Plastic Not the Only Payment Choice Online
For a variety of reasons, some consumers prefer to use so-called
alternative payment methods to buy goods online.
While making use of services
such as PayPal, Bill Me Late and Google Checkout may not have been the first
choice of consumers who prefer to use credit cards, a significant and growing
number of shoppers are preferring to go the alternative payment route.
to a Multichannel Merchant report from the eTail 2009 conference, Bruce
Wolansky, vice president of global e-commerce for Orvis, felt “almost
embarrassed to slap a Bill Me Later logo” on his company’s site back in 2005.
That discomfort turned out to be short-lived as Mr. Wolansky found consumers
responded to having another choice they could use to purchase goods. In fact,
according to Mr. Wolansky, the average credit card consumer spends $150 on
Orvis.com while Bill Me Later users spend $175.
Tim Engel, vice president of
strategic initiatives for JTV.com, told
eTail attendees that between 15 and 30 percent of the online jeweler’s sales
are made with a form of payment other than credit cards.
Julie Katruska, director
of finance for AEO Direct, said she only saw one drawback to using alternative
payments. The company cannot take PayPal returns in its stores. “We can offer
the customer cash back or a store credit,” she was quoted by Multichannel
we can’t process a return in-store with an alternative payment.”
Discussion Questions: What do you
see as the biggest factors behind the growth in alternative payments online?
What are the pluses and minuses for merchants associated with the use of alternative
payment options? Will we see the use of these alternative payments migrate to
brick and mortar locations?