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Someday there may no longer be such a thing as an alternative payment.This year, there have been several acquisitions or product changes that take alternatives and combined them with a company or product that handles payments in person.
December 15
A startup aims to make alternative payment options as streamlined as using bank-issued cards online by removing the need to authenticate the user at a separate website.
Though the process of typing a 16-digit card number has often been described as clunky, it can at least be handled within a normal checkout page. Alternatives such as PayPal, by contrast, often require users to type a password at another Web page before a sale can be completed.
To make this process faster for merchants and consumers, InspirePay has developed a single payments "hub" for e-commerce sites, though it is still working to convince some alternative payment companies to agree to its methods.
InspirePay, a subsidiary of Inspire Commerce Inc. of Boulder, Colo., enables organizations to "private-label" their own website payment page or shopping cart. The software communicates with the payment codes of the various providers, enabling the consumer to hit one "pay button" to make a transaction.
"You want to do everything you can do to minimize the consumer distraction" of changing from site to site, says Mark Fischer, Inspire Commerce's founder and chief executive.
InspirePay intends to offer the payment-page consolidation as a free service to nonprofit organizations, service merchants, retailers and manufacturers, but it will charge fees in the future for an optional upgraded service, he says.
InspirePay targets service providers and nonprofits for the software, but retail merchants and manufacturing companies with an online presence also have shown interest, Fischer says.
Inspire Commerce operates as a "for-benefit business" that works with nonprofit organizations, and it donates a percentage of its profit back to charitable organizations, Fischer says.
But there are still a few obstacles to overcome. PayPal Inc., for example, has not waived its requirement that consumers to switch to the PayPal site, Fischer says.
Dwolla Corp., another alternative payment provider, has also not agreed to InspirePay's system, though the companies are negotiating the matter.
"We are still working with Dwolla to determine the best setup for Dwolla users, whether it is on the Dwolla site or the merchant site," Fischer says.
Inspire Commerce, a registered independent sales organization and member service provider with Wells Fargo N.A., earns revenue from card processing, Fischer says.
The company also expects more payment gateways to join those already in the InspirePay system Inspire Commerce Gateway, Sage Payments Gateway and Authorize.net.
Tiforp Business Ventures LLC provided funds for InspirePay to develop software and research advancements in online-payment programs, Fischer says.
InspirePay offers a service that could be in demand for online merchants operating small businesses or nonprofits, says Adil Moussa, a senior analyst at Aite Group.
By providing the service for free, InspirePay can attract merchants who do not want to pay an extra monthly payment-gateway fee, Moussa says.
"Other companies provide similar services, but if InspirePay specializes in the field of charities and nonprofits, that would be a good market for them," Moussa says.
InspirePay's model will become more common in the industry by serving as an online payments gateway to provide more payment options and faster service, says industry analyst Todd Ablowitz, president of Double Diamond Group LLC.
"There is a need for this because it makes online payment simpler," Ablowitz says.
