CyberSource Announces Non-Card Credit with Fewer Merchant Hassles

Mountain View Calif.-based CyberSource Corp., a transaction gateway for Internet merchants, announced today it is offering a credit-based, non-card payment alternative that can be implemented with a minimum of integration hassles. The company says an arrangement with merchant processor Paymentech L.P. will allow CyberSource merchant clients to install I4Commerce Inc.'s Bill Me Later service in a day or two for use by online shoppers. Merchants will be able to implement the product, called Bill Me Later SmartConnect, over an Internet connection without creating code for a specialized processor connection and without switching processors, says CyberSource. Bill Me Later allows consumers to buy goods on Web sites using a credit line from I4Commerce, which typically bills consumers within 15 days of the settlement posting. As with credit card payments, merchants submit transactions for settlement upon shipping the goods. According to data from Timonium, Md.-based I4Commerce, merchants that add Bill Me Later to their payment mix enjoy growth of 3% to 7% in customers, 8% to 11% in order value, and up to 46% in repeat usage. I4Commerce, which claims its product sets consumers' minds at ease about online payment while also extending them credit, charges merchants 1.5% plus 15 cents per transaction, which it estimates is 30% to 40% less than the rate merchants customarily pay for card-not-present credit card transactions (Digital Transactions News, March 31). In return, it offers guaranteed funds on authorized transactions. Merchants accepting Bill Me Later, which include hotels.com, eBags, 1-800-Flowers, and Ross-Simons, are seeing the channel account for anywhere from 3% to 7% of transactions, the company says. I4Commerce, which has pursed a strategy of targeting high-volume Web merchants, can now claim some success with third-party offerings, as well. In addition to the deal with CyberSource and Paymentech, its Bill Me Later product recently became available as part of First Data Corp.'s Encompass platform, which also offers Verified by Visa and SecureCode, the onlline anti-fraud systems from Visa and MasterCard.