BidPay was an online auction payment service

Online auction business model

The online auction business model is one in which participants bid for products and services over the Internet. The functionality of buying and selling in an auction format is made possible through auction software which regulates the various processes involved.Several types of online auctions are...

 web site, established in 1999 by Steve Chin and Marek Bradbury that originally allowed auction buyers to purchase money order

Money order

A money order is a payment order for a pre-specified amount of money. Because it is required that the funds be prepaid for the amount shown on it, it is a more trusted method of payment than a cheque.-History of money orders:...

s online using their credit card

Credit card

A credit card is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services...

. BidPay was purchased by First Data Corporation/Western Union in 2001 for an undisclosed sum. BidPay was rebranded as "Western Union Auction Payments" in 2003 which led to confusion with Western Union

Western Union

The Western Union Company is a financial services and communications company based in the United States. Its North American headquarters is in Englewood, Colorado. Up until 2006, Western Union was the best-known U.S...

's wire transfer

Wire transfer

Wire transfer or credit transfer is a method of electronic funds transfer from one person or institution to another. A wire transfer can be made from one bank account to another bank account or through a transfer of cash at a cash office...

 services - popular with online fraudsters; the service reverted back to the BidPay name in 2004. BidPay ceased operations on 31 December 2005 and was purchased for USD 1.8 million in March 2006 by CyberSource Corporation

Cybersource

CyberSource is a provider of electronic payment and risk management services. CyberSource solutions enable electronic payment processing for Web, call centre, and POS environments. CyberSource also offers industry risk management services for merchants accepting card-not-present transactions...

, which announced its intention to relaunch BidPay. BidPay had over 4 million registered users worldwide.

BidPay was a popular payment method for auction sellers based in North America

North America

North America is a continent wholly within the Northern Hemisphere and almost wholly within the Western Hemisphere. It is also considered a northern subcontinent of the Americas...

 because there was no chargeback

Chargeback

A chargeback is the return of funds to a consumer, forcibly initiated by the consumer's issuing bank. Specifically, it is the reversal of a prior outbound transfer of funds from a consumer's bank account, line of credit, or credit card....

 or reversal risk, as there was with competing service PayPal

PayPal

PayPal is an American-based global e-commerce business allowing payments and money transfers to be made through the Internet. Online money transfers serve as electronic alternatives to paying with traditional paper methods, such as checks and money orders....

. The buyer was responsible for all fees, and US sellers had the option of receiving an ACH

Automated Clearing House

Automated Clearing House is an electronic network for financial transactions in the United States. ACH processes large volumes of credit and debit transactions in batches. ACH credit transfers include direct deposit payroll and vendor payments. ACH direct debit transfers include consumer payments...

 payment direct into their bank account. However, when a buyer successfully made a charge back, BidPay ended up taking the loss.

BidPay was relaunched in June 2006 based on an operating model similar to that of a merchant account

Merchant account

A merchant account is a type of bank account that allows businesses to accept payments by debit or credit cards. A merchant account is established under an agreement between an acceptor and a merchant acquiring bank for the settlement of credit card and/or debit card transactions...

for auction sales. Sellers were now responsible for all fees, and had to have a US-based bank account that accepted ACH payments, since money orders were no longer issued. Before approving payment, Bidpay reviewed payments submitted via various fraud checks. Also sellers now had to ship by a track and trace shipper and Bidpay would assume the risk of chargebacks if the seller followed all the requirements under the user agreement.

BidPay.com, Inc. again discontinued operations on December 31, 2007.