Figuring there are still many consumers who prefer not to use credit cards for online purchases, Buy.com Inc. began offering last fall the Bill Me Later cardless financing service. But while it expected customers to appreciate the alternate means of financing a purchase, it was surprised when the service became an effective tool for acquiring customers and driving up the value of purchases, COO Brent Rusick tells Internet Retailer.
"Over 70% of customers who buy using Bill Me Later are new customers," Rusick says. "We`ve found it to be a great customer acquisition tool."
Rusick adds that customers who purchase with the Bill Me Later feature, which is offered through CIT Bank and managed by I4 Commerce Inc., also make purchases that are larger than the average Buy.com sale. Rusick says he figures that`s because some customers who want to purchase products such as big-screen TVs for $1,000 or more often don`t want to risk using their credit card online or pay credit card interest.
To use Bill Me Later, shoppers click on the Bill Me Later option at checkout, input their personal data and billing information, then wait for an authorization process that takes about the same time as a credit card authorization, Rusick says. Shoppers pay for products through monthly installment payments on a line of credit approved by I4 Commerce.
In addition to Bill Me Later serving as a customer acquisition tool, it also provides Buy.com with a more flexible means of offering special financing promotions, such as offering TVs or computers with no payments or interest for six months, Rusick says.
Jeff Foster, executive vice president of Retail Decisions, a data processing and consulting firm that helps retailers get connected with Bill Me Later, says that most consumers who use Bill Me Later have credit cards but prefer not to use them for online purchases.