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New Ways to Pay

Want to close more sales without doing more work? Give customers more ways to pay with alternative billing methods.


Have you noticed anything different about your favorite online retailers lately? Take a closer look at their checkout options, and you may find some alternative payment methods beyond PayPal and Google Checkout.

A recent study by online firm Brulant found that 30 percent of the top 100 internet retailers offer a form of alternative payment. In that same vein, a Javelin survey found alternative payment methods made up 14 percent of online purchases in 2007 and is expected to grow to 30 percent by 2012.

"Consumers are starting to look for different options they can trust," says Adam Cohen, principal of Brulant's consumer products and retail practice. Alternative payment companies entice buyers who may not have , feel wary about sharing their information online or just want an easier checkout experience.

Bill Me Later
Although the biggest alternative payment provider isn't yet being used by smaller retailers, that'll be changing soon. In a year or two, Bill Me Later will be opening up its services to businesses bringing in $1 million to $5 million in sales. For now, the company has launched its account, so you can make purchases through their no-fuss checkout model that doesn't involve remembering numbers or expiration dates.

With 3 million consumers in the system and 3,500 more signing up daily, Bill Me Later users are looking to extend their over time says Mark Lavelle, the company's vice president of corporate development.

"We create capacity in consumers' wallets," says Lavelle. "We're not just a way to pay."

Available at retailers like Overstock and Wal-Mart, Bill Me Later has no preset spending limit and is often used for high-ticket items like computers and furniture. As long as the customers are paying their bills on time, they can keep racking them up.

Reaching a different audience is eBillme, a service for customers ready to buy now, with cash directly from their bank accounts.

"Debit is a very strong trend online and offline," says Marwan Forzley, president and CEO of eBillme. "At the end of the day, cash is king."

Though this service isn't yet being used by smaller retailers--it's launching a small business system later this year--Forzley says business owners can use eBillme as a way to control company finances and employee spending. The method also allows recurring payments by turning all bills into e-bills and eliminating the need for checks.

Found on sites like and, eBillme, like Bill Me Later, also has no set spending limit.

Making headway in the credit card market with 150,000 national merchants is the Revolution Card, a card that only charges merchants a 0.5 percent processing fee instead of the 2 to 4 percent ones charged by legacy companies. It also offers privacy protection to consumers by requiring a PIN to complete transactions.

Revolution Card is gaining favor with merchants looking to give back to their customers, especially in tighter economic times. "Enabling consumers to feel a more immediate impact to their bottom line is better than point programs," says Jason Hogg, founder and president of the company, who says companies of all sizes have started accepting the card.

Revolution's benefits go beyond its credit products to Revolution Money Exchange, a program that is currently developing widgets that let users swap cash on Facebook, Ning, IM platforms, Craigslist and other third-party sites for one-off purchases or swapping cash with a friend you owe money.

For purchases of $150 or less, there's Bill2Phone and Bill2Phone-Mobile, which target customers uncomfortable with using credit cards online. The new system from phone-billing veterans BSG Clearing Solutions is ramping up to start working with online merchants this year to let them bill customers directly on their landline or mobile phone bills.

Planned for use with gaming and subscription products, like dating sites and magazines, it also banks on the concept of checkout simplicity. "Everyone knows their phone number," says Lance Devin, vice president of product management at BSG.

With phone-based payments already a growing trend in Asia and Europe, BSG is ready to bring the U.S. up to speed and expects its low price limitations to lift as it gains acceptance.

All the abovementioned billing options are designed to seamlessly integrate with your point of service technology, and the fees are transaction-based, making alternative payment options a good way to acquire new customers while keeping costs low. With different consumers looking to spend in different ways, remember that the more options you have, the more ways people can pay you.

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