Intuit Offers eBay Bucks Incentives for Mint, TurboTax Trial

image While I don’t use eBay for entertainment much any more, I still pick up the occasional used item now and then. And I love the rewards program which began about two years ago. It works like it should, with no qualification hoops to jump through or byzantine rules to discourage redemption (note 1).

Users accrue a 2% cash-back bonus, called eBay Bucks, for three months. Then they have 30 days to spend it on the site. When paying for a subsequent purchase, the eBay Bucks are automatically used first, with any remainder shunted off to PayPal for authorization.

It’s all well integrated and transparent. eBay even emails you multiple times as the spending deadline approaches.

They company also provides ways to earn extra eBay bucks. Today, for example, they offered an extra fiver if you bought something worth $100 or more.

In addition, outside brands can make offers on the rewards-summary page as well. The current featured offers (for me anyway) are from Intuit’s and TurboTax units. Users receive one eBay Buck for signing up for Mint and two for using TurboTax. There are 36 offers altogether, paying up to 15 eBay dollars (People Magazine). All offers are powered by TrialPay. Two others are financial:

  • (Experian): 10 bucks
  • Credit Karma: 1 buck

Side note: The eBay rewards implementation is a good example to simulate when designing your own in-statement rewards program.

————————————– offer displayed in eBay rewards program area (16 Feb 2012) offer displayed in eBay rewards program area

Close-up of Intuit offers

Close-up of Intuit offers on eBay rewards page

Landing page powered by TrialPay (link) offer fulfillment page powered by TrialPay


1. I did fail to redeem my cash-back horde the first time, because I didn’t realize there was a 30-day redemption deadline. But not before eBay sent multiple messages reminding me of the pending deadline. 
2. For more on in-statement rewards programs for banks, check out our Online Banking Report on the subject (published Feb. 2011).

Giving the Gift of Microfinance: 2008 Update

image With capitalism bruised and battered in the past year, it’s more important than ever to teach our friends and family about the ultimate upside of business and commerce, the potential to lift families out of poverty permanently. And the need is high, as always.

Unless you have your own personal foundation, there is no better way to do that than by spreading a bit of your wealth around the globe through microfinance companies such as, eBay’s MicroPlace, and a host of others.

This holiday season the major microfinance companies are making it easy to spread the word, and the money, with gifting options. And with Christmas just a week away, here’s a last-minute option that doesn’t require a trip to the mall. 

Kiva <>
Kiva is using the same approach as last year, but with an updated paper gift certificate (see below) that can be printed and given to the recipient or sent directly through email. It’s a simple solution that works fine for its rabid fan base. The homepage (below) features a prominent link to the gift page and a counter across the top tracks number of certificates purchased this week (more than 13,000!).

MicroPlace has a snazzier gifting landing page (see below), not surprising given its eBay backing. The microfinance nonprofit is promoting gift options heavily across the Web, with a large banner last week on the search results page at (see below) and a costly top banner and right-side skyscraper ad on TechCrunch yesterday (see below).

Microplace is spurring giving with a small Chilean piggy bank that will be sent to the recipient along with an e-card (givers can choose not to send the bank). But the big difference with Microplace’s gift program is that it’s only a “gift in your honor program.” That means the giver chooses the entrepreneur to invest in, rather than the recipient. That gets the money invested faster, but it’s not as satisfying a learning experience, either.

Final comment: There’s not much here that needs improvement. But I do think it would be better to let the giver decide whether they want the recipient (of the gift card) involved in choosing who gets the micro loan. 

And financial institutions: Here’s a great cause to get behind. Not only does it make a difference, it shows you support the small business community.

Kiva homepage features gift option (17 Dec 2008


Preview your gift certificate before sending (17 Dec 2008)


Microplace ads at Barnes & Noble (early December 2008)

 image       image

Banner on top of TechCrunch (16 Dec 2008)


 Microplace gifting landing page (17 Dec 2008)


eBay Acquires Bill Me Later for Almost $1 Billion

image I won’t belabor the irony that the nearly $1 billion ($945 million) paid by eBay for Bill Me Later values the alternative payment and credit provider at more than Washington Mutual Bank and nearly half as much as Wachovia, at least before Wells Fargo entered the bidding.

The underlying credit product is relatively simple, a 19.99% credit account underwritten by Utah-based industrial bank CIT (terms and conditions here, see also note 1). But the distribution system, providing quick-and-easy delayed payment at the point-of-sale at 1000 online merchants, is what created the billion-dollar valuation. To use Bill Me Later at checkout, consumers simply provide their birthdate, last four digits of their social security number, and their billing address (see screenshot below).

According to today’s investors presentation the company will do more than $1 billion in transaction volume in 2008 and serves 4 million customers (see note 2).

I was initially surprised at the price ($945 million), but given that eBay is projecting $150 million in revenues and $50 million in profits, it makes some sense, especially if CIT is taking most/all of the credit risk. Hoped-for synergies with PayPal, which already operates a similar program, is the stated upside for the deal.

Ebay says Bill Me Later earns 4.1% on each payment transaction, which amounts to $10 per $250 purchase (note 3).  

Bill Me Later’s simple signup demonstrated at Amazon’s checkout
(5 Oct 2008)

Bill Me Later signup at (5 Oct 2008)

1. CIT is not without its own problems with a market cap that has dropped more than 80% from a year ago. The company is now valued at $2 billion, just double the purchase price of BillMeLater.

2. Some historical usage numbers: An undated entry on the CIT website says that BillMeLater has served 2.5 million consumers. In a Dec. 2006 press release announcing $640 million debt-financing from Citigroup, Bill Me Later said it had served 2 million consumers.

3.  Here are the revenue and cost numbers taken from today’s investor’s presentation (expressed as percent of transaction amount):

Transaction fee from merchant = 2.4%
Customer interest = 6.5% (note APR is 19.99%)
Customer fees = 3.6% (note late fees are generally $29 or $39 depending on balance)
Total revenue = 12.5%

Acquisition and servicing = 2.9%
Net credit/fraud losses = 3.4%
Cost of funds = 2.1%
Total cost = 8.4%

Net profit = 4.1% of transaction amount

Zions Direct Uses eBay to Auction New-Account Vouchers

Link to Zions eBay store While not the first bank to experiment with eBay auctions (see note 1), Zions Direct is the first to open a dedicated site within eBay and the first to sell "new-account vouchers" (see screenshots below).

Apparently the vouchers, listed in the gift certificate category, skirt eBay rules against auctioning financial services. The buyer of the certificate can redeem them for a cash deposit into their Zions Direct brokerage account. Zions Direct also auctions CDs every week directly on its website (see previous coverage here).

Bidding starts at $0.99 for the vouchers which range in value from $500 to $1,000. Bidders can pay via PayPal or check. The amount of the voucher is deposited directly into the buyer's Zions Direct account, which is required to redeem the voucher. So not only are buyers receiving cash at a discount, they also can earn frequent flyer miles and a free grace period if their PayPal account is connected to a rewards credit card. There is no requirement that buyers be new customers, nor are their limits on how many certificates can be purchased. In fact, bidder shecdoggy bought 5 of the vouchers totaling $4,000 at a total discount of $72.50.

So far the bank has sold 16 vouchers worth at total of $12,800 to 9 unique bidders for an average of $12.50 less than face, a discount of 1.6%. And there are currently 10 vouchers up for auction (see screenshot below). As more people have caught on, the spread has been reduced to less than 1% on recent auctions (see past and present listings here, Zions Direct eBay store here).   

From a marketing perspective, this is brilliant, at least in the short run. For a cost of $15.95/mo for a basic store, and $30 to $40 per voucher (mostly in eBay/PayPal fees), the bank gets its name on eBay, numerous mentions in blog posts and press stories, a cool ad on its homepage (see screenshot below), positions itself as innovative and provides customers a nice little spiff.

Long-term, however, the terms will have to be adjusted or the bank will just be handing over easy money to the "gamers." The certificates will be purchased at face, or slightly over, by existing customers who rack up frequent flier miles and a do a little interest arbitrage during their credit-card grace period. The bank will need to lower the amount of the vouchers to $100 to $200 to reduce the potential for gaming, or if possible, restrict purchases to one per customer. Another cost reduction tactic would be to disallow PayPal payments, but that would reduce the effectiveness of the promotion. 

Zions Direct Auction Listing


Zions Direct eBay Store



Zions Direct Homepage (18 Jan 2008)



1.  In the late 1990s PNC Bank was the first to try CD auctions. In 2004, WaMu used eBay technology in a market test (see previous article here).

Future Friday: CD Auctions at Zions Direct

Several banks, including PNC in the bubble days and WaMu through eBay in early 2004, have tried auctioning certificates of deposit (see Online Banking #104). Those first attempts were aimed at retail depositors, an unlikely audience for a several reasons. First, the demographics of retail CD buyers is decidedly older and they tend to be fiscally conservative, not the right group for a new-fangled way to buy from the bank. On the other hand, CD auctions are a great way to introduce a bit of Web 2.0-style innovation into what is mostly a commodity.    

Zions Direct: Results of Mar 27 CD auctionSo Zions Bank, through its Zions Direct division, has chosen a different path. Instead of creating an eBay-like environment for retail investors, it is using its non-bank investment division to sell CDs like the Treasury Dept sell t-bills. The certificates are sold at a discount to par, resulting in an acceptable yield for the bidders. 

While PNC and WaMu's efforts were clearly just market tests that were shuttered after a few months, the Zions auction platform is full-featured. It appears to have staying power provided the bank is comfortable with the prices its paying. 

Clearly, this is not a retail playground. There were 20 bidders making a total of 28 bids with a median bid dollar amount of just $10,000. However, there were three huge bidders, all playing with $2 million in cash, that set the final prices. Most likely it was someone in a large company treasury department looking to increase its yield on excess cash by a basis point or two.   

But even though the big money sets the rates, the small depositors can still win since everyone received the same "market-clearing" rate. For example, four of the 14 winning bidders in the March 27 auction were small CDs of less than $5,000:

Winning bidders by size of deposit:

  • 4 had $1,000 to $4,000 
  • 5 had $8,000 to $20,000
  • 2 had $90,000 to $100,000
  • 1 had $200,000
  • 1 had $536,000 (partial fill of $2 million bid)
  • 1 had $1 million (they also had non-winning $2 million bid)

It makes sense to set rates for large deposits this way. It mimics the way the capital markets already function. And it allows motivated smaller depositors to join the "action," receiving what they are likely to perceive as a fair price since it was set on the open market. Some day, the majority of CD dollars will be sold this way.

Finally, an added bonus for the first-mover, it positions Zions as innovative, fair, and looking out for its customers. The word of mouth and press attention should quickly pay back the investment Zions made in the platform.

More information:

  • Press release here
  • American Banker article here
  • Online Banking Report #104 here


Zions March 27 CD Auction Results
(see screenshot right or view archived page here

Product: $2,000,000 in 5-month CDs

Bidders: 28 bids from 21 bidders

Final Price: 5.506% rate

Start date: 20 Mar 2007

End date: 27 Mar 2007 (6 PM EDT)

Discussion: Two $2 million bidders tied at the market-clearing rate, one ended up with a partial funding of $537,000 and one ended with zero, so had Zions made more money available, it could received total deposits of $3.6 million at 5.506% rate.

Fee Income Opportunities from SMS Alerts

Ebay_logo_1While most banks in the world charge fees for at least some aspect of online banking, the service has been almost entirely fee free in the United States, at least ever since Bank of America rolled out free bill payment in 2002.

At first glance, it seems like a great deal for consumers; however, the lack of direct revenue has hampered investment in the channel and deprived U.S. customers from the more sophisticated services common throughout the world, such as SMS alerts, multi-factor log-in controls, and so on.

Ebay_sms_alert_mainWe're always on the lookout for fee-based opportunities (see Online Banking Report 122/123 for a laundry list of online fee opportunities), and we are encouraged by eBay's latest innovation, SMS auction alerts with a fee of $0.25 per auction. This is the first time eBay has attempted to charge fees to bidders. The site has offered free email alerts since the beginning.   

Here's how SMS alerts work (see screenshot below):

  1. Ebay_sms_alert Select "Get SMS alert" (see red circle in screenshot at above, click to enlarge).
  2. Select mobile phone provider from drop-down list and enter mobile phone number; currently Cingular, Verizon, Nextel, Alltel, Sprint, and TCRcom participate
  3. Check "Watched item ending alert" or "Outbid alert"
  4. Click "Continue" which initiates a confirmation message to the user's mobile phone
  5. Send a text-message reply from the mobile back to eBay to agree to the charges

SMS-alert users pay $0.25 for each auction entitling them to up to 10 alerts. Each 10 thereafter cost another $0.25. It would be unusual for the number of alerts to exceed 10. After receiving an alert, users can submit a new bid via text message by responding to the text message with their new bid amount. Bidding can be protected with an optional PIN.

Instant messaging alerts work in a similar manner (click on screenshot for closeup):

  1. Ebay_im_alert_main_1 Select "Get IM alert" 
  2. Select IM provider; eBay supports the big three: Yahoo, AOL, MSN
  3. Check "Watched item-ending alert" or "Outbid alert"

There are no fees for IM alerts. After receiving an IM alert, users can submit a new bid via the provided link.

In addition to SMS-alert links in the main auction listings, successful bidders are also prompted to set up an alert on the bidder's confirmation screen (see below).


What it means for financial institutions
There is no reason why banks cannot charge for triggered alerts. Unlike account access, alerts are a value-added service with no sQwest_premium_menuimilar "free counterpart" in the offline world. You don't see telecom giants giving away any of their specialized services such as caller-id, custom ringing, call forwarding and so on. Banks should work on developing premium service bundles. For inspiration, take a look at your local phone provider's website (see Qwest screenshot right).


Ebank_ambankerOn the front page of today’s American Banker and on the cover of its Retail Delivery pullout section (see inset), there is an eye-catching EBANK logo presented in eBay’s distinctive font. It’s an intriguing lead-in to an otherwise predictable story on eBay’s PayPal unit and the extent to which it competes with banks. (Note: For American Banker, the cover graphic gave it more "street appeal" so that the paper was more likely to be picked up by the thousands of attendees at BAI’s big technology conference in Orlando.)

This is an old story. PayPal has offered a suite of consumer banking services for more Payment_choices_1than four years (click on table below) including debit cards, bill payment, credit card (issuer), consumer finance loans, credit card processing, ACH processing, money market mutual funds, international payments, interbank transfers, fraud protection, and insurance for funds on deposit. The only new service this year is the credit card payments gateway business it purchased from VeriSign earlier this year; though that is more of a line extension than a new business.

Paypal_timelineYes, PayPal competes with bank, primarily in merchant processing, an area most banks got out of more than a decade ago. And we’ll see more ecommerce players, such as domain registration services company GoDaddy, offering integrated PayPal payment options (see inset). However, none of PayPal’s other financial service offerings have a measurable market share, and are unlikely to be causing any lost sleep by execs at Bank of America, Citi, or any other financial institution.

The American Banker article speculated on eBay’s interest in moving further into banking by buying a charter and opening a full-service Internet bank. But no evidence was presented for either side of that argument, nor did the author find any industry analysts to comment.

It reminds me of the "controversy" in the mid-90s about Microsoft competing against banks. Although it was mostly fodder for the trade press, we debunked the notion In the very first issue of Online Banking Report (April 1995). There was no way that a successful software company, accustomed to 50%+ margins, would invite the regulatory scrutiny and compliance hassles of the relatively low-margin banking business.

Although eBay has done some strange things, such as jumping into the telecom business via its recent Skype acquisition, we seriously doubt that the auction giant has any plans to open or even lend its name to a full-service Internet bank. It doesn’t need those regulatory and compliance headaches.

However, the company will continue to exploit areas of ecommerce, like auction payments and auction purchase financing, that are not well-served by existing players. But if you’ve put together a franchise that can hold its own against BofA/MBNA, ING Direct, and Schwab, you have little to fear from eBay or Microsoft. In fact, there are opportunities to leverage these trusted brand names to INCREASE your revenues. For example, PayPal provides developer tools that would allow a bank to integrate with the online payments provider to facilitate financing for bank customers.

Previous articles:


eBay Motors’ FOR SALE Sign Direct Mail

Ebaymotors_protectionsLooking for a way to boost your market share in direct vehicle lending? Consider setting up an online used car emporium either using eBay as the transactional platform (recommended) or programming the site yourself.

Even though you could do it yourself, it would be difficult to match the auction giant’s powerful set of FREE buyer protections including (click on inset) including:

  • Purchase Protection: Reimburses up to $20,000 for fraud and material misrepresentation after a $100 deductible
  • 30-day, 1000-mile Service Agreement: Provides a 30-day warranty on major breakdowns on most cars under nine years old after $500 deductible
  • Ebay Feedback Rating: Prospective buyers can review the seller’s track record via the eBay feedback system

In addition, users can review the vehicle’s history by searching Experian VIN # records via an online link. Cost is $7.99 for a single VIN # search, or $14.99 for up to 10 searches. Finally, buyers can order a pre-purchase inspection of the vehicle for $100.

Financial Institution Opportunities
Here’s how a financial institution virtual vehicle site could work:

  1. Using eBay programming tools (eg. APIs), create a website that aggregates local vehicles listed on eBay.
  2. Buyers would handle the transaction through normal eBay channels, but you would have the first chance to make the loan. In order to maximize the returns, it’s recommended that you allow buyers to make purchases from anyone. As you’ll see later, the eBay fraud protection programs mitigate much of your risk in making "person-to-person" auto loans.
  3. To further boost volume, consider helping sellers market their vehicles in any of the following ways:
  • create downloadable FOR SALE signs complete with purchase details and/or referring potential buyers to the online auction (see inset for a version recently distributed by eBay in a direct mail program)
  • provide a customizable template for users to create their online auto listing
  • integrate customer listings with your own inventory of repossessed autos for sale
  • provide "incentive financing" programs that sellers could use
  • offer a wide variety of loan options for cars sold through the site

The virtual auto emporium would have several marketing and promotional benefits:

  1. Creates interest and publicity about your website
  2. Drives traffic to your lending area
  3. Increases vehicle loan volume
  4. Creates an interesting program that could be featured in website, statement, and direct marketing campaigns (see eBay DM samples below)

Addendum: Ebay Direct Mail
Here are close-up views of the recent eBay direct mail received in early July. We may have been targeted due to recent activity, our second eBay Motors vehicle purchase.

Ebay_4_sale_dmThis 9×12 inch cardboard sign looks very similar to a sign you might purchase at the local drugstore to stick inside the window to advertise a car for sale. The FOR SALE is in bright orange and includes references to the FREE $20,000 purchase protection and FREE 1,000 mile service agreement (not visible in this scan).

This eBay version is intended to be displayed within the car and highlights the eBay listing number for more information. The back of the sign (click on the image below for a close-up), lists the features and benefits of selling your car through the auction site. It also includes an offer to return the $40 listing fee if the vehicle doesn’t sell. Sellers also pay a $40 flat transaction fee ($80 in total) if the vehicle sells.


Online Banking Helper Bubbles

Ebay_bubble_helper_1Here’s a little technique we haven’t seen before, helper bubbles that popup to highlight new and/or underutilized features.

For example, in My eBay, this yellow bubble appeared on the screen pointing to a relatively new feature on the site, a drop-down box that allows the user to take various actions on items they are tracking.

Note: eBay allows you to turn off the bubble with a "Don’t show me this again" link.

A great way to highlight important features of online banking.


eBay Personalized Email Marketing

Ebay has been on the forefront of fighting online fraud, introducing Account Guard on its toolbar in Feb. 2004 (see Online Banking Report, #105/106 and #85), as well as a number of safeguards into its service delivery over the years.

Ebay_personalilzed_email_4The auction giant recently elevated the personalization in its emails, incorporating name and eBay username, in an effort to help users recognize genuine messages.


View closeup of personalization


If you’d like to learn more about the future of financial email messaging, check out Email Marketing in Financial Services: Leveraging the Inbox from our sister publication, the Online Banking Report.

Anti-Phishing Tools from eBay and Earthlink

Every Internet threat begets an equal opportunity. In the case of phishing, we’ve seen the toolbar creators fight back with buttons that identify safe and not-so-safe websites. eBay and Earthlink both fight phishing via their toolbars. Google and Yahoo’s toolbars block popups and Yahoo has a beta version attacking spyware.

The latest entrant is SpoofStick from CoreStreet. The Internet Explorer plug-in displays the underlying URL in bold letters below the regular browser toolbars. For example, users at a legitimate Citibank site would see, "You’re on" Users who’ve clicked through a phishing message will see something like, "You are at" which will hopefully prevent users from entering confidential banking information.

Financial institutions should consider making the generic Spoofstick available for downloading from their security areas, or even better, private branded a version that shows the financial institution’s own URL in a unique color.

To learn more about how to promote online security and peace of mind, check out Marketing Security: The sensitive issue of publicizing security and authorization enhancements from our sister publication, the Online Banking Report.