Monday, October 6, 2008

Online Shopping/Online Debit...What's the Alternative?

Editor's Note: This article by Alex Rampell from E-Commerce times is subtitled "Expert Advice" but I should think that the idea of Internet Retailers offering a more secure transaction at a lower cost, would be labeled  "Common Sense."
Here's some expert advice: Stop calling platforms such as HomeATM's globally patented PIN Debit and Credit offering, an alternative payment. Alternative to what? Paying Visa and MasterCard's exorbitant fees?

In the bricks and mortar world, PIN Debit is labeled as the fastest growing, most secure and most preferred payment platform outside of cash. (Gartner Research)

So where's the logic in calling "the fastest growing most preferred payment method " an alternative payment method?  The fact is, PIN debit being labeled as an "alternative" payment platform would be akin to calling online shopping. "alternative shopping." I base this on the fact that the only truly alternative name for PIN debit is "online debit.

So to call HomeATM, which provides online debit online, an alternative payment platform is, at best, a misnomer. In the face of the Duopoly known as Visa and MasterCard, anything other than using their platforms somehow got labeled as an "alternative payment."  I say au contraire...

In the here and the now, there's no better alternative for online shopping than using online debit.  I say, provide consumers with HomeATM's SwipePIN device in the future and "card not present" transactions become a thing of the past.  The point I'm making is that the card IS present, at the point of sale.  It's the ability to be SwipePIN at home that's missing.  So bring the POS device to the point of sale...bring it home.  There's no place like home...atm.
Here's the article:
"As consumers tighten their budgets, some e-commerce retailers may feel the pinch. To avoid being buried under a mountain of abandoned shopping carts, online vendors should consider offering alternative payment options that give the buyer more convenience, flexibility and security, writes TrialPay CEO Alex Rampell.

The U.S. economy has entered a vicious cycle where housing, employment and financial troubles are forcing consumers to tighten their purse strings and closely evaluate their every purchase. Retailers are also feeling the grip of a tightening economy as they compete aggressively for a diminishing number of buyers' dollars.

In response, innovators in e-commerce have introduced creative marketing models and alternative payment systems that offer more security than credit cards, no interest, and free products or purchase incentives. These methods are especially attractive to online merchants because they actually increase a customer's willingness to buy and create new revenue streams.

PayPal was a pioneer in this space, and its $12 billion valuation shows just how valuable alternative payment methods are. The current success of some companies' innovative marketing models, as well as firms like Bill Me Later and TrialPay, indicate that alternative payment platforms will soon become a mainstream player in the multi-billion dollar payments industry.

Integrating Alternative Payment Options

Any company that conducts business online should consider integrating alternative payment platforms. With unlimited earnings potential, minimal integration costs, and lower rates and more perks than credit cards, these alternative options attract tens of thousands of top-tier merchants across virtually all industries. In fact, a recent survey conducted by First Annapolis Consulting found that, of 83 mid-sized e-commerce retailers, 41 percent accept alternative payments.

Unlike traditional ways to pay, alternative payment models create new revenue streams. They generate sales from transactions that otherwise would have resulted in abandoned shopping carts, unfulfilled subscription renewals or sign-ups for free trials. They allow online marketers to evolve with the demands of today's discerning consumer. And they offer no-brainer, cost-per-acquisition opportunities to attract valuable advertising dollars.

The current state of the economy has encouraged widespread adoption of alternative payment platforms by online retailers and shoppers alike. However, the relevance and popularity of these payment methods extend beyond a down economy. The multi-billion dollar payments industry is undergoing a transformation, and soon these "alternative" payment methods will be considered mainstream competition for credit cards and even cash. Just as the Internet has changed the way people shop, innovative payment methods are changing the way people pay."

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eBay Pays Now for Bill Me Later

Image representing Bill Me Later as depicted in CrunchBaseImage via CrunchBaseImage via CrunchBase

Ebay announced two acquisitions—spending over $1.3 billion altogether—this morning designed to shore up its other parts of its business in the face of declining profits and stagnant traffic at its primary online auction site. The company also finally addressed layoff rumors and said that it is indeed cutting 10 percent of its 15,000-person workforce. The company said about 1,000 full-time jobs will be affected, in addition to several hundred temporary workers and the elimination of open positions. The two acquisitions and the layoffs were summarized in a single release, with two others containing additional details.
The San Jose, CA,-based company says it has struck a definitive agreement to acquire Pay Pal rival Bill Me Later for approximately $820 million in cash and about $125 million worth of outstanding options, net of option exercise proceeds. The company will be combined with PayPal, which eBay already owns. The deal is expected to be completed by the end of the year. Click here for the Bean Investor Deck

Danish acquisitions: As part of its goal to increase its online classifieds holdings, eBay has turned to Denmark to buy Den Bla Avis and BilBasen for $390 million (about 2.1 billion Danish Kroner). The prices for the two weren’t broken out individually. eBay, which has a minority stake in Craigslist—the two are currently in the midst of a wide-ranging legal battle—has indicated that it wants to expand its focus on the online classifieds business. Den Bla Avis and BilBasen is added to eBay’s global portfolio of such sites, including the Netherlands’ Marktplaats, Spain’s LoQUo, the U.K.’s Gumtree, Germany’s and Kijiji, which is stronger in Europe, but has been working on building up its U.S. presence lately as a competitor to Craigslist.

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