Design & Development

Online Payment Alternative: Bill Me Later

Vince Talbert is the vice president of marketing for I4 Commerce (pronounced “eye four commerce”), a company offering the online payment alternative Bill Me Later at.

PeC: What does Bill Me Later provide to customers?

Talbert: “It is a payment option designed so customers can make purchases online without having to use credit cards. A customer simply checks the Bill Me Later option, and he will be sent a bill in the mail.”

PeC: If the billing comes later, how does the merchant know he/she will be paid for the product purchased?

Talbert: “When the consumer is approved by Bill Me Later, the merchant knows that he is covered for that transaction. The merchant will get paid by Bill Me Later for that transaction, so he will go ahead and ship those goods to the consumer. That night, when the merchant settles his transactions through his existing payment processor — much as he would do with Visa and Mastercard transactions — he will get full payment for that purchase, minus the transaction fees associated with it.”

PeC: Is the merchant at risk if the customer doesn’t pay for the product?

Talbert: “We take the credit risk associated with that transaction. If a customer failed to pay, we would pay the merchant, and Bill Me Later would go about collecting the money from the person who made the purchase. As long as the merchant has shipped the goods and the customer is satisfied in that sense, it is our responsibility to go collect.”

PeC: Are merchants’ customers hassled by Bill Me Later for payment?

Talbert: “We send out a bill to the customer in five to seven days. A customer typically has 30 days to pay that bill without incurring any additional cost. However, for the sake of convenience, a customer can choose to pay for purchases over time. This incurs a small interest charge, and a minimum payment due is assigned. At that point, the arrangement works very much like a credit card does in the sense that a customer gets a monthly bill with a minimum due and interest accrues if the balance is not paid in full.”

PeC: Can offering Bill Me Later really help boost my sales?

Talbert: “If it is used and promoted correctly, merchants can see a double-digit share of their sales occurring through Bill Me Later. What we find is that, of the sales that occur through Bill Me Later, about half those customers will be incremental new customers that merchants would not have gotten otherwise.”

“Third-party research studies have validated that about 50 percent of customers would not have purchased without Bill Me Later. Because you provide instant buying power through the instant credit process we facilitate, it gives people more buying power. As a result, they spend more.”

“Typically, the average order value is 50 percent to 75 percent higher than the average transaction at a site without the feature. So, you see higher average order values, you see incremental customers and you see customers return to your website more frequently. There is typically 46 percent higher repeat usage by a consumer in the first 90 days of his relationship with you.”

PeC: What would it cost a merchant to implement?

Talbert: “It is really based on the amount of sales volume the merchant does. Bill Me Later costs typically 30 to 40 percent less than what merchants pay for Visa and Mastercard fees. It varies, and it depends on the size of the merchant.”

PeC: If I am a multichannel merchant, will integrating this system work?

Talbert: “Yes. About 40 percent of our retailers who sell online also utilize us in their call centers.”

PeC: If the consumer purchases from multiple sites that use this feature during a given month, does the consumer get multiple invoices from Bill Me Later?

Talbert: “All the transactions the consumer makes with Bill Me Later are aggregated on one bill, and there is no preset spending limit.”

Practical Ecommerce

Practical Ecommerce

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