Mazooma Looks to Lead Cash-Based Online Payment Space
By Kenneth Corbin
At a time when consumers are understandably skittish about taking on new debts, the notion of pay-as-you-go shopping could be heading for a resurgence.
Or at least so gambles Mazooma, an online payment services provider with a business model built around linking directly to a purchaser's bank account, circumventing the credit card landscape and providing discounted transaction rates.
"Simply put, there's a disconnect between what consumers want and what online sellers are offering them," said Mazooma President Wilson Lee.
Mazooma is looking at the macroeconomic headwinds that have roiled the subprime mortgage and credit card markets, banking on the notion that consumers are not looking to take on any more debt.
But they still shop. And for Mazooma, that means that online sellers are missing an opportunity. The company notes that at present, just 35 percent of ecommerce shops accept a payment option that doesn't link to a debt-based account.
"There will always be a need for credit cards, but to attract as many customers as possible, online sellers would be wise to pay attention to current spending preferences and offer cash-based payment options too," Lee said.
What's more, Mazooma boasts that its processing fees run half the rate of credit cards, with a discount rate of 1 percent and a transaction fee of 15 cents. The firm has accounts with the 14 largest U.S. banks, and touts a coverage rate of 75 percent of all consumer bank accounts.
With just north of 200 online merchants signed up, Mazooma is early in the game, though it has ambitious plans to expand its footprint throughout the course of the year.
The company is also encouraged by new developments in the digital-wallet space, including recent offerings from Visa and Google. Coupled with new devices and pathways to discover Internet merchants, the online payment space is poised for a rapid and quite likely unpredictable transformation, according to Mazooma, which is vying to position itself as a leading funding source for emerging e-wallet offerings.
"The buzz around digital wallets will continue to grow over the next while, as will the excitement generated by recent developments in mobile and social networking commerce, especially as more and more consumers shop with smartphones and tablets. The benefit to online sellers in offering an e-wallet service is that they'll suddenly be able to attract the growing numbers of tech-savvy consumers who want to make instant purchases without entering card details each time," Lee said.
"The most important consideration for online sellers in the coming months will be to remain agnostic and open, and not lock in to any one solution while the market shakes out."
About the Author
Kenneth Corbin is a freelance writer based in Washington, D.C. He has written on politics, technology and other subjects for more than four years, most recently as the Washington correspondent for InternetNews.com, covering Congress, the White House, the FCC and other regulatory affairs. He can be found on LinkedIn here .
About the author:
Kenneth Corbin is a freelance writer based in Washington, D.C. He has written on politics, technology and other subjects since 2007, most recently as the Washington correspondent for InternetNews.com, covering Congress, the White House, the FCC and other regulatory affairs. He can be found on LinkedIn here.
You may quote up to 50 words of any article on the condition that you attribute the article to EcommerceBytes.com and either link to the original article or to www.EcommerceBytes.com.
All other use is prohibited.