The developer of a payment service that routes transactions through customers’ online bill payment service says it is gaining traction among people who are reluctant to give merchants their credit card information.
Marwan Forzley, the president and chief executive of ModaSolutions Corp. and a co-founder of the Canadian company, said Secure-eBill was designed to hide account information from merchants.
“Typically, people trust their banks,” he said.
When shoppers select Secure-eBill as a payment at participating merchants’ Web sites, the merchant sends them an e-mail with invoicing details. They then log in to their banking site, select the merchant as a biller, and initiate a payment.
Mr. Forzley said merchant customers of ModaSolutions, of Kanata, Ontario, must enroll with MasterCard International’s remote payment and presentment service. They typically get the payment electronically within two days, and they can decide whether to ship the purchased products to the customer immediately or wait until they receive payment.
An earlier version of Secure-eBill connected participating merchants’ sites to some banks’ bill-pay Web sites; when customers wanted to make a purchase they clicked a link on a merchant’s site, which opened a new browser window for the bank’s payment site. Users could log in to their bank’s site and authorize a credit to the merchant.
Mr. Forzley said he discontinued that feature because he was worried customers would think it was a scam. Many banks have told consumers to watch out for sites that link to banks’ sites and to log in to a bank site only if they type the Web address themselves.
Mr. Forzley would not say how many merchants have signed up for Secure-eBill, but he named four: Tool King LLC; the aquatic supplies vendor BigAlsOnline Inc.; the computer supplies vendor CompSource Inc.; and another computer supplies outfit, Neutron Inc.
ModaSolutions announced Jan. 31 that CardinalCommerce Corp., a payment and authentication provider, had agreed to offer the service to its merchant customers.
Mr. Forzley said that 2% to 6% of transactions on these sites are paid through Secure-eBill. “We’re definitely in growth mode.”
Donald Cohen, the general manager of ToolKing.com, said the site has offered Secure-eBill since early January. Now, 4% of its online payment volume is done through the service, he said. ToolKing.com accepts credit cards and other alternative payment options, such as PayPal Inc. and I4 Commerce Inc.’s Bill Me Later, which provides instant online credit.
“We have multiple payment options, so it’s really the customer’s decision,” he said.
He said Secure-eBill and Bill Me Later have comparable volume, though Bill Me Later has been available as a ToolKing.com payment option for five months. He said 60% of ToolKing.com customers using Secure-eBill are new and that they spend 20% more per transaction on average than other customers.
Mr. Cohen said the service is appealing because it is more secure than providing a credit card number. It “has the potential to be a very significant player in merchant processing,” he said.
Sucharita Mulpuru, a senior analyst at Forrester Research Inc., said people who pay bills online are not the same people who are leery of shopping on the Internet. “How many people bank online but don’t do their retail transactions online?” she said.
