Much of the recent growth in online banking can be attributed to the frenzied pace of adoption of email payments. Although the companies are vague about actual transaction volumes¹, we can see heavy traffic at their Web sites. Apparently, all it takes is a $5 referral bonus to drive traffic through the roof. Case in point, PayPlace.com already had 414,000 unique visitors one month after launch with no advertising. Compare that to SFNB’s 165,000 visitors 4.5 years after launch and after tens of millions in marketing, publicity, and premium-rate deposits. During a three-week stretch in May, PayPlace’s grew from

3,900 lots to almost 11,000 (see Table 1), 25 times as many as Bank One’s eMoneyMail

In total, traffic at the busiest P2P and bill payment companies has grown 2.5-fold this year (through April, see Table 2). And on eBay, email payment companies are mentioned on approximately 1.5 million auction lots (as of May 31, 2000), up from zero Nov. 15, 1999 (see Table 3). For an overview of email payments

PayPlace’s banner used by eBay sellers to earn $10 (bonus is now $5).

¹The exception is X.com that in recent conversations has said they are seeing about one transaction per user per month (18 million annualized) for an annualized payment volume of $1.1 billion. Putting the two numbers together yields an average payment size of $61, similar to average credit card transaction amounts.

 Table 1

number of eBay lots listing PayPlace as a payment option

Source: Online Banking Report, 5/00

Table 2

unique monthly visitors (thousands)

Source: PC Data Online <pcdataonline.com>, 5/00; blanks indicate that Web traffic was below the minimum threshold to be reported

 ¹PayPal is owned by X.com; ²Payme.com has been purchased by PayMyBills.com; ³mybills.com is Checkfree’s proprietary bill payment service

Table 3

listed as a payment alternative in eBay auction lots

Source: Online Banking Report searches of eBay auction listings, 11/99 to 5/00; nm = not measured; n/a = not available             e = OBR estimate

¹Number of eBay auction listings mentioning the payment alternative; many listings contain multiple payment options and many sellers have multiple listings; search strings exclude “.com” except for x.com; the percentage listed is the percent of total lots that includes at least one of the payment options listed.

²Beginning March 31, we began adding the wildcard ‘*’ after the search term, for example, x.com*, for most terms it increased the number of hits by approximately 10%. The exception was X.com, which doubled after adding the wild card.

³eBay stopped reporting the exact number of auctions in process after April 17, so we have estimated the number has remained flat at 4.3 million

⁴BillPoint is eBay’s in-house system which rolled out to the entire eBay base in April after six months of testing with selected high-volume merchants; on 2/29/00, Wells Fargo purchased a 35% share of BillPoint from eBay; we did not measure BillPoint volume prior to Feb.; beginning on Apr. 17, we began counting BillPoint lots using the special Billpoint search tool on eBay

⁵Beginning March 16, began searching “i-escrow” without hyphen, adding about 15%; currently offering escrow transactions of under $1,000 for free.

⁶In April, Payme.com agreed to merge with Paymybills.com

⁷dotbank was purchased by Yahoo! on March 23 and will be relaunched later this year as Yahoo PayDirect.

⁸Many sellers offer multiple payment methods, so we have estimated the total number of unique lots offering at least one alternative payment method, +/- 10%