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.

[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!

[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.

[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.

[Dragon1213]

Man I need to clear some things up. and if some people get mad at me..good. First and foremost I work cs so let me give it to you from our side. You all with your postings are really just a bunch of whiny cry-babies that get mad when the whole world doesn't go your way. Quit crying. really. No one forced you to use their product in the first place. If you had the money in your pocket you wouldn't be using it. Oh let me guess they offered some promo or discount for you. well you know what if you had the money or werent so obessed with a few bucks off you wouldnt use them. first off your fault for trying to buy something upfront without having the money on hand. simple rule, you dont have the money..dont buy it. and if you do dont complain about someone else giving you money that you dont have then crying because you have to go by their rules for paying them back. I have noticed as a whole that people just want what they want given to them with nothing at all attached. if that's the way you want it use your own money..which if you had you wouldnt be using bml or a cc. ur fault for not having the money! Another thing you all with your I am gonna call an attorney or report it. from a cs stand point..GO ahead. all companies have lawyers for idiots like you. You agree to something and you should do your research and read the fine print. so your lawyers and what really cant do crap for something you idiots fail to do. call a lawyer. almost all cs people will just laugh under their breathe. waste of your time and money, I called up bml and asked a few ?, for the above poster. you are a freaking idiot. amazon and bml never ever had a 90 pmt option. I called bml and amazon. amazon offers a card for 90 day. amazon said they never offered bml 90 days and bml aggreed ( oh yeah it was hard a crap to get through to amazon) so your attorney general cant do crap. it's people like you who make cs people just laugh. and not everything is a scam. most people just want to get something and pay it back when you want how you want and then yall want to yell at us for your stupidity. u should really pay attention to crap you do on cc and other products. dumb people are the only ones who click crap without reading. let me give you some tips for actually getting what you want from cs. one..always be nice..always. we have complete control over what you need and what you get and what you are calling in for. thats why you call us. not vice versa. we get idiots all day long yelling and telling us what we WILL do and what we are gonna do. WRONG and dont think our sups are gonna do anything different. for one they usually cant and for the other if I tell them not to..they wont. you want something be nice. You are no one to a cs rep I dont care if you have doctrine or you have gazillion CC. you are still calling ME and I have control. if you are nice to a person as such as I and you ask nicely I will go out of my way to do anyhing I CAN for you (not anything you want) I will give you some tips to help you out and go out of my way to handle your problem. now if you call in and get stupid. I will tell you only the minimum and not help you out in any way. the ball is in my court..never forget that. I am not power tripping just telling you how it us. TWO do not yell...ever. we have a thousands of way we can help or not if you get it. cs are really nice people on average and I love helping people when and only when they deserve it. not everything is your way but if your nice and dont yell you may just get what you want and more.
in closing. no one told you to use BML if you dont like their service dont use it. no one made you put in the information they needed to set up an account with them ( they said they require last 4 ssn dob address some other crap) if you are entering that info you should read the fine print. and you have to go by their terms..thats what you agreed to and lawyers cant do crap about that. some of you have valid things going on and if you are nice to their cs I am sure they will do what they can. but most of your comments just from a cs standpoint and just pure stupidity. in closing you want something use your own money and dont complain. if I loaned you something u pay me back on my terms. you dont want to use your own money plain and simple. anyhow be nice to cs you may actually get some help. but most of you will just get mad cuz this isnt what you want to hear

[dec0594]

**** U *******!! what a dick ur **** dick squeezer, we have every god damn right to **** yell our heads off, obviously we did read the fine print, cause thats why we knew that there was no charge for 90 days, so your the IDIOT! **** *******. Your the one messing up credit score, BECAUSE you FALSE ADVERTISED!!!! and I'm sure that WILL cause a problem that our lawyers CAN and WILL deal with. SECOND you have no god damn control, because in case you haven't noticed the government is cracking down, so if the attorney general decides to do something, then you guys WILL have no other option but to cooperate. So screw you and BML, its a rip off service filled with people who are also filled with ****! screw this service, DO NOT USE THIS SERVICE!!!! oh and by the way dragon 1213 we already discourage one potential person to use your service. Read above, that is if you know what way that is, dumb ass.

[tracyyx3]

yo, chillax.

your acting if you own the company.
Dont be a ballbuster and quit acting like a smart-ass.

I got bored after reading 3 sentences, why dont you go somewhere else to type up a novel?

[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.

[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.

[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.

[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.