Posted on December - 21 - 2009
The Move to Alternative Payments
While credit card issuers may be unhappy with the growing trend of consumers moving away from credit cards, there seems to be one group besides consumers that are looking to benefit. This group is the merchants, and they have targeted those that are comfortable with using credit but just unhappy with their current credit provider.
Over the past couple of months, while banks were raising rates, many merchants themselves have been looking for ways to earn more this holiday season by offering alternative payment as well as ways to defer payment for several months. This in turn has prompted more merchants to adopt services like that of “Bill Me Later”, which offer financing up for an extended amount of time. Generally the payment is not due for up to 90 days and if the consumer is late on the payment there is a finance charge.
When it comes to why more merchants are starting to offer services like this, it should come at no surprise that the answer is revenue. For merchants, credit card purchases have traditionally made up a large amount of their sells. Now that consumers have decided to use cash only or limited debit card purchases, they must find new ways to keep consumers engaged and continue to offer payment options that allow them to make money.
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