GE Money has teamed with eBay to launch
the eBay MasterCard, a credit card that combines the payments
service features of PayPal with a revolving credit platform,
capping an astonishing run of private-label deals for GE.
Charles Davis reports.

Tightening its grip on the online payments market, GE Money, the
consumer lending unit of General Electric, has teamed with online
auction giant eBay to launch the eBay MasterCard.

eBay MasterCard customers will earn one reward point per dollar
spent with the card, and can use those points to obtain shipping
discounts and vouchers that can be used to shop on eBay or to pay
eBay seller fees. The card will charge annual interest rates
ranging from 7.99 percent to 14.99 percent, depending on the
cardholder’s credit history and other factors.

Cardholders can choose from one of three card designs and can
add their eBay User ID to the card, making it far easier to
initiate payments using the card on the site. The card features
Safe Shipping, a guarantee that protects cardholders if their item
never arrives.

In a powerful enhancement that differentiates the eBay
MasterCard from all other online payment options, the card allows
synchronisation with payments service PayPal – eBay MasterCard
customers can view their account activity within their existing
PayPal account. eBay owns PayPal, and has been working to combine
the features of PayPal with a revolving credit platform.

Additional benefits include 0 percent liability for unauthorised
purchases, 24/7 customer service online and through a call centre,
and no annual fee.

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eBay will provide promotional and branding support for the eBay
MasterCard. GE Money Bank will be responsible for issuing the card,
and providing customer service, billing and credit management.

The card represents a major expansion of a relationship
originally created in June 2004 for GE to offer PayPal Buyer
Credit, a private-label revolving credit line available to
registered PayPal customers. The PayPal Plus MasterCard was
introduced in May 2006.

To date, GE Money has issued about 1 million PayPal Plus cards,
many to regular buyers on eBay.

“The eBay MasterCard is another great extension of the
partnership we’ve built with eBay and PayPal over the past few
years to offer rewards, security and convenience for their
customers,” said Margaret Keane, president and CEO of GE Money’s
Retail Consumer Finance unit, in a release. “With the eBay
MasterCard, shoppers can apply and buy with an instant online
credit process. As with PayPal Plus, there’s no waiting for a card
to arrive in the mail before making your eBay purchases.”

eBay and PayPal also announced the availability of the PayPal
Security Key. The key, a small, handheld device that users can
obtain for $5, supports two-factor authentication by creating a
unique code every 30 seconds. PayPal members can use the code,
along with their user name and password, to sign into their PayPal
or eBay accounts to help prevent unauthorised users from accessing
them, the companies said.

GE Money Bank recently replaced Washington Mutual (WaMu) Card
Services as the issuer of PayPal’s credit cards.

The PayPal Plus card also has a MasterCard logo and some
features the WaMu card lacked, including a rewards programme and
the ability to check the card’s balance on PayPal.com. PayPal,
which is based in San José, California, also recently began
offering a different GE-issued credit card to customers in the
UK.

The switch comes shortly after the cancellation of an eBay
affinity card issued by MBNA since 2003. That relationship ended
soon after Bank of America bought MBNA in January.

Offering both an eBay and a PayPal credit product, as well as a
PayPal debit card, allows GE Consumer Finance to essentially lock
up card issuance for one of the world’s largest and fastest-growing
web sites, and caps what has been an astonishing run of
private-label deals for GE.

Private-label card issuance by GE Consumer Finance, which has
$163 billion in assets, has grown dramatically. The Financial
Times
newspaper reported in June that retail giant Wal-Mart
would partner with GE Consumer Finance and Visa USA to offer a
reloadable debit card for the country’s estimated 80 million
under-banked consumers.

In July, GE Money announced that the unit will offer a Visa
credit card to customers of retailers Gap, and its brands Banana
Republic and Old Navy. The Visa card will be issued by GE Money
Bank and marketed to existing Gap customers. The Visa card will be
offered at more than 2,600 of these retailers’ outlets across the
US and will allow cardholders to earn rewards at all of these
stores’ locations and everywhere Visa is accepted worldwide. In
addition to earning rewards, customers can receive additional
benefits such as special cardholder offers, advance notice of sale
events and exclusive online shipping.

The deals are even more remarkable considering the shrinking
number of private-label deals left to be made. According to
SourceMedia’s 2006 Card Industry Directory, GE Consumer Finance,
Citi and HSBC Retail Services own just over 80 percent of
private-label retail card receivables, up from 68 percent in
2003.

The cards business is particularly appealing to eBay, which is
looking for ways to increase revenue. Auctions still account for 69
percent of eBay’s revenue, and its auction business grew 23 percent
on sales of $1.25 billion last year. Only a few years ago, though,
those numbers were closer to 40 percent. More than 81 million
people use eBay, but the total number of listings on the site is
flattening, and as competitors such as Google have introduced new
features into the market such as Google Checkout, some analysts
wonder if eBay’s auction model may eventually be replaced in large
part by search engines.