Cut the cards
Plenty of people take online shopping seriously this time of the year. Bargain e-mails pile up in your inbox like cracker crumbs in a kid’s lunchbox.
Most people are fairly Web savvy about using their credit cards online. But this is the time of year when shoppers sometimes stray from known and trusted sites. And even “good” sites sometimes get hacked; and then credit card numbers are exposed. T.J. Maxx, for instance, reported this year hackers may have stolen 45 million user credit and debit card numbers.
A number of shoppers now use alternatives to online credit cards. That effort is supported by numerous online merchants who now want shoppers to use services such as BillMeLater, eBillMe, Paypal and Google Checkout, all of which are online payment systems that don’t use credit cards.
Spokane’s highly successful electronics site, OneCall, for instance, lets shoppers use three options: Google Checkout, PayPal and BillMeLater. OneCall is the online site for downtown retailer Huppin’s Hi-Fi, Photo and Video.
OneCall President Murray Huppin said those three non-card options for customers account for about 10 percent of all online sales.
Those three options — and other services like them — eliminate having to input credit card numbers into a Web site shopping cart. None of these services save you any money; they simply find another way to get money from your banking or credit account to the merchant, without using your card directly.
Huppin said he sees two reasons why customers like those options. In addition to offering credit card protection, the systems save the customer the bother of having to create a shopping account at each site visited. Instead, the customer selects the “Use PayPal” or “Use BillMeLater” button on the site and it then directs the purchase to the home page of that service, with no other information needed.
Most of these services work by first requiring a person to set up an account. And doing that requires linking a bank account to one of the online services. In the case of eBay-owned PayPal, the payment options include a bank checking account, a credit card and even a PayPal account into which one collects payments — such as through eBay sales.
A similar system is in place at Google Checkout.
BillMeLater, launched five years ago, is the online equivalent of buying groceries at the corner store and then coming back once a month and settling the total bill. But be warned: This is not as good a deal as most credit cards unless you pay off your balance monthly. Interest rates are as high as 18 percent in some cases.
The real advantage is for the merchant using BillMeLater. If OneCall customers rack up $3,000 in purchases with BillMeLater, Huppin only pays a 1.5 percent fee. Credit cards typically charge twice that rate.
Another challenger in the non-card market is eBillMe, based in Ottawa.
Its main difference is that payments are a cash-only system. Payments come straight from checking accounts, not credit cards. Those are authorized when the buyer clicks the eBillMe option on sites like TigerDirect and others.
It also guarantees finding the lowest price on a purchase. The company says that any lower price for the same item will be honored, for up to three months after date of purchase.