Banking on Trust

As much as Internet users love the convenience and ease of shopping online, many get a case of heartburn at checkout over security and privacy.

A survey done earlier this year by the Pew Internet & American Life Project reports that approximately 75 percent of online shoppers do not like sending personal or credit card information over the Internet. Arash Fasihi, CEO of Vancouver, B.C.-based e-tailer Cymax Stores, understands the discomfort.

“People want to see security,” he says.

Cymax operates more than 100 online specialty stores selling furniture and other big-ticket goods. With no bricks-and-mortar stores to fall back on, Fasihi cannot afford to have potential buyers get skittish before closing the sale. Cymax, operating under the CymaxStores.com domain since 2004, sells big-box items ranging from bedroom sets and office furniture to living rooms and consumer electronics. It also sells under domains that include MoreMattresses.com, MoreChinaCabinets.com, Writingdeskselect.com and SleepSofaSelect.com.

Buying bunk beds, dressers, computer armoires and media storage online requires a greater leap of faith for shoppers than purchasing T-shirts, Fasihi says, but consumers will give it a try if they feel the buying environment is secure.

“First-time shoppers may buy a small item like a nightstand to get a feeling of buying online, and, if that goes through well, they will come back and buy larger items,” he says. “We have customers who pretty much furnish their entire homes with products they buy from us.”

Online buyers more than doubled
The Pew survey notes that the number of Americans making purchases online has more than doubled, from 22 percent in June 2000 to 49 percent in September 2007, and if merchants can solve online shoppers’ concerns about the security of their personal information “the pool of online shoppers would be greater.”

To help assuage such concerns, CymaxStores.com has added a payment option that leverages the manner in which consumers use online banking to pay bills. It has introduced its customers to an online banking-based service called eBillme, which is operated by Ottawa-based MODASolutions. With eBillme, online shoppers pay for their goods through their established banking relationships, never needing to forward credit card information to the retailer.

“They like it because it’s like paying bills online,” Fasihi says. “They’re used to that mentality of paying their bills through their banking accounts.”

Setting up the eBillme merchants’ processing system does not require additional work on the part of users’ banks, says MODASolutions president and CEO Marwan Forzley. His company promotes the service as “the only payment option on the retailer’s checkout” not requiring the release of financial information, which encourages shoppers to complete the transactions, he says.

At checkout, consumers provide a name and e-mail address and receive an electronic bill. They pay the invoice by logging onto their online banking site without providing any additional personal information, Forzley says. The payment transaction is routed electronically from the customer’s bank to the merchant’s bank. Once the funds are received, the retailer then releases and ships the merchandise, usually within three days. Merchants pay a charge of 1 percent per transaction to use the service.

Fasihi says he appreciates the service because it eliminates the need for his company to have access to customers’ financial and personal information. “We want to prevent any of [that data from] being in our system,” he says. “It is unnecessary information and we don’t need it.”

Good funds for the retailer
Customers also have a level of trust that their transaction is being routed through their banks, rather than a credit card company, Forzley says. “It makes it simpler for the consumer: You’re paying for infrastructure that you trust and know how to use,” he says. The system also “makes it simpler for the merchant. There are good funds that they are receiving: there are no chargebacks, no fraud with the transaction.”

Once a customer sets up eBillme service under the CymaxStores.com banner, she can use it on any of the company’s affiliated sites. Fasihi says the service also attracts users who simply prefer cash transactions.

Fasihi finds the payment option valuable in reaching impulse shoppers. With some traditional payment services, consumers will have to open an account, fund it and often wait a week to have it verified before use, blunting any quick-buying decision the consumer might make.

The eBillme service also includes a buyer-protection program that is provided free to shoppers and retailers. The plan includes return and price guarantees, as well as in-transit and fraud protection. (A big feature for merchants is the fact that eBillme handles the return.)

Forzley likens the buyer protection plan to a “debit-like transaction with the benefits of a platinum credit card.

“If you buy jeans and they don’t fit, you can return them to eBillme,” he says. “If they are damaged or lost in transit, it is part of the eBillme product.”