Amazon.com announced yesterday that the company was taking a stake in the Bill Me Later payment service and that it would make it available to consumers on its website.
As the name describes, the Bill Me Later service enables customers to make online purchases now and pay for them at a later date. Shoppers click on the Bill Me Later option when checking out. The service asks the shopper for the last four digits of their Social Security number along with date of birth. The service does a quick credit check, okays the purchase and pays the merchant. Shoppers then receive a bill a couple of weeks later and consumers pay through online banking or mail a check.
"Bill Me Later has developed a very customer-centric method to make online shopping even easier," said Matt Swann, vice president of payments at Amazon.com in a press release. "We are pleased to make the convenience of Bill Me Later available to our tens of millions of Amazon customers."
Credit cards remain the primary method for purchases made online, but Bill Me Later is seen as an alternative for those who have security concerns or do not carry a card for various reasons.
"Amazon.com and Bill Me Later share the same commitment to making shopping easy for consumers," said Gary Marino, CEO of Bill Me Later. "Just as Amazon invented a new and better way for people to shop online, Bill Me Later has created a new and better way for people to pay for purchases online."
The terms of the deal have not been disclosed. The transaction is expected to close in the first quarter of 2008.
Discussion Questions: Do you see alternative payment options becoming more popular in e-commerce? What impact would that have on e-tail sales? What are the implications for Amazon and Bill Me Later as the result of the former's investment in the latter?