June 5, 2007, 12:00 AM

Discovery discovers a payback on alternative payments

Despite long programming times, Discovery is pleased with several new alternative payment programs, senior vice president Kelly Day told attendees June 4 at the 2007 Internet Retailer Conference and Exhibition in San Jose, CA.

Mark Brohan

Research Director

Despite longer programming times than originally planned, Discovery Interactive, a unit of Discovery Communications Inc., is pleased with several recently added alternative payment programs, senior vice president Kelly Day told attendees June 4 at the 2007 Internet Retailer Conference and Exhibition in San Jose, CA.

Day, speaking at a day-long workshop in a session titled “Beyond Credit Cards: E-Checks, PayPal, Google Checkout & Much More,” says it took four Discovery Interactive programmers several additional weeks to interface PayPal with various back-end systems, including order management applications. Originally PayPal also didn’t pass back the billing address information to Discovery and Discovery had difficulty accessing PayPal’s secure file transfer protocol to automatically retrieve settlement and order reports.

But once the bugs were worked out, Discovery Interactive, No. 186 in the Internet Retailer Top 500 Guide, is very pleased with PayPal and other alternative methods of payment. 13% of all transactions on Discovery’s e-commerce site now pass through PayPal and 72% of all eBay orders. By using PayPal, Discovery Interactive also now has access to 100 million PayPal accountholders and greater sales conversions from its eBay store. “We were incredibly surprised with the results,” says Day.

Discovery, which recently announced it will close its 103 mall-based and standalone stores and concentrate on the web and other direct marketing channels, also is achieving goods results with Bill Me Later from I4 Commerce. Since introducing Bill Me Later as a new billing option in the fourth quarter of 2006, the service, which gives registered users the option of 90 days same as cash and other deferred financing options, now accounts for about 3% of total orders.

More important, I4 Commerce helped Discovery generate higher average holiday orders of about $140 for customers using the Bill Me Later program. “This program appealed to us as a means to acquire new customers,” says Day. “It has lower merchant expenses than card-based payment alternatives with little chargeback risk.

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