Roger Hardy, who in February sold web-only eyewear company Coastal Contacts for $385.7 million, will consolidate OnlineShoes.com and ShoeMe.ca.
Bill Me Later allows e-retailers and catalogers to offer promotional financing, such as 90 days same as cash. To date, Amazon has only allowed customers to pay with credit and debit cards, a proprietary Amazon card or a direct debit from a bank account.
Amazon.com announced today it will offer Bill Me Later as a payment option and take an equity stake in Bill Me Later Inc., whose service enables retailers to offer such promotional financing as 90 days same as cash. The companies did not provide details of the investment, other than to say that Amazon will be a minority owner of Bill Me Later.
“That’s great news for Bill Me Later,” says analyst Sucharita Mulpuru of Forrester Research. “It validates their position in the marketplace.” Ed Kountz, an analyst with JupiterResearch called the deal “a testament to the increasing influence of online alternative payments,” and added, “All in all, an intriguing and potentially very savvy move for both sides.”
Mulpuru noted that, in forging close ties with Bill Me Later, Amazon is taking a swipe at a company it perceives as a competitor, eBay Inc., whose PayPal unit introduced its own Pay Later service this summer that competes directly with Bill Me Later. Mulpuru notes Amazon would not likely endorse the PayPal service by offering it to Amazon customers.
The deal with Amazon will not prevent Bill Me Later from working with any other online retailers, says Mark Lavelle, vice president of corporate development at Bill Me Later. Bill Me Later is offered by about 700 web and catalog merchants, with about 80% of its business from online retailers, Lavelle says. Bill Me Later has targeted larger merchants, typically those with $50 million or more in annual web or telephone sales, Lavelle says. A report by brokerage firm Cowen and Company in June said 56 of the top 200 Internet retailers offered Bill Me Later at that time.
In landing Amazon, Bill Me Later adds the No. 1 e-retailer in the Internet Retailer Top 500 Guide. Amazon shoppers currently can pay with credit and debit cards, a proprietary Amazon card or a direct debit from a bank account. No timetable has been announced for the addition of Bill Me Later as a payment option.
In announcing the deal, Matt Swann, vice president of payments at Amazon.com, called Bill Me Later “a very customer-centric method to make online shopping even easier.” Lavelle called the deal “a huge, important milestone” for Bill Me Later.
While PayPal did not comment specifically on the Amazon/Bill Me Later deal, a spokeswoman pointed out that PayPal offers a variety of payment services, including a credit card, payment from bank accounts, a stored value account and Pay Later for promotional financing. “PayPal continues to offer customers more ways to pay than any other payment service online, in one simple integration for our merchants,” she said. More than 30 merchants offer PayPal Pay Later, PayPal says.
Bill Me Later went live in 2002 when its parent company was called I4 Commerce. I4 Commerce changed its name to Bill Me Later Inc. in August.