RocketCash Corp., a payment service that allows consumers to buy online without a credit card, agreed last month to be purchased by NetZero Inc., the nation's leading provider of free Internet access, in a deal valued at $36 million.
In addition to payment processing technology, the acquisition strengthens NetZero's e-commerce capability by giving it access to 200,000 RocketCash accounts, 80 percent of which are held by teen-agers. NetZero's service relies on advertising, sponsorship and market research for revenue.
The deal gives RocketCash exposure to the estimated 4 million users who have registered with NetZero, Westlake Village, CA, for free Internet access service.
“We've always targeted consumers who wanted to shop online without a credit card, with teen-agers being the largest group of those people,” said Carol Kruse, vice president of marketing at RocketCash, Mountain View, CA. “However, we do know that there are a lot of adults who're concerned about shopping online because they don't want to give their credit card [details] over the Internet.”
While acquisition details are still being worked out, Kruse expect the deal to also result in private-label or co-branded versions of RocketCash.
RocketCash has relationships with more than 110 online retailers, including JCrew.com, Alloy Online, Delia's, CDNow.com, Staples.com, fogdog.com, Pacific Sunwear, Amazon.com and Barnes & Noble.com.
The service functions like a debit card. RocketCash users open an account with a check, money order, credit card or gift certificate. The account allows users to shop online with a fixed balance that reduces with each purchase. The average deposit in RocketCash accounts is $36. The average purchase is $29.
Also, RocketCash can meld online and offline currencies such as consumer products incentives and loyalty points programs in a central location at www.rocketcash.com.