New pay options for underbanked

Thirteen percent of consumers lived below the poverty line last year, according to recent data from the US Census Bureau. Meanwhile, the unemployment rate is at nearly 10%. Sobering statistics such as these — and the fact that consumer spending has slowed to a trickle — are forcing retailers to become increasingly flexible with their payment options to attract customers.

For example, this week, Sears Holdings Co. will allow online shoppers to pay directly from their online checking accounts through a partnership with online payment service provider

The retail holding company has a robust lay-away program for Sears and Kmart shoppers. Last month, it launched a holiday savings gift card program that lets buyers earn 3% on money they save to a Christmas Club card before November 25. Sears is looking at other payment methods as more customers use cash or debit cards.

“Consumers are deferring big-ticket items until they absolutely have the cash saved up to buy them,” said Chris Lefebvre, VP of financial services at Sears Holdings Co.

He described a “fear factor” among some consumers when it comes to using credit cards: “There are some people who are legitimately financially depressed due to job loss or financial strain, and there are others who are holding back in fear they might lose their jobs. We’re trying to help both types of customer.”

Other retailers are considering ways to serve the “underbanked” customers – individuals who do not have online checking or credit card accounts. EBillme launched a “walk-in” payment option for Web shoppers who do not have online banking or credit cards this month. Sears is not yet adopting this program, however, several other retailers are including

“In the past, many of these of these people would browse, but not buy,” said Jeff Wisot, VP of marketing at e-commerce site The effort could enable an additional 72 million people in the US to shop on the Web. Wisot hopes to see an increase of online shopping on his site as a result of the walk-in option.

“There’s a fundamental reason for marketers to take an interest in this new market,” said Marwan Forzley, CEO of “It is a new customer that has been underserved in the past – they aren’t the first segment merchants usually think of, but there has been a lot of recent focus due to the downturn.”

Forzley described the cash buyer as making less than $40,000 a year. Often, that group includes seniors or members of a disenfranchised or migrant community that does not have access to banking. EBillme lets consumers order online and then pay in cash at one of 75,000 locations across the country. has partnered with MoneyGram International, IPP of America and PreCash to provide a network of payment outlets. EBillme confirms receipt of payment before informing the merchant to ship the product ordered. The site is also planning to launch offline marketing efforts at the locations where it is offering the service.

Wal-Mart launched a similar walk-in program last month. It is allowing customers to pay bills in person outside of regular work hours at Wal-Mart MoneyCenters and customer service desks nationwide.

“We’re introducing walk-in bill pay to provide another affordable money service option that will help families manage their monthly budgets so that they can save money and live better in these tough economic times,” said Jane Thompson, president of Wal-Mart Financial Services, in a statement.

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