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Offer Flexible Billing Options

Offer customers flexibility with a "Bill Me Later" payment option.
Magazine Contributor
3 min read

This story appears in the February 2006 issue of Entrepreneur. Subscribe »

Does giving customers the ability to buy now and pay later appeal to you? If so, you may want to consider adding I4 Commerce's Bill Me Later service to your website's payment options. Proponents say the service encourages impulse buying by eliminating the need for customers to have credit cards nearby and easing their security concerns.

How it works: When online shoppers proceed to checkout, they see a "Bill Me Later" option along with the option to use a major credit card. To use Bill Me Later, they must provide their date of birth and the last four digits of their social security number. E-tailers then hand off the transactions to I4 Commerce, which authorizes each one in about three seconds, settles with the merchant within two days, then bills the customer within 14 days. The authorization runs through the same infrastructure as most credit card transactions. is one business successfully using Bill Me Later. The online relationship destination, co-founded in 2003 by Duane Dahl, 43, Jason McVey, 29, and Cindy Henry, 31, has 3 million members and generates more than $2 million in subscription revenue each month.

The Seattle-based company signed on with I4 Commerce in 2004; today, 11 percent of the site's transactions are paid via Bill Me Later. "We find that many of our members are interested in Bill Me Later, especially because of our higher price point than other dating sites," says president and CEO Dahl, whose site charges $59.95 for a one-month subscription and $99 for three months. "Consumers may not want to pay the complete amount upfront. Consumers also [say] they are using Bill Me Later because they are concerned about security online." You should consider the option if you want to:

Appeal to soccer moms. The typical Bill Me Later customer is a 35- to 45-year-old woman with four to five credit cards and a household income of more than $70,000. She's a big spender offline, "but because she is concerned about online security and is very busy, she doesn't buy as much online or on the phone. With Bill Me Later, she buys more, and buys more often," says Vincent Talbert, vice president of marketing and co-founder of I4 Commerce in Timonium, Maryland.

Improve your browser/buyer ratio. More than 50 percent of online shoppers don't make purchases online. Change that by offering a payment option that's secure and easy to use.

Reduce transaction costs. E-tailers pay 2.2 percent to 2.5 percent of each transaction to major credit card companies. With I4 Commerce, approved merchants pay between 1.5 percent and 1.95 percent, plus 15 cents per transaction.

Melissa Campanelli is a marketing and technology writer in New York City.

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