The name says it all.
The San Diego payments technology vendor IdeaEdge Inc. is preparing to introduce BillMyParents, a service that would let children shop online and then route the bill to a parent for approval.
The company, which does business as Socialwise Inc., said the service lets families give kids the freedom to make their own choices but without the responsibility of having payment cards. And it gives parents the ability to screen their children's online purchases.
Other payment providers have tried to empower children to shop online, but Jim Collas, the president and chief executive of IdeaEdge, said his service differs because the other providers required parents to set up the account.
"The real key here is to have youth pulling the process," Collas said in an interview Thursday. When kids "want something, boy, they will do anything to get it."
After a child has placed an order, a parent will get an e-mail (and veto power) before the product is shipped. To approve a purchase, the parent must enter their payment card or bank account details, which can be stored for later transactions.
Collas said the service is being tested now with focus groups and is expected to go live "in the coming months."
Another key difference in that, unlike other alternative payment systems, BillMyParents is meant to be presented early in the shopping process, on merchants' product pages and not at the shopping cart or checkout page.
"It's not integrated into the shopping cart because the kids are never going to get there," Collas said. For children to use BillMyParents, they need to know up-front that the service exists and is an option on the merchants' sites. If they have no other payment options, they won't bother putting the item in the shopping cart at all, he said.
In this way, BillMyParents' strategy echoes that of eBay Inc.'s Bill Me Later, which encourages merchants to put its brand on their home page instead of buried among a list of payment types that are typically not seen until near the end of a transaction.
Mark Lavelle, Bill Me Later's vice president of corporate development and strategy, said he was unfamiliar with BillMyParents but that the strategy of promoting an alternative payment option before the checkout page proved crucial to his payment system's success.
"For a new payment method, the more people know about it in advance, the more people will use it at checkout," Lavelle said.
IdeaEdge charges merchants a fee of 3% to 5% of the transaction and charges parents 50 cents per transaction. Parents can pay with Visa Inc. or MasterCard Inc. cards or by an automated clearing house debit.
Other payment products pitched for teen-agers include Visa's Buxx card, which lets parents track purchases; eBay's PayPal Student Account, which lets parents control the funding; and Retail Expansion Network Inc.'s PaidByCash, which offers payment accounts that are loaded with cash at money transfer stores.
Nick Holland, a senior analyst at Aite Group LLC in Boston, said BillMyParents addresses a real need, but questioned whether the service would meet that need.
"Parental control of transactions clearly does have some legs," he said. "There is an opportunity there, but ... the fact that this is primarily online is limiting."
Holland questioned BillMyParents' ability to compete with alternatives such as Visa's Buxx card. "If you want to limit spending, there are card networks that do a much better job of this," he said.
BillMyParents' appeal boils down to whether it fits with its audience's parenting philosophy, Holland said.
"At the end of the day, do you really want that level of control … or do you ultimately trust someone with a credit card and, if they make stupid transactions, you tell them off?" he said.
