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Wednesday July 07, 05:43
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More US E-Tailers Accepting E-Checks, E-Invoices
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With Celent reporting one in five US consumers to lack a credit card, and one in ten, a bank account, e-tailers are considering e-checks and invoices in order to appeal to more customers. E-tailers benefit from increasing sales by a few percentage points, and with Celent predicting e-check payments to total USD 17.9 billion by 2005, at 9 per cent of online transactions, up from USD 7.3 billion, or 6 per cent of e-payments in 2003, the case for accepting e-checks is solid. Invoicing, which Celent expects to account for USD 294 million in transactions by 2005, up from USD 69 million in 2003, is also a solid proposition for e-tailers.
Paymentech, which processes over half of all online payments in the US, confirms e-tailers to have an increased interest in alternative payments, while Wal-Mart began accepting e-checks at its web site about a year ago. E-payment solutions providers such as I4 Commerce are tapping the market opportunity by offering shoppers instant credit, with an invoice that is settled at a later date. I4 Commerce pays retailers within 24 hours, as credit card firms do, and assumes all risks, with figures showing users to default on 4 per cent of payments, versus the FDIC’s estimated 5.76 per cent default rate for credit card payments.
Celent analyst Gwenn Bezard however warns that fraudsters may not be aware of the Bill Me Later invoicing solution offered by I4 Commerce, which, together with its practice of soliciting select merchants, may have kept its fraud levels low until now. E-checking is also susceptible for fraud, as customers reveal their bank account routing number and check number with the e-tailer. PIN-less debit, as recently offered by CyberSource and HIMC Corp, presents some risk in directly accessing a customer’s checking account is, but the respective solutions providers are confident that in time, authentication methods will improve.
(internetnews.com)
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