Online Stores That Accept Checks

from the bill-me-later dept

As more people worry about online credit card fraud and identity theft, while e-commerce providers worry about attracting new users, some are going to a much more old fashioned method of accepting payment: they're taking a checks. With a company named I4 Commerce acting as the middleman, many e-commerce sites now offer a "bill me later" option. I4 Commerce does a quick instant credit check and then allows the purchase (if the credit check goes smoothly). The buyer then receives an invoice a few days later which they can pay by check. I4 pays the merchant directly, so they don't have to worry if the individual pays or not. I4 claims that a very low rate (4%) default on their payments, but as one person in the article notes, that may just be because scammers haven't realized the potential yet. Also, the article doesn't note how I4 makes its money, and it seems likely that they're charging interest on these "bill me later" loans (as well as a transaction fee from the merchants using their system). Without any of the details being provided, it sounds a little questionable. There are an awful lot of "payday loan" type places that offer easy loans with ridiculously onerous terms. It's possible that I4's terms are perfectly reasonable (and the low default rate suggests that's true), but it's odd that the article doesn't clearly state what they are. Checking out their site turns up that there is, indeed, a 17.99% interest rate, but only for customers who choose not to pay the full amount within 25 days. So, the reality of this isn't so much that online stores are accepting checks, but that they're accepting "instant credit" provided by this one company.