Until now, industry leaders and agencies that focus on online security have always suggested that consumers pay for e-purchases with a credit card. However, not all shoppers have credit cards, and there are those who might not choose to use one if given the option.
Enter the virtual check. This new payment method is the result of technology developed by TeleCheck and Equifax, two companies whose solid real world reputations may help establish the procedure with wary e-consumers and merchants.
The Sales Pitch
Proponents of the virtual check are betting that several factors will help broaden its appeal and accelerate widespread use:
The technology that drives virtual checking enables banking institutions to clear checks as fast or faster than approving credit cards.
11 percent of online purchases are already being paid for with traditional checks, which can take up to several days to clear. Virtual checks, because of their instant access to consumer data, will help expedite cash flow for merchants who accept them.
Consumers who have online bank accounts that include virtual checking will deal with just one company for all of their financial services, rather than banks for checking and other companies for credit.
Technology is in place to allow virtual checks to be a part of digital wallets. Digital wallets store individual consumer data so that the buyer does not have to enter personal information on each Web site accessed for purchases.
Conceivably, a consumer will be able to select the desired merchandise and refer the merchant to a virtual check in a digital wallet, where the merchant will take steps to debit the customer’s virtual checking account. By some estimates, purchases may be completed in less than one minute.
Convincing The Skeptical Buyer
The great hurdle in establishing virtual checking as an e-commerce norm will probably be in convincing consumers that it is safe to use the technology. Consumers have already been slow to warm up to revealing credit card numbers online, and they are only now becoming somewhat accustomed to that necessity.
To allay some of those consumer fears, checking institutions will initially ask new customers for pertinent data, including Social Security numbers. Consumers will establish their identity with the institution, and be assured of their right to privacy.
To use a virtual check, the consumer will probably be asked to identify his or herself with a unique code, at which time the check will appear on the user’s screen. The consumer will then fill in the appropriate account number to finalize the transaction.