Finance Firms Grant Credit At A Click - Twice

Finance Firms Grant Credit At A Click

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The growing importance of e-commerce as a key distribution channel for consumer electronics hasn't been lost on retail finance companies.

Indeed, just as e-tailers and their brick & mortar brethren are scrambling to take the high ground in cyberspace, so too are the major financial services firms.

Working under the assumption that those who get up to cyber speed first will become the predominant players online, companies including Household Retail Services USA (HRSUSA) and Associates Commerce Solutions (ACS) are ramping up their Internet efforts by offering such services as credit at a click.

"Retailers want to do business over the Internet, and they want to have credit as a prominent feature on their Web sites in order to attract people to their stores," said Jim Crary, a senior VP with Household Retail Services, headquartered in Prospect Heights, Ill. "And we're trying to accommodate them by developing processes that will help retailers do that."

Currently, Household's Internet repertoire includes instant online credit approval. The process, from the consumer's point of view, is essentially seamless, and begins by clicking on a private label credit card icon that appears within the merchant's site. "The icon can appear in conjunction with a promotion, or a particular product that's being hyped," Crary said. "For example, 'This month only, buy this product and get 12 months same-as-cash.'"

The shopper is then moved to a Household Retail Services site where he or she fills out an online application, and a credit approval or decline is delivered within seconds. If approved, an account number is assigned, and the shopper is whisked back to the e-tail site. The customer can then shop the store and, newly empowered with a virtual credit card, charge his purchases to his account. A physical credit card is later mailed to the consumer, who can then use it within the retailer's brick & mortar stores.

In the near future, Household hopes to expand its e-commerce capabilities in order to provide more targeted services to online stores and their customers. "We're working on systems now that will allow our customer service personnel to promote a merchant's products when the consumer calls in for their account balance," Crary said. "We can point that customer back to the merchant by asking 'Are you aware that Store X is offering a special sale on Product Y?'

"The point is," he said, "we're trying to be more proactive to enhance our relationship with stores" -- both online and physical -- "in order to enhance our value in the eyes of our customers."

Similarly, Associates Commerce Solutions, formerly SPS Payment Systems, has been "very active" within the Internet realm, said Terry Oxford, VP of the Deerfield, Ill.-based subsidiary of Associates First Capital. To that end, the company is providing online credit application services to its existing brick & mortar base, as well as such e-commerce players as Gateway and, most recently, Value America. "Last month we launched a private-label card with Value America. We also provide access to our call center and have a credit application Web site where their customers can get an answer in 20 seconds at most," he said.

The credit card has no annual fee and may also be used to make purchases via Value America's toll-free number. Additionally, the e-tailer plans to team with manufacturers to make promotional offers to cardholders.

"By helping to finance purchases simply and quickly, we aim to drive more customers to the Value America site and have a measurable impact on their bottom line," noted ACS president Richard Robinson. Value America chairman Craig Winn added, "Our partnership provides another financing option for customers. In addition, this is one of the ways that we are working to close the 'digital divide' between those with access to technology and those without. Because this partnership makes it easy for people to get credit, we are making it easier for them to access information and technology."

According to ACS senior VP Bill Johnson, his company's Internet goal is to be the "primary source for online credit services, focusing on expedited services and support for varying forms of connectivity and technology," he said. "Value America, our newest client, is a great example of our expertise in online application and purchase capabilities in a single electronic transaction."

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