Despite the fact that consumer fear of online credit card use is waning, e-commerce support company MerchantOnline.com is urging e-tailers to make their sites more debit-card friendly with its new MOLpay system.
MOLpay is geared toward those consumers who want to do the majority of their shopping on the Web. To use the system, shoppers must attach a card-swipe device designed by Innovonics, Inc. to their computer keyboards. The device and MOLpay’s software enable the shopper to pay for online purchases with an ATM, debit, or credit card by using the card-swipe device to read the security information on the back of the card.
Opening E-Commerce to More Users
According to MerchantOnline.com, enabling merchants to accept payment via ATM and debit cards will open e-commerce to 40 percent more consumers. A recent study by Forrester Research concludes that consumers are becoming more comfortable using credit cards online, but lingering concerns about giving strangers access to that information “is still the largest obstacle preventing online shopping.”
Based on that information, MerchantOnline.com is trying to bring more consumers to the Internet while companies are still in the process of earning consumer trust. “With MOLpay, these individuals will finally be able to join the exploding e-commerce population, providing eMerchants with a new source of sales at very low processing costs,” MerchantOnline.com CEO and Chairman Tarek Kirschen says.
The card reader has a keypad to allow the customer to enter a personal identification number, and it has a built-in encryption system to allow for secure transmission of that information and instant payment for online purchases. The company claims that credit card purchases are more secure using the reader because users do not have to type their actual credit card numbers into online forms.
MerchantOnline.com envisions that its MOLpay system will make many different kinds of electronic purchases easier. It may be particularly beneficial for stock traders who otherwise have to wait several days for money to be transferred by wire into an online trading account.
MerchantOnline.com also considers its system to be useful for business-to-business transactions and frequent business purchases such as office supplies. Rather than waiting for a purchase order to be processed, buyers and merchants can see their transaction completed instantly when the payment is drawn from a debit card or bank account.
Cheaper for Merchants
MOLpay, on display this week at the Electronic Commerce World 1999 Conference in Orlando, Florida, also makes processing credit card payments easier and cheaper for merchants, the company says. Because the reader submits the purchase information electronically, banks will charge merchants lower processing fees.
According to MerchantOnline.com, banks charge 1.5 percent of a transaction amount to process credit card orders read by magnetic strip. By comparison, card information entered into online order forms typically require mail order/telephone order rates of 2.5 to 5 percent, the company says. Processing fees for ATM and debit card processing fees are even less than magnetically read credit card fees, MerchantOnline.com adds.
MerchantOnline.com says it will initially target high-volume e-commerce retailers Amazon.com (Nasdaq: AMZN), Yahoo! (Nasdaq: YHOO), eBay (Nasdaq: EBAY), Ubid (Nasdaq: UBID), priceline.com (Nasdaq: PCLN) and Dell Computers (Nasdaq: DELL) to use its system.
MerchantOnline.com, founded in December 1997, offers a variety of services for online retailers, including shopping cart software, hosting and e-mail services and other credit card processing services.
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