Online Auction Payment Processing
Online auctions are responsible for making ecommerce what it is today. Ebay was one of the great pioneers in the industry of online auction merchant processing. In 2000, it had the most registered users on the internet. With a huge following, customers needed a way to find trust credibility through online credit card payments.
An auction merchant account began as the first major high risk solution for an established online business. Buyer protection soon became an essential part of the process. It reassures users and helps guarantee safe payments and product delivery. If a customer wasn't happy with their purchase, they could receive a refund.
With peace of mind on the buyer's side came an equally important feature, merchant protection. Friendly fraud as it's called now quickly rose as scamsters learned how easy it was to get a refund and keep the product.
Modern Online Auction Payment Processing
Unlike Ebay who integrated with PayPal, payment processing for auction merchants is "high risk". Auction sites cover everything from penny auctions to quick game-style based apps. The goal is to allow merchants to post their goods online and have a large audience bid for them. The larger the audience, and the more in-demand the item, the more they will make per transaction.
Appealing to specific product niches is key for online auctions. Ebay is a conglomerate that sells all types of legal products, but when it comes to hosting certain restricted items and providing payment solutions, their resources are limited. In turn, new companies are thriving to support auctions for alternative items. For example, CBD, Adult, and Firearms each have their own respective audiences which may not be allowed on Ebay.
With conglomerates out of the picture for high risk companies, new types of online payment options are available. Unfortunately, mainstream providers like Square and Stripe don't allow certain types of auction merchant accounts. The solution – custom payment processing specialized for this specific industry.
Types of Online Auctions
Auction businesses date back to 500 BC where families would sell the rights to marriage to the highest bidder. Much has changed in two and a half millennia, but the concept of selling to the highest bidder remains the same.
Nowadays, there is a vast array of interesting types of auction companies. The allure is not just a buyer getting a discount, but the thrill of the competition and the feeling of victory.
Ebay remains the single most popular auction business. Nonetheless, others emerged to place their bid against the internet giant.
- Ubid has over 5 million users. It was created in 1997
- Ubid is a UK based company. They create discounts on product for up to 89%
- eBid sells products in over 13,000 categories. Their sales fee ranges from 0% – 3%
Auction Payment Gateway
With such a range of auctions gaining popularity online, entrepreneurs are searching for the right niche in the industry. With a new website and a user-base, it's essential to have the right payment gateway to connect your website with your auction merchant account.
More than a gateway solution, credit card processing, and even cryptocurrency will be prudent to offer as a means of payment on your site. Customers want options when it comes to the checkout lane, and having robust and sustainable solutions is key for keeping your auction business growing.