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As much as 5% of transactions could use the credit card alternative from Western Union, adding new shoppers to its customer base, Overstock says.
Overstock.com has launched a program with Western Union Money Zap, the online check payment service from First Data Corp. that it expects will be used in about 5% of its transactions in the near term, says Kevin Lane, Overstock’s executive vice president. The service opens up web shopping to the estimated 80 million consumers who don`t use credit cards, and the consumers who write some 20 billion checks annually at the point of sale.
Overstock and MoneyZap launched the service with a holiday promotion, offering shoppers an automatic $5 rebate when they complete their first purchase at Overstock.com using MoneyZap. “We’re confident it`s going to bring us customers we don’t already have,” says Lane. Lane adds that Overstock queried both its customers and a subgroup of e-mail subscribers – those who have opted in to receive e-mail updates form Overstock, but haven`t actually made an online purchase yet – about their preferences for using a check service versus a credit card when buying online. “There were enough people who said they’d prefer to use checks that we decided to go ahead and do it,” says Lane.
Lane didn’t disclose what it’s costing Oversotck.com to accept MoneyZap transactions but says it’s about equal to the cost of processing a credit card transaction. Integration of MoneyZap’s technology into Overstock’s systems took about two weeks, with support from MoneyZap staff, and did not require the purchase of extra capacity, he adds. Overstock is one of the first online retailers to adopt the service.