0
Whether you’re having trouble getting credit or just want to avoid the hassle and cost of owning a credit card, you might find it tricky to shop online without that seemingly magic piece of plastic. The good news is that digital merchants and online service providers are making it increasingly easy for consumers to shop online, conveniently and safely, without credit cards. Here are 3 options to pay for items and services online without a credit card:
- Prepaid cards – Available at discount or drug stores, these debit cards are offered in specific denominations. Once you’ve used the prepaid balance, the card no longer has value. Another challenge with prepaid cards is that you may not have one handy when you need it.
- Gift cards – Purchase gift cards to use on a retailer’s ecommerce store. Although it’s one way to get around paying by credit card, the challenge is that you can sometimes only find gift cards for major retailers, which means you’re out of luck if you want to purchase services from an Internet service provider or join an online dating site.
- Bill to Phone – Know your home phone number? Remember the last four digits of your Social Security number? That’s all you need to use the Bill to Phone payment option, which allows you to charge games, downloads, and other digital merchandise and services directly to your phone bill. With Bill to Phone, you pay no interest fees and you reduce your risk of identity theft because you’re not sharing sensitive financial info over the web.
You can only use Bill to Phone if the online store offers it at checkout. Don’t see Bill to Phone as a payment option? Tell the merchant you want a credit card free alternative.
ILD, one of the nation’s leading alternative payment processors, allows you a credit card free way to buy products and services online. If you have questions about an ILD charge on your phone bill, please visit our customer care center.
The products are chosen. The inventory is ready. The staff is hopped up on caffeine. Let the 2010 holiday shopping season begin! The National Retail Federation expects a 2.3% increase in consumer holiday spending this year. No matter what your usual preparations for the fourth quarter might be, it’s possible your online store is missing the hottest thing in ecommerce this year: alternative payment solutions.
www.marketingpilgrim.com
Here’s why you should add alternative payment options, like bill to phone, to your ecommerce site:
- Ecommerce merchants are beginning to recognize there’s a huge market in the underbanked, those consumers with poor access to banking facilities. Estimates vary, but some sources believe as many as 40 million Americans have little or no interaction with conventional financial institutions. That means a portion of your target market may not own credit cards or have access to a bank account.
- Consumers are more risk averse. Identity thieves stole about $54 billion dollars in 2009, according to Javelin Strategy and Research. The fear of identity theft and credit card abuse may make some consumers hesitant to submit credit card information over the Internet.
- Consumers are more money conscious. Just because consumers have credit cards doesn’t mean they’ll use them. Why? As interest rates rise, more consumers may cut back on card use to avoid paying bloated rates. In addition, the economy has forced others to come to terms with their debt load, and, as a result, they may work to actively reduce the amount they borrow from banks and credit card companies.
Get on the “Hot” list this year by offering consumers an alternative to credit cards and bank account based payments like Pay Pal. A bill to phone payment option allows consumers to charge your online content and services to their phone bill. When they pay the phone company—using whatever payment method they normally use—they also pay for your products.
The tinsel, gift wrap, and cheesy TV holiday specials will be here before you know it—and, hopefully, so will the consumers. Learn more about adding bill to phone options to your ecommerce store by contacting the alternative payment experts at ILD Teleservices.
The death of the credit card is inevitable.
Read the final post of this 3-part series.
The Solution.
Hamlet’s charachter, Polonius warned, “neither a borrower, nor a lender be“. But most of us are one or the other, and it’s this endless willingness of lenders to lend and borrowers to borrow that has shaped this recent economy. It’s not all bad, because it kept the consumer economy moving steadily from the early 1990s until the meltdown of 2007. But what about the future? How sustainable is high interest borrowing and lending? Look around. We are seeing alternative payment companies like PayPal, BillMeLater, Boku, and ILD Teleservices, experience phenomenal growth. The alternative payment method (APM) providers offer consumers a secure way to shop online without increasing their debt load and interest loan with “no credit card required” offers, and no interest. While conversely credit card companies are implementing increasingly hostile practices not only toward consumers but with extra fees for merchants, too.
A national poll by Consumer Reports lends further validation to this argument:
- 45% of consumers say they are paying less with credit than a year ago
- More than one-third (32%) have paid off and closed a card since January 2008, and half of those that canceled did so in direct response to the actions of credit-card issuers, such as cutting limits, hiking rates, or imposing fees.
So, do you still think credit cards will be alive and well for another 60 years? Clearly, I think there are some big changes coming, but I’d like to hear your thoughts, so please share them below.
Oh by the way, here are some other interesting links. If you don’t go to the site, at least read the headlines:
Consumer Reports Poll: Consumers Angry at Credit Card Companies; Citing Unfair Treatment When Closing Accounts
Merchants Start Campaign in Battle Over Credit-Card Fees
Anheuser-Busch Steps Into Credit Card Transaction Fee Reform Battle
http://www.csnews.com/csn/cat_management/malt_bev/article_display.jsp?vnu_content_id=1004030231
“The fees that the credit card companies charge defy logic” – CHS Joins Battle Against Credit Card Fees
http://www.allbusiness.com/retail-trade/food-stores/4486057-1.html
Angry Consumer Slices and Dices Credit Cards To Protest Rate Increase
We’ve all seen the “no credit card required” offers promoting new products and services. With no credit card required, there’s no obligation, right? So, you check out the offer and you’re sold (remember – no obligation, right?)! You provide all of your contact information on the form (what’s the risk?), hit “next”, but wait, there’s more! Often times you DO need a credit card for that product, service or trial. Isn’t that frustrating?
Yes it is – and now they’ve got your information, but you don’t have the product, but you’re hooked! All too often, ”no credit card required” means “sign up using your PayPal, BillMeLater or checking account”. Well, what if you don’t have one of those? What if you’re like 23% of the US population (and growing) who don’t have a credit card, or got beat up on credit because of the economy, but you’ve got the funds to make purchases (just not going to add to your debt)?
The good news is that there are alternative payments, and “credit card-less” systems out there, and more people are choosing not to use a credit card for online payments. According to Javelin Research, the overall projected growth for online payments is expected to climb to $268 billion by 2013, from around $150 billion today because people want more payment options.
So, what do you do when you’ve provided your personal information to a company and it wasn’t quite what you expected? Do the same thing you’d do when you’re dissatisfied with a meal at a restaurant. Let them know. Usually, the business will remove your information. Got any other ideas?
Cutting up credit cards
As our economy slowly recovers, there are still many changes to business strategies and decisions to come that will continue to affect the everyday credit card consumer. Many credit card companies continue to change their guidelines and credit score requirements as they prepare for a continuous increase in defaults.
The result for online merchants will be a steady decrease in available consumer credit and thus resulting in a fewer sales. The online merchants who implement alternatives now have a chance to make-up for the loss in credit card purchases by introducing ‘bill me later’ type alternative payments, like Bill to Phone also known as LEC Billing.
From a processing and billing standpoint, Bill to Phone operates similarly to a credit card. The consumer makes a purchase, and the merchant transmits consumer and transaction data in real time via a secured network connection to iValidate (ILD Teleservices’ validation platform). The buyer information and account is verified by ILD through the authorization request submitted by the merchant.
Alternative payment options allow a much larger consumer base to still take the advantage of buying items online, and instead of entering credit card information, the buyer inputs their telephone number to authorize payment via their phone bill.
Would it help you if were trying to sign up for an online service and you didn’t have to pull out your wallet, find the right card, try to read the tiny digits and instead you simply just provided your phone number and add the charge to your phone bill? There are lots of people who have wanted to make purchases online but couldn’t because either the merchant only accepted specific credit cards, or the buyer just didn’t have a credit card. I know I’d rather save my credit card (and all that ugly interest) for bigger ticket items and put my smaller charges, like move downloads, music downloads and even games on my phone bill.
If you are interested in reading more about the impending changes in the credit industry, they are covered in the following articles.
Citi Dumps Credit Card Customers at the Pump – http://www.ecommercetimes.com/rsstory/68452.html
BofA Won’t Hit Customers With Rate-Hike Squeeze Play – http://www.ecommercetimes.com/rsstory/68318.html
Last Minute Credit Card Tricks – http://www.nytimes.com/2009/10/17/opinion/17sat3.html?_r=1&emc=tnt&tntemail1=y
Today at ILD, we’ve released the latest version of our merchant website ildbnc.com. This upgrade will give our customers more visibility and the ability to quickly correct potential chargeback issues and improve their overall return. With the current economic changes, merchants are recognizing the value added by offering a bill to phone or “no credit required” option as an alternative payment method. As our merchant family continues to grow, we’re a step ahead with the latest technology and tools avalable to support their growth!
The addition of this latest “alert” module helps merchants see more detailed information and allows them to take steps to correct billing issues in a proactive manner. The first of many chnages to come in a suite of analytical data available to our merchants at ildbnc.com. Read more hereor check out the story here.
- Security: Through ILD Teleservices’ Bill to Phone payment method consumers will not be asked to give up more than their name and home phone number. A JupiterResearch Study on Alternative Payment Options revealed that 37% of consumers preferred using the APM because they did not have to enter any credit card information.
- Reach: A Survey performed by TrialPay found that 75% of online shoppers use or have used an Alternative Payment Method. This statistic plus the 23% of US households that do not have a credit card, results in a significant number of online users looking for alternate ways to buy products online.
- Checkout Completion: TrialPay’s survey also found that 59% of online shoppers were more likely to buy a product online if there is an APM offered. Consumers are being held back because Merchants aren’t giving them enough payment options.
- Convenience: In both studies mentioned above consumers liked the Alternative Payments because they did not need their wallet or to remember the numbers from a credit card. Another reason consumers like to use APMs are because they save time.
- Demand: In that same Javelin Study, they found that APMs will make up 30% of all online transactions by 2012. It also stated that Debit or Credit card purchases will drop to around 44% of total online purchases.
Clearly, APMs have gained significant traction over the last couple of years, and we anticipate that momentum will continue, especially as it relates to Bill to Phone services, and other non traditional “no credit card required” payments. If you wish to learn more about ILD Teleservices’ Bill to Phone APM, contact us through our website or call ILD Toll Free (888) 453-2666.
Hi, my name is Kathy and I am Vice President of Billing Operations for ILD Teleservices. An industry known for creating an acronym for about everything just came up with yet another one for the telecommunications history books. It’s called “IETB” and it stands for Information and Entertainment Transaction Billing. What does that mean you ask? I had the same question and I have been part of the industry for…well, that’s not really important.
The newly coined acronym (IETB) is a “no credit card required” payment solution for online services. It was developed by AT&T specifically for digital merchants and content providers to process electronic transactions to a telephone bill for payment. With the rapid growth of the online marketplace, a “no credit card required” payment option has become more important to consumers. Plus, providing digital content subscribers (anyone who subscribes to online games or downloads software over the internet) with a way to use the phone bill as an alternative to paying with a credit card at checkout really simplifies things. IETB is sort of like Bill Me Later, only the charges appear on your phone bill each month, instead of a direct invoice.
What’s especially convenient is that as a buyer, I know what my phone number is, but haven’t gotten around to memorizing my credit card number or the security code, and I’m never sure what my credit card companies are changing my limits to these days, so who knows which credit card to use?!
Where can you charge services to your phone bill, you may ask? ILD presently works with over 150 merchants and it just depends on whether the merchant you are buying from offers bill to phone. Where do you shop when you are online? Would you like to see “no credit card required” available at your favorite online store? Let us know and we’ll see what we can do to make it available.
Still have questions? Ask away and I’ll do my best to answer them.
When does sharing personal information become over sharing?
I’ve heard the question, “Why don’t people just use their credit card to buy online or over the phone?” For starters, do you really want to share your credit card number with a complete stranger or provide them with access to your checking account for a simple purchase? Right. So that’s why when given the option, many people prefer charging a service to their phone bill because it lowers the risk of someone accessing personal financial data. Plus, it also buys nearly a month before a payment is required.
According to a recent consumer payment poll conducted by Javelin Strategy & Research, people are inclined to purchase more digital services at sites that offer “no credit card required” payment options— such as adding the purchase to a phone bill, or using a stored value account, or other various alternatives to traditional payment mechanisms. More than half of all consumers (57%), and close to 60% of those ages 35-44 indicate likelihood to do so. Among minority segments, the “no credit card” preference is even higher—for example, over 60% of African Americans and Hispanics indicated they would be more likely to buy. This is an even more attractive option for parents purchasing for their children as 65% indicated they would be more likely to purchase if the site promoted “no credit card required.”
Payments options matter to those who are providing digital services and those who are buying them.
Back to top