Is 2012 the Year Bank Accounts Pay For Everything Online?

by Jason Unger

I mentioned it briefly in my last post about Verizon’s $2 online billpay fee (which has since been canned due to public and FCC response), but it looks like 2012 is shaping up to be the year credit cards see a legitimate challenger in online e-commerce.

Since the Internet’s inception, credit cards have been the primary means buying things online, whether it’s through standard e-commerce shopping carts or through a third-party processor like PayPal or Google Checkout. Obviously, the “security” credit cards provide and the relative ease of the transaction has made them the default purchase method, but more and more, it looks like bank accounts are on the rise as payment method.

Here’s an example of a notification I received when making a payment using my debit card via my PayPal account, which is linked up to both my debit card as well as my bank account.

You’re choosing not to pay with a bank account. Please note that both bank account and credit card payments are sent instantly, and account numbers are never exposed to the merchant.

You’ll also find that transactions paid with a bank account:
  • Will not accrue credit card finance charges.
  • Let you stay in control of spending and avoid credit card debt.

No matter how you pay, you get 100% protection against unauthorized payments sent from your account.

Do you want to make this payment with your bank account?

Sure seems like PayPal would rather you pay with your bank account and not with your credit card, and as much as we’d like to think it’s because they don’t want to accrue credit card debt, that’s obviously not the reality. (In fact, I was using a debit, not credit, card.)

The credit card industry has had their hand in almost every e-commerce transaction over the past 15 years, taking a little bit here and a little bit there. Over that amount of time, it adds up to a ton of profits for them and lost money for merchants.

I think we’re going to see some real growth in non-credit card based online transactions in 2012. It’s going to be fun to watch.

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