AT&T to Accept Charges From Online Shoppers

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Editor's Note: AT&T issued a press release disavowing the information that Clickbuytel provided for this story, saying Clickbuytel did not have authorization to do so. "Clickbuytel's characterization in the release of an e-commerce service based on AT&T technology should be disregarded and should not necessarily be interpreted as a preview of an announcement to be made at a future date. There is no information AT&T is prepared to share about any such service at this time. In addition, although AT&T did have a relationship with Clickbuytel for a trial of a service, this relationship was far more limited in scope than the one described in the release."


Telecommunications giant AT&T and e-marketing services firm Clickbuytel Inc. last month agreed to offer an e-business payment system that will allow online retail purchases to be charged to AT&T phone accounts. Clickbuytel said merchants will embrace the no-interest credit program because it offers a more secure way for its customers to buy online.


"There's definitely a psychological sense of fear out there when you look at only 30 percent of Internet users participating in e-commerce," said Clickbuytel CEO Marcus Roberts. "That's 70 percent saying that they still prefer to walk into a store, hand the cashier a credit card and then get a receipt for the purchase in their hand. We, however, think our service can make a difference for Internet merchants."


Clickbuytel, Los Angeles, will market the credit transaction system, claiming it's the first of its kind in the United States, once AT&T, Basking Ridge, NJ, completes development this month.


Rebecca Nidositko, analyst at market research firm Yankee Group, Boston, said Internet service providers and other types of communications companies have used similar payment systems in the United States, but the ClickATT program is probably the first e-tail program to use phone accounts.


Roberts said his firm had signed two companies to the program and expected to have as many as 50 more clients by September. He said Clickbuytel would target firms that want to market to parents of teenagers, adding that the no-interest payment plan would be attractive to parents that were leery of giving their children credit cards with higher interest rates.


"It'd be a good opportunity for parents who want to give their kids pocket money without turning over their credit cards," Roberts said. "The database is efficient and targeted because of AT&T's work through the years. For online boutiques, it will cut customer-acquisition costs. Essentially, they'll be able to ride on the back of AT&T's take-up."


Internet shoppers must have AT&T phone service to debit purchases at Web sites participating in the program. Qualified customers can click the "ClickATT" payment option, enter their personal identification numbers and charge purchases up to $300 to their phone bill. Roberts said the customer's invoice number is then downloaded over a secure link to the browser and validated by AT&T's encryption technology.


Herbal products company Elixir Inc. confirmed this week that it had agreed to undisclosed terms with Clickbuytel to use the system at its Web site, www.elixir.net. The company has sold traditional Chinese teas and medicines from its bricks-and-mortar store in Los Angeles for three years before recently pursuing an e-commerce venue. CEO Edgar Veytia said that AT&T's established market presence would help his firm get untracked online because credit card security was becoming a major issue for potential Web customers who were more likely to trust a familiar name over a new one. He also said the ClickATT program was less likely to be attacked by credit thieves because such customer phone accounts can be debited only at participating Web sites.


"AT&T's one of the most recognizable brands in the world, and people aren't likely to think that all of their information will be sucked out of their computer and posted on someone's Web site." Veytia said. "Consumers are getting more afraid because of situations like the one they've been hearing about with DoubleClick. It's coming to a head."
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