As the credit card industry makes changes, consumer behavior is changing, too. Although online shopping shows a steady incline, the form of payment is where the behavior is changing.  Credit card usage is becoming less and less popular as the choices are now moving towards debit cards and alternate forms of payment.

A recent study by Javelin (Online Retail Payments Forecast 2010-2014) showed in 2009 e-commerce grew 10.8 percent but was comprised of more debit card usage and other forms of payment.  Also, consumer’s comfort level has steadily increased with 63 percent of U.S. consumers saying they buy online and it is expected that by 2014 online shoppers will increase to 78 percent.

In the study it says that online purchases made via major credit cards is expected to decline from a peak of 58.8 percent in 2008 to 39 percent by 2014. In 2009, online payment services (i.e. PayPal or Google Checkout) comprised 51 percent of online purchases, surpassing gift cards (41 percent), store branded credit cards (27 percent), prepaid cards (17 percent), online credit services such as Bill Me Later (17 percent) and store-branded debit cards (16 percent).

Has your comfort level increased with making online purchases?  Do you still see limitations in the forms of payment offered online?  Are you like most Americans, and are trying to limit the amount of purchases you charge to your credit cards?

At ILD Teleservices we’re seeing merchants add the bill to phone alternative to successfully increase shopping cart conversions.  These digital merchants are offering their buyers a way to purchase items and have the charges placed on their local phone bill, referred to as LEC Billing.  ILD is the back-end clearinghouse that makes the transaction possible.

Ever wonder how phone billing works? This post will take you through the 9 steps at a high-level.

1. Someone orders a service from a merchant (web hosting, ISP service, music, movie or software downloads, etc.).
2. The merchant offers the “bill to phone” payment option from ILD to charge for the service (just like charging to Visa or MasterCard).
3. The merchant delivers the service to the consumer.
4. The merchant processes the charges for the service to the telephone bill through a billing clearinghouse like ILD.
5. ILD then submits the charges to the Local Exchange Carrier (also know as your local phone company).
6. From there the consumer is billed by the phone carrier.
7. The consumer sends the payment to their phone company.
8. The phone company sends the payment to ILD.
9. ILD sends the payment to the merchant.

Click here to view how it works.

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