Web shoppers' new option: Bill me later

Instead of paying for purchases with a credit card, some online consumers now have another option: a "bill me later" button.

Some seven Internet merchants, including MyMusic.com, have been testing the new feature, which was developed by start-up company I4 Commerce, since earlier this year.

On Tuesday, payment-processing company CyberSource announced that it has integrated the "bill me later" feature into its service and has begun marketing it to its merchant clients, which include Home Depot, Overstock.com and Nike.

The service should attract customers who can't or won't use a credit card online and encourage them to return, said Steve Klebe, vice president of strategic alliances at CyberSource.

"From what I've seen, this is one of the few alternative payment types that has its act together," Klebe said.

The "bill me later" feature works much like a credit card, said Mark Lavelle, vice president of business development for I4 Commerce. After entering their billing address during the checkout process, shoppers click on the "bill me later" button. Instead of asking for a credit card number, the service asks consumers to enter their date of birth and occasionally the last four digits of their Social Security number, Lavelle said.

I4 pays the merchant, then within 10 to 15 days after the buyers complete their initial transaction, I4 will send them a bill for all of their "bill me later" transactions during that time period, Lavelle said. They can either pay the full bill at once or pay a portion of it. I4 charges 17.9 percent interest on any outstanding balances, he said. Much like a credit card company, I4 will bill customers on a monthly basis.

I4 figures its service will be attractive to both consumers and merchants, Lavelle said. Consumers will be able to purchase goods online without having to use a credit card, which should appeal to those who don't have credit cards or who are reluctant to use them online. Meanwhile, I4 charges merchants a lower transaction fee for its "bill me later" service than most credit card companies charge, he said.

"The main thing this product does is it takes the friction out of the purchasing process," Lavelle said.

Lavelle declined to name the companies that have been testing the service. Klebe said CyberSource is hoping to sign up two to four large merchants for the "bill me later" service by the end of the year. I4 plans a big marketing push for the service beginning next year, Lavelle said.

Alternatives slow to catch on
Credit cards have been an obstacle for online commerce. Around 20 percent of American adult consumers don't have a credit card, according to Avivah Litan, an online payments analyst with Gartner. Meanwhile, most purchases in the United States are made without a credit card, according to James Van Dyke, an electronic payments analyst with Javelin Strategy and Research. Additionally, many consumers have been reluctant to give out their credit cards online, for fear of having the number compromised or their identity stolen.

A number of start-up companies have tried to fill this gap by introducing alternative payment mechanisms online. Last year, Amazon, for instance, introduced a purchase-order system targeted at big businesses and institutions, such as universities. Meanwhile, 7-Eleven is testing shopping kiosks that allow customers to pay for online purchases with cash. And PayPal has proven to be one of the most popular alternative payment services; its service, which lets buyers pay for transactions out of their bank accounts or PayPal account balances, is used for millions of eBay transactions.

But many other payment models such as Flooz and Beenz have failed. Ninety percent of online purchases are still made using a credit card, according to Van Dyke.

Tricky proposition?
I4's "bill me later" feature could prove costly to the company, Van Dyke said. The company is liable for transactions where a consumer receives goods from a merchant but doesn't pay for them. Additionally, I4 will have to pay the expense of authenticating consumers. That may prove the most difficult part, because some of the target audience for "bill me later" will be consumers who don't carry any credit cards because of bad credit, Van Dyke said.

"There's an opportunity here, Van Dyke said. "Someone's eventually going to get this business. It's just going be tough for whoever does get it to make it work."

Although I4 is allowing customers without credit cards to purchase online, it's approving less than half of the "bill me later" requests from such consumers, Lavelle said. Meanwhile, the company is working closely with merchants and using their customer data to help determine credit risks, he said.

"Most of the merchants we work with don't have huge fraud problems with Visa or MasterCard," he said. But those merchants are upset because they still have to pay high credit card transaction fees, he said.

But privacy issues could be another problem for I4, said Gartner's Litan. Consumers are extremely reluctant to give out personal data online, especially social security numbers, Litan said.

"People are really nervous about it," Litan said. "They have a big uphill battle," even if they are only asking for dates of birth and the last four digits of Social Security numbers, she said.

"That's probably almost as bad if not as bad as giving your credit card out. For some people it's even worse."

[Hooper561]

Bill-Me-Later is a scam

I bought a product through www.sportsauthority.com. I used the Bill-Me-Later option that was supposed to be no payment for 90 days. Sounded good.

I then started receiving calls from BML to arrange payments. I told them that I had the no pay for 90 day option and they told me that it sounded like it was a problem with Sports Authority and I should contact them. Sports Authority said I should tell BML that they were in the wrong.

After researching the net, I found out that other people have received this same "run-around" treatment from BML.

To top it off, the next time that I was late (keep in mind this is over a $10 payment), they called me on a Sunday morning at 8 a.m. They didn't even offer an apology for waking me, they just said, "Yes Sir, I know what time it is...and we will continue to call until you make a payment." (ON $10 !?!?)

Any time I see the BML logo, I will run the other direction. BML is a SCAM.

[Hooper561]

....I also want to add:

My last payment before they started calling me was $100...and yet they want to call me at 8 a.m. on a Sunday and be rude.

Using Bill-Me-Later is just asking for trouble...even though it seems convenient at the time.

Just say NO

[clarot1]

BILL-ME-LATER SCAM CONFIRMATION

I just wanted to add that I also experienced the Bill Me Later Scam. I purchased a MAC Book Pro from Apple Store with the promise that it was 6 months no interest and no payments. Bill me later billed me right away with immediate payment due. I called them and provided them with the information Apple gave me and they took 3 weeks to try and resolve and they decided that it was legitimate and they billed me again for immediate payment plus interest! It was a $3600.00 bill! AS FAR AS I'M CONCERNED, SOMEONE NEEDS TO MAKE THE PUBLIC AWARE OF THE SCAM THIS IS AND FURTHERMORE, RETAILERS SHOULD BE SHAMED FOR GETTING INVOLVED WITH THEM AS WELL.

[bruce3735]

Avoid Bill Me Later. They'll offer you $100 off on eBay without telling you that only some eBay auctions feature Bill Me Later. In my opinion, it's a scam to get you to bid higher on the phony promise that a rebate is coming. Calls to Customer Service fall into an endless loop with Bill Me Later and PayPal each claiming its the other's problem.

[levisethking]

billmelater is THE biggest scam. billmelater is the billing company for a particular timeshare company i am a customer of. i was promised that bills for the timeshare we purchased last year would be $49.00 a month with 0.0% APR. not only did the billing begin immediately, but the bills were about $120.00 a month with a fixed 19.99% APR. i am seriously ticked about this whole thing and i want my money back! please stay away from billmelater.

[drklfk]

Agree - DO NOT USE BILL ME LATER!

I was scammed by the merchant and filed a dispute.
Bill Me Later does nothing. Just whatever the merchant says goes.
They told me, the only recourse was to file a suit against the merchant.
I might as well have sent cash!
Beware of Bill Me Later!

[docker1228]

I am also a victum of BML scams. They are charging me for product I did not even order...reported with police, filed a claim with their so called fraud depertment and they quickly just state that it is denied because merchant proved delivery....yes product just left on doorstep without signature required. thousands of dollars worth of computer equipment and no signature required...fraud at its finest and they could care less...what kind of investigation is that?
I reccomend that no-one use this company and it's service or you will be the next in line contacting your Attorney Generals office and Better Business Bureau filing complaints.

[flyingace]

Yep -scam is too mild a word.

I signed up with Earthlink for a 90-day trial that I paid for. BML started billing me right away. Even though I closed the account in 45 days, they kept billing me services not rendered. They continued to bill me for 6 more months and added late fees. I called them 4 times and got the same runaround - I had to call Earthlink. Then Earthlink would say it wasn't their problem because I had no account with them. BML REFUSED TO STOP BILLING ME EVEN THOUGH THEY KNEW I DID NOT HAVE AN ACCOUNT AND REFUSED TO CALL EARTHLINK FOR VERIFICATION. They are totally crooked and DO NOT GET INVOLVED WITH THEM.

[robertmorris2]

Predatory Lenders

I have had some dealings with 'shill me later'. They have interest
rates of 112.73%..that's right. I have turned their name and their
practice into the states attorney general office for investigation. I
hope something will come of it. They are a BUNCH OF CROOKS !!
Don't ever use this service...

[MaverickMitchell]

WOW!!! Thanx for the info. I was almost enticed to save $5 by using BML on my purchase.

NOT after reading this! I'll stick to my cc.

[ghjkx]

1. Your ssn was never to be used to identify you (historically).
If you use it with bml you may be giving up certain rights.
2. This comb has been in used forever by police
This has been proven to work, but how much easier
is it to counterfeit (& keep) static information.
3. A cc number & validation code change with every card.
Ever had a recurring billing you couldn't get rid of
without terminating or placing a hold on a card?
So, how do you plan to get rid of recurring pests?
(John 3:3,7 "You must be born again".
-- even that won't help this one!)
4. Combine ssn, dob, & ip (location)... this combination
ties you directly into the government system. Before
there wasn't an effective way for the government to
really tie into you directly (without the banks help),
card info that changes often was unruly...
-- static is easy!

I'm not encouraging anyone to hide. Allowing the exploit
of personal information for gain (your fault [I'm not talking
about the merchant or stores]), i.e., the exchange of your
personal information for convenience will 'bite you in the
end'.

Personally, I wouldn't do it; but I can't tell you what to do! ;)


P.S. Oh, and check out the new "proximity cards".

[knobob--2008]

I wouldn't advise using this service on-sale items or discontinued merchandise including otherwise responsible stores such as Buy.com, Amazon.com, etc. If an item is not available and the store cancels the order you'll have an awful time convincing BML that there is no balance due. You'll receive notices of missed payments, harassing phone calls, penalty fees will be added, and your credit records will be negatively impacted. Straightening out such incompetence will far exceed any value received.

On the other hand, for items you're sure will be delivered correctly and without damage, the service can be used to your advantage.

[Cholla3]

I kinda of figured this because most of people complaints come from that they never recieved the murchandise and BML billed them anyway. On the other hand i hevent herd any complaints from people who acually recieved there things unless it was about the 90 day thing.

[Phreaks]

BML is a predatory service, higher than advertised interest rates, and good luck getting them to honor the "No payments for 90 days" advertising.

Buyer beware.

[SLYF0X53]

I took advantage of the Bill Me Later option when i purchased a 52" LCD TV from Amazon because of the promise of 90 days no payments, no interest. Nine days after I made my purchase (2 days after I recevied my TV) i got my first BML bill telling me that my first payment was due 12/29/2008, 30 days from the date I placed my order on-line. I called BML twice. The first time I was told that they would make the changes to my account and they instructed me to check my account on the internet for verification. I waited a week, went on-line discovered that no change had been made. The next time I emailed them and they came back and told me that there was no such promotion being offered by Amazon at that time (even though it was clearly posted on the Amazon site). BML suggested I contact Amazon. I called Amazon and spoke with a woman for whom English was a second language. After 20 minutes on the phone she came back and gave me some gibberish over Amazon only having a 50% acceptance rate for BML. I kept asking her to explain but she wasn't able to communicate well enough for me to understand. I then emailed Amazon customer service last night. This morning then emailed back that they would have investigate my claim and that it would take 2-3 days to get back to me. They either had the 90 option, or they didn't. How much of an investigate does it take?
I am inclined to agree with the others who have posted to this forum. Bill Me Later is a scam. If I do not get a satisfactory answer, I will be notifying the PA Attorney General for assistance.

[nicole_riffel]

I have never used the bill me later and I dont think I would ever use it. For dragon1213 I believe if anyone the cry-babie it is you. Your the one going on and on about how it is dealing with people and you have no other way of taking it out but to write on here. Really it seems like the place is riping people off. It not just ONE person it seem like many people are getting ripped off by this place. Sure if you take money from some where else you should pay it back but if you set up rules such as no payment until 90 days then they should not get charge until then. Not two weeks later and sent in the mail.

I also believe that getting woking up at 8 in the morning and being talk to like that is wrong. I dont care who you are or where you work at there is a manner you are to speak to custmers and that is not it. I understand that you have to hear from screaming people all day but that gives you no right to take it out on the next person you have to call or work with. You talk about other people who need to be nice you also have to do the same. All i know is reading this page and the reviews people give it it shows that this BML seem like it is cheating people. You are the only one who gave a long speach about how it is everyone fault. I am sorry but if there is 10 people having the SAME problem with this place that telling you something.

[jasu48]

I bought a month's worth of food from NutriSystem on Jan. 1 and decided to use Bill me Later so i wouldn't have to use my credit card. After finding that the food was mostly so bad I couldn't eat it, I called NutriSystem and cancelled, then send back the food I hadn't eaten. I just received an email from Bill Me Later saying that almost $200 had been credited to my account, which they said they would return to me in 60 days. Sixty days! That's ridiculous. So I wrote to them and told them I wanted them to send me a check or return the money to my checking account immediately. It's a Sunday morning, and I got an email within minutes saying that they would send me a check in 10-15 business days. I still don't think that's satisfactory, but it beats the 60 days they originally said they were going to hold my money. I'll never use Bill Me Later again.

[LawHoo97]

I think that you are forgetting that Bill Me Later doesn't keep your money. Rather, after you pay them, they need to send the money to the company that you bought the product from. Thus, if you have a problem with your product, they need to go back to the other company to get your money - which takes time. Additionally, they need to contact the other company to confirm that you send the stuff back and that you complied with that company's return policies. Finally, if you tried this with your credit card company, you'd be waiting more than 60 days - they have over 30 days to just investigate the return before they even need to think about sending your money back. It sounds like you got a good deal from Bill Me Later - you might want to reconsider.

[dec0594]

oh plz law hoo ur just like that dragon 1213, ok im not trying to be rude to YOU, but i mean cmon maybe they should say something about waiting that long in like an email or on the website BEFORE you use the service, you know? yeah, im not trying to be rude to YOU.

[Annamge86]

Woa! I was considering using BML. I'm a Design student in need of a MAC, but I think I'll just wait till I've saved the whole amount. It's not worth the risk.

[Zupek]

why dont more companies use paypal? It comes directly out of my VERIFIED checking account! I am not giving a single penny more then have to, for these over greedy executives. My rate went from 12% to 33% because of the all this bail out shyt. screw that, people are starting to learn. USE CASH. If the purchase is more then 75 dollars, I wouldnt EVER use BML.

[Ezman1227]

You do know that Bill me Later is a subsidiary of Paypal, right?

[spifunk]

Thanks, NOW I KNOW and THAT'S HALF THE BATTLE, RIGHT? I am so sick of these companies taking advantage of us. I mean, we all agree that we will pay, but damn it, they should honor there end of the bargain. To say that we are cry babies is just nonsense. I think dude is just an idiot who thinks he knows it all. Or he is a crook just like them. And guess what? I do have the money and I wil use Bill Me Later, NOT! I'mma just pay with my debit card and laugh at these clowns who want to take advantage of us, by not using their service, and telling EVERYBODY I KNOW to NOT use this service and spread it like a virus, or a wild fire, cuz believe me, all it takes is word of mouth. So take that. DRAGON sounds like he sleeps wit the enemy. HA HA HA.

[Cholla3]

LOL sleep with the enemy? He is the enemy

[1SlowSi]

First I would like to say this... Who writes reviews? usually only the people who have had bad experiences write bad reviews. Seconds, I have used bill me later quite a few times and have had zero issues. And no payments thing is related to the store you bought the product from. Thats some sort of agreement with BML and the merchant. As I speak, I am taking advantage of the 6 months no payments and its working perfectly fine! Sorry about all your problems, but hey, it happens to the best of us. Good luck with future uses of BML.

[georgige2]

In my opinion, these people are bordering on predatory lending practices. After a couple of statements (via email) they disappeared. Of course I then forgot about the balance due and let it lapse. Not my style or usual method of operations. They then sent a lame email saying that they had mistakenly not sent me a recent statement and that if I paid the amount shown that they would forgive some of my charges. Tried to figure this out and by the time I did, they had slapped another nasty charge on me. When I protested they smugly stated that this was legal and basically, tough luck kid. Really pissed me off. I paid the creeps off and have no intention of ever doing business with them again. Hopefully, I will be able to clue in others about their sleazy ways.

[HBSSLaw]

Not sure if you're from California but I?ve read stories about consumers being charged inflated interest fees ? some exceeding an APR of more than 100 percent.

I work with a law firm investigating Bill Me Later for unfair billing practices and they want to hear from California residents who may be interested in participating in a case. You should think about sharing your story at http://www.hbsslaw.com/bill_me_later.htm.

Tina

[Blackberryluvr]

Well; I'm like Dragon. And when I'm finished; you all can cuss me just like some of you did he/she. !st off. dec0594 needs to have his/her mouth washed out with soap. You are nothing but a whiny baby that loves to trash talk someone you don't even know. No-one EVER told any of you that you HAD to use Bill Me Later. You should have read everything in fine print & everywhere before you used it.

I have been using their service for 3 years now. I have bought a desktop & 2 laptops. And I have also bought an entertainment center. I have NEVER had a problem with them. Not to say it won't happen. But thus far I have enjoyed using this service. And if you don't want to use credit cards; to me it's the best option there is. So go ahead & cuss me now if you like. I'm a big girl & can handle it. Although I don't like the filth spewed from decs mouth because I am a Christian person. And using the LORD'S name in vain is something that I hate more than anything.

[Rxxdoc]

Safer to borrow from the Mafia.

I made a mistake on a 168 dollar purchase and it ends up costing me $61 dollars in fees! ***!

That's like 36% interest!

Our gov't gives banks billions of our money, and the banks show their gratitude by screwing us blind.

Sorry about the economy, but I am done buying things if I don't have the cash in hand.

Might be legal, but I don't have to use their service.

[HBSSLaw]

Not sure if you're from California but I've read several stories like yours. I work with a law firm investigating Bill Me Later for unfair billing practices and they want to hear from California residents who may be interested in participating in a case. You should consider joining the investigation and try to get some of your money back! Go to http://www.hbsslaw.com/bill_me_later.htm for more.

[Cholla3]

Elaborate on your service, what exactly happened? did you miss a payment?

[trice65]

I have been with BML for about 2 years now and I haven't had a problem. Any business will contact you are late or don't pay they will call you. Me & my husband both have accounts with them. So far so good.. Most of your credit cards will call if your a week late.

[gunnjr]

Interesting (abeit a little old at this point) thread. I was literally 1 click away from using BML for the first time when I decided to look for some online reviews. I had two reasons for considering BML:
1) $25 on a $300 purchase. Not huge, but, hey, it'll buy dinner.
2) was budgeting a purchase for next month and this would allow me to take advantage of a sale item within my forcasted cash flow plan.

After reading this thread and thinking a little more, there's no WAY I'll use the service. Quite simply it comes down to this. As with any transaction you're counting on the other party to fulfill their end of the deal ($25 off, 90 days to pay, whatever the case may be). Based on the the above it seems at least somewhat likely that BML will not fulfill their end of the deal. Simply not worth the risk just to save a few bucks and enjoy immediate gratification.

Additionally, in thinking about it, BML is basically a credit card company. The big issue for me is that unlike American Express (or pick your own favorite CC) with whom I have a longstanding relationship and who values my business, who answers their 1-800 number, etc. BML's has no relationship with me and likely a strong relationship with the merchant. If it comes down to a charge back situation, who should we expect BML to side with?

So for me, it will be delayed gratification and a hope that some good post Christmas deals will be going on.

[HBSSLaw]

Has anyone from California used the Bill Me Later option for online purchases? I?ve read stories about consumers being charged inflated interest fees ? some exceeding an APR of more than 100 percent.

I work with a law firm investigating Bill Me Later for unfair billing practices and they want to hear from California residents who may be interested in participating in a case. Share your story at http://www.hbsslaw.com/bill_me_later.htm

Tina

[bekup]

I've had a great deal of problems with Bill Me Later...

In Feb. of 08 I signed up for a e-card website that was free for the first 30 days, I selected the bill me later option so I didn't have to enter credit card information. I cancelled my subscription to the website shortly after I did what I had to do, and forgot about it. It just so happened I moved out of my parent's house that week.

In July of 08 I got a phone call from a collection's service. I owed upwards of $200 to Bill Me Later according to the collections agent. I had no idea what she was talking about. I contacted Bill Me Later, apparently they went ahead and billed me the $10.95 enrollment fee for the website, even though the first 30 days was supposed to be free, they had been sending bills to my parents house, which I was not receiving otherwise I would have contacted them sooner to let them no there was a mistake. I contacted the website, they told me they would tell Bill Me Later of the mistake. Bill Me Later basically told me yes we heard from them, but you account is deliquent, and you still owe us $200.00 and that's it. They refused to work with me. I contacted the collection's agency, they were very sympathetic of my situation, and told me I could settle with them for $40.00, I was assured that this meant they would legally never be allowed to bill me again. And since I couldn't get anyone else to work with me, and I had been so poorly handled with the company, I figured the $40 was worth it to just get them out of my life. That was in August of 08.

I still regularly receive a bill every month from Bill Me Later, it basically reads, $0 account activity, $19 late charge, $2 finance charge, $21 amount due. And at the very bottom of the bill it reads, this account is currently closed.

Every month I call them, and tell them they've made a mistake and my account needs to be credited. Every month they apologize for the inconveince and explain that it takes 30 days for the system to kick you out, and that my account isn't technically closed, because if it was it would state it on the bill, and I always respond it does. Every time I ask to speak to a supervisor I'm told they don't have one, or they aren't there, or they can't speak to me. The last time I had to call them I asked if they thought consumers were really stupid enough to pay a late fee and finance charge on $0, his response and I quote was "you would actually be surprised" I then told him if I ever received anything else from them I would not only contact my state's attorney general, but their state's attorney general (corporate is based out of Maryland), and then I would file a complaint with the BBB. I received another bill yesterday.

[bmlexp]

My experience with BillMeLater is a little different, and with luck, terminated. I ordered a used book through PayPal with no problems. I ordered another used book from a different seller the next day. At check-out, the only payment method offered was BillMeLater. No other. The book was hard to find, I wanted it, I used BML even though I had never heard of it before. I received both books and both sellers were paid. PayPal charged my credit card; BML snailed me a letter stating the charge and wanting me to complete registration for a BML account which I didn't want or need. I didn't want a line of credit, I just wanted to pay the bill off.
I couldn't pay the bill as the BML letter did not inform me of my new account number except for the last 4 digits, making it impossible to credit my check in total payment of $13.48. I thought I could handle that amount without having to make credit payments. After a phone call to BML and talking in a reasonable tone, The nice BML lady gave me my full account number and the payment mailing address, and at my request, cancelled the account.
I mailed BML a check for $13.48 and I'll just have to wait and see what happens next as BML hasn't had time to cash my check yet. BML may be a scam but so far it has only cost me a few hours of my time.
I will never again buy anything from any seller using only BML as their sole payment method.

[linacastaneda]

I cannot thank you enough for posting your experiences. I was a click away from accepting the BML option to pay for a MacPro at the apple online store. This I find surprising though. Apple is somewhat a reliable company and I would have just as easily trusted BML as well. I rather wait before I can really afford it AND have long term peace of mind with my purchase and payment than instant gratification with long term uncertainty. I wish you all well, and good luck!

[knotscott]

PayPal was offering a $50 Off a $90 purchase thru BML until the end of March, 2010. I bit on the deal, but have not yet seen the $50 refund. Several inquiries have resulted in no response, but the latest inquiry informed me that the deal wasn't valid for all items.(BS!). Foul on the play! I wouldn't have signed up if that little detail had be clarified. I'm considering paying off the balance, minus the $50 refund. What recourse do the have if I don't pay the remaining $50?

Has anyone else been burned by that offer?