Credit alternatives explored

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EBillme is one of several online payment options for credit-wary consumers
EBillme is one of several online payment options for credit-wary consumers
“As merchants offer other options for payment, they attract a broader range of consumers and drive incremental sales,” said Mia Shernoff, EVP of marketing, Chase Paymentech. As a result, a growing number of online merchants are offering alternative payment methods in an attempt to attract new customers.

Online retailers such as, and have signed on for a holiday promotion with Facecard, a new prepaid Mastercard debit card that was introduced this summer. “The 12 days of facecard” promotion enters any active cardholder with a mini­mum balance into a daily drawing for electronic coupons that are automatically added to their Facecard.

“Prepaid debit cards seem to be a little bit less well known than debit cards and credit cards,” said Meaghan Schaefer, CMO at Edo Interactive. “However, we're seeing tremendous growth in the prepaid cat­egory, which can be attributed to what is going on in the economy.”

Prepaid cards can be easily used as a budgeting tool when consumers load them with a specific amount that is their spend­ing limit, said Schaefer.

Alternative payment methods offer another benefit to retailers: lower mer­chant fees than credit cards. This isn't the deciding factor for merchants, however. “At the end of the day, merchants want to use methods that customers are choosing,” said Cundiff.

Alternative payment methods also are experiencing a surge in bricks-and-mortar stores this holiday season, in the form of layaway programs.

Based on the success that its sister chain Kmart has seen with its layaway program so far this year, Sears recently reintroduced a layaway program, enabling customers to pay in installments and pick up their purchases in time for the holidays.

“In this difficult economic climate, extending the layaway program at Sears is an easy decision and one that we hope will provide additional value to our custom­ers,” said Don Hamblen, CMO at Sears, in a statement.

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