Bill Gates announced at the World Economic Forum in Davos, Switzerland that Microsoft will become a player in the online payment industry. He described a system that would undercut credit card fees, making it profitable to even charge small fees for individual web based contents, services and products. This could be really good news for many of our higher volume sellers, considering their PayPal fees alone takes up a significant chunk of their margins. While avoiding PayPal fees would be a huge incentive for sellers, it will also adversely affect one of eBay’s key revenue streams. As we pointed out in a recent post, it will be one of eBay’s 2007 priorities to have every seller on eBay use PayPal (not by choice mind you). With this in mind, it is hard to see them allowing Microsoft into the eBay MarketPlace. On a positive note for sellers, even if eBay did not allow sellers to use Microsoft's payment solution, they may still have to reduce their PayPal fees to avoid losing upset sellers in the long run. It's safe to say that Bill Gates did sellers a favor by choosing this industry to tackle.
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