalthreat, on 12/05/2008, -0/+1Didn't know eBay was getting into the financial industry. I wonder if their going to turn into another too big to fail story? Maybe they want some of that free money we been giving away.
  • striker1211, on 11/26/2008, -0/+1I've started selling on Amazon because of the DSR and fee table ***** but some things just sell on ebay better, like lots and older items.
  • superstewy, on 11/26/2008, -0/+1"Bill Me Later says its default rate runs around 3.4 percent, while the general credit card industry’s is about 7 percent."

    Even though that's going to rise, based on past data it's still probably going to be lower than the default rate on credit cards. How much? Well that's something we'll have to wait and see.
  • hdrkid, on 11/26/2008, -0/+1Ebay want to force people to pay 19% interest. Well, guess what, people are leaving ebay. Good riddance to bad rubbish!
  • czeman, on 11/26/2008, -1/+2It is, but so are their auction fees!
  • bschonec, on 11/26/2008, -1/+1Wow, the current US Congress should talk to eBay about acquiring the rights. In the midst of this housing crisis where people can't afford to make payments, Congress is trying to make it easier for people to acquire credit. Go figure...
  • slapded, on 11/26/2008, -2/+2hey eBay.. I can haz internets traffik?? whered it go?
    http://www.alexa.com/data/details/traffic_details/ ...

  • mmittimm, on 11/26/2008, -2/+2What? You mean a superior system is outselling it's predecessor? This is big news!
  • johnvid, on 11/26/2008, -2/+1Sounds really dumb to spend that kind of money, why couldn't they just develop a similar system...rife for scamming, Now I know why the charges for selling will be going up.
  • inactive, on 11/26/2008, -6/+2Do no evil huh?!

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