Discovering at checkout that an online merchant does not accept a preferred payment method often prompts consumers to discontinue their purchase. To help retailers keep the transaction process intact, one vendor has launched a payments “hub” merchants may use that consolidates most of the available online-payment options.
InspirePay, a subsidiary of Inspire Commerce Inc., has developed software that enables a merchant’s website to offer customers payment choices that range from credit cards to proprietary systems such as PayPal, Google Checkout, Dwolla and Amazon Payments, the Boulder, Colo.-based online-payments start-up announced last week.
“Our software allows for both branding and payment options to take place in one place,” Inspire Commerce Inc. founder and CEO Mark Fischer tells PaymentsSource.
InspirePay intends to offer the payment-page consolidation as a free service to nonprofit organizations, service merchants, retailers and manufacturers, but it will charge fees in the future for an upgraded service option, he adds.
The InspirePay software enables merchants or organizations to “private-label” their own website payment page or shopping cart by choosing which payment providers and gateways they want to support, and it allows customers to choose which online payment option they would like to use, Fischer explains. Many service providers leverage one payment option, such as PayPal, where the only option is to request funds from a PayPal member to be paid to PayPal Inc., and the consumer ultimately ends up logging on to a PayPal page, he adds.
InspirePay does not set up the online payments provider for the merchant on behalf of the provider, though the company provides setup help if the merchant needs it, he adds. In most cases, the merchant will handle the set-up process.
The software communicates with the payment codes of the various provider sites, enabling the consumer to hit one “pay button” to complete a transaction with any of the online payment providers, the InspirePay website notes.
InspirePay targets service providers and nonprofits for the software, but retail merchants and manufacturing companies with an online presence also have shown interest, Fischer adds.
Inspire Commerce operates as a “for-benefit business” that works with nonprofit organizations, and it donates a percentage of its profit back to charitable organizations, Fischer notes. The company provided a closed-system payment service to few nonprofit organizations using the InspirePay concept before establishing InspirePay as its own company, he adds.
InspirePay software makes it possible for nonprofits to receive donations initiated with the various payment methods in a secure system that complies with Payment Card Industry data-security standards, Fischer says.
The consumer experience may vary because each online-payment service has its own rules. PayPal Inc., for example, requires consumers to switch to the PayPal site for payment instead of allowing them to complete the payment through the merchant’s site, Fischer says.
“We are still working with Dwolla to determine the best setup for Dwolla users, whether it is on the Dwolla site or the merchant site,” Fischer explains.
Des Moines, Iowa-based Dwolla Corp. offers merchants a payment network based on customers converting cash into “Dwolla bucks” to withdraw from a Dwolla account for online or mobile payments at point-of-sale terminals, thus eliminating credit card fees. The company charges merchants a flat 25 cents per transaction.
Eventually, InspirePay hopes to create an application and become a third-party provider of a service that enables consumers to stay on the merchant site in most cases. That way, it could avoid potential lost sales caused when consumers must leave the merchant site, Fischer adds.
“You want to do everything you can do to minimize the consumer distraction” of changing from site to site, Fischer says.
Providing choices for an online consumer is important because each service charges a different rate per transaction, Fischer says. In addition, most online payment providers operate “closed, complex networks with hidden fees that continue to frustrate businesses and their customers,” he contends, declining to discuss specifics.
InspirePay expects to generate revenue from an upgraded paid version of its payments hub that would offer more setup and payment services. Inspire Commerce, a registered independent sales organization and member service provider with Wells Fargo N.A., earns revenue from card processing, Fischer explains.
The company also expects more payment gateways to join those already in the InspirePay system–Inspire Commerce Gateway, Sage Payments Gateway and Authorize.net.
Boulder, Colo.-based Tiforp Business Ventures LLC provided funds for InspirePay to develop software and research advancements in online-payment programs, Fischer notes.
InspirePay offers a service that could be in demand for online merchants operating small businesses or nonprofits, Adil Moussa, a senior analyst at Aite Group, a Boston-based consulting and research company, tells PaymentsSource.
Moreover, by providing the service for free, InspirePay enables merchants to benefit from not paying an extra monthly payment-gateway fee, Moussa says.
“Other companies provide similar services, but if InspirePay specializes in the field of charities and nonprofits, that would be a good market for them,” Moussa suggests.
Industry analyst Todd Ablowitz, president of Centennial, Colo.-based Double Diamond Group LLC, suggests InspirePay is on to something that will become more common in the industry by serving as an online payments gateway to provide more payment options and faster service.
“There is a need for this because it makes online payment simpler,” Ablowitz contends. “When you factor in being PCI compliant and then integrating all of the payment options for merchants in one place, this is a valuable service.”
What do you think about this? Send us your feedback.
