ANAHEIM, Calif. - Calling her business model incomplete, Janet S. Crane, a vice president of eBay Inc. and the chief executive officer of its Billpoint subsidiary, on Thursday asked banks for help in building systems for the settlement of online transactions.
"People like eBay, Amazon - we are very real, and we need better payment mechanisms," Ms. Crane said in her keynote address at the Bank Administration Institute's Retail Delivery 2001 conference here.
Today, half of eBay transactions are settled by check, and most noncheck payments use credit cards. Ms. Crane said she wants to add an online debit system to handle low-dollar deals and a wire transfer mechanism for costlier things, such as cars and auto parts.
"Billpoint has made a good start, but we still have further to go," she said.
Later, speaking with reporters, she said: "We don't want to build a financial product - that is not eBay's business. We want to make auctions work better. The products that are available now are all we need."
Banks have dismissed eBay before. Three years ago, when the company was pioneering the concept of online auctions, executives got the cold shoulder when the approached the banking industry to develop payment systems for the new e-commerce model. So they built their own.
"People misunderstand us and think we're flaky," Ms. Crane said. "They think we will 'poof' and go away."
A big barrier for Billpoint is the industry's preference for hardware-based security for PIN debit transactions. These debit transactions require the physical presentation of a card, with the user typically keying in a personal identification number on a keypad, whether at an automated teller machine or the checkout line at a store.
Debit cards that bear the Visa and MasterCard logos, which require either a PIN or a signature in the physical world, can be used online, but not all banks issue this kind of card. Several systems for enabling Internet transactions with PIN-based debit cards have been developed, but none have hit the mass market.
"We can't get people to move off their historical position that they have to have hardware security," Ms. Crane said.
eBay would be amenable to working with processors using smart cards, biometrics, or other authentication systems, Ms. Crane said. But most consumers don't have card readers or thumb-print pads connected to their personal computers.
"I keep coming back to software, because it distributes very easily to anybody's PC," she said.
She said that the regional networks such as Pulse, NYCE, and Star "have the pipes in place. The one rule-change they need to make is hardware security."
eBay has had discussions with Concord EFS, the Memphis-based company that owns the Star network, about supporting online debit transactions, Ms. Crane said. "They're very interested in looking into it," she said.
Concord spokeswoman Melinda Mercurio said Concord has also been in discussions with a variety of companies exploring the possibilities of person-to-person online debit, but there are "no joint development projects that we are prepared to announce."
Some of the payment systems in use on eBay seem unaccountably slow to customers who expect to do their deals at Internet speed, Ms. Crane said. Transactions for bidders who write checks or money orders can take two weeks to close.
Though cards work fine for midsize transactions, such as books or clothing, they are poorly suited both for very small sales in e-shopping - Ms. Crane cited the $3 apple-pie recipe she bought on eBay - and for big-ticket items.
Transactions on eBay may be reaching volumes that banks cannot afford to ignore. eBay says its automotive sales volume is the third-largest online dealer in that category in the nation, behind the AutoNation network and CarMax.
