The Check Is In The (E-) Mail: Web-Based
Payment Solutions
BY JOSEPH GRUETER, INTELL-A-CHECK CORP.
With an increasing number of online stores, mail-order catalogs and
home shopping networks, shopping at home has reached explosive levels.
Consumers spent over $13 billion dollars online last year alone. Experts
project worldwide e-commerce sales to reach up to 3.2 trillion dollars by
the year 2003. These figures are expected to grow at an exponential rate.
Even bills can be paid directly over the PC or the telephone, reducing the
estimated 40 hours spent by the average American household paying bills
each year.
Keeping with the pace of this fast, direct way to shop, credit cards
have become the tools of choice for making at-home payments and purchases,
offering convenience, speed and security. In fact, for merchants,
verifying a credit card number is essentially the only way they can accept
a payment directly over the Internet or the telephone. Unfortunately, tens
of millions of Americans do not have, or do not want to use, credit cards
online. Focusing on the international e-commerce market also brings light
to the drawbacks of credit card only sites: While a majority of Americans
and Canadians possess credit cards, "plastic" is far less common
overseas, which puts companies wishing to do business in the international
arena at a distinct disadvantage. As a result, merchants are missing out
on a huge target audience of potential shoppers.
Do merchants have another option? Perhaps they should take a closer
look at electronic check-based payments.
Put simply, paying by check is easy in face-to-face transactions in
brick-and-mortar establishments. But when it comes to electronic commerce,
checking has never really been a viable or convenient alternative to
credit cards. Over the phone or the Internet, credit cards offer a secure,
direct method of payment. Customers can call in or surf a Web site, place
an order and read or enter the credit card information directly to the
customer service representative or onto the Web site "shopping
cart" page. Within seconds, the shopper's credit is verified and the
desired merchandise is shipped out immediately.
By contrast, there really is no way to make a purchase over the phone
using a check. To pay by check, shoppers must manually fill out an order
form and mail the order along with a check. Depending on the speed of the
"snail" mail, the merchant will receive the payment in three to
five days, input the order and deposit the check -- then wait a minimum of
10 days for the check to clear. Only then will the merchant fulfill the
order. The requested merchandise should arrive about two weeks later -- a
full four to six weeks after the initial order was placed by the customer.
In the Internet age, this might as well be an eternity.
Things have changed. Today's electronic check technology has made
paying by check a real option for virtual shoppers. This "checknology"
can offer some consumers the best of both worlds, combining the
convenience of checking with the speed and security associated with paying
by credit card -- so shoppers can make instant, direct payments without
accruing high credit card balances and costly interest rates.
Using software running on their desktops, customer service
representatives can accept check payments directly over the phone. Check
payments can also be made through the Internet, as well as interactive
voice response (IVR) technology. By simply entering a customer's checking
account information (just as you would input a credit card number) into
the system, customer service representatives can obtain an approval code
within seconds. Merchants can create checks for immediate deposit, or
electronically deposit checks via the ACH network to fulfill orders
quickly. Check-based payment for customers' purchases can be drawn
straight from customers' checking accounts, eliminating the need for
postal fees to deliver checks overnight and minus the traditional waiting
period for checks to clear. An additional bonus to the merchants is that
funds are 100 percent guaranteed, just as with credit card purchases.
The bonus and convenience with this setup is not just for consumers --
merchants benefit as well. There are a broad range of markets in which
Internet-based and over-the-phone check payments can come in handy.
Essentially, any merchant that relies on real-time billing may be
interested in this kind of electronic checking, including online merchants
in both the consumer and business-to-business arenas, brokerage firms,
public utility companies, cable operators, cellular phone/paging
companies, banks and collection agencies. For all of these businesses,
electronic checking may serve as a key differentiator in the rapidly
growing and daily more competitive electronic commerce arena. By expanding
payment options, merchants can offer added convenience and choice, which
can help retain existing customers and attract new ones. In today's
customer relationship management-oriented business climate, offering
choices to suit every customer not only makes good business sense, it is
becoming a prerequisite to keep a company afloat. By ensuring secure,
direct payments, electronic checking can help reduce a company's operating
costs, streamline cash flow and eliminate potential business risks.
Joseph Grueter is treasurer of Intell-A-Check, Corp., a provider of
electronic payment solutions. The company's flagship product, Intell-A-Check!,
is an electronic check writing application designed to support check
payments over the phone and through the Internet, fax, VRU and direct
debit programs.
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