Online Banking Purchases Lower Merchants' Transaction Fees

For the savvy consumer who is ready to shop anywhere at any time mobile payments – e.g., using a smartphone as a wallet when shopping -- make it easy to complete a transaction. The current status quo is to use a credit card or PayPal account to make a purchase, but this is a changing landscape fueled by new mobile payment options and digital wallets (or ewallet).

In the near future, most smartphones will have the capability to act as a wallet to make purchases online and off, and consumers will need to top-up those wallets on an immediate basis.

 One of the bigger problems is that these payments, unless handled by a credit card, are not in real-time as consumers typically experience a delay in processing. Even PayPal takes time (potentially up to two or three days) to deposit cash from your bank account into a PayPal account.

Connecting the Bank and Online Merchants

Many consumers are comfortable using online banking, but the missing piece of the puzzle for merchants is how to connect consumers with their bank accounts during the checkout process.

Enter Mazooma, an online payment processor that makes this connection (consumer to online banking to merchant) directly from the merchant's page at the time of purchase.

Wilson Lee, president of Mazooma said that offering online banking as a payment method simply provides both merchants and consumers with more choice. From the consumer’s perspective they get choice and a non-card based option that lets them pay with cash online.

“From the merchant’s perspective, what we do is offer them another choice,” stated Lee. “On the merchant page you’re typically presented with five payment brands -- the four major credit cards (Visa MasterCard, America Express and Discover), and you might see PayPal.  What we offer is a way for merchants to list 14 different payment brands like Wells Fargo, City Bank, and Chase in the Mazooma online banking button.”

How Cash Checkout with Mazooma Works

The checkout process is easy. Consumers select the "online banking" (powered by Mazooma) button on the cart checkout page, instead of the standard credit card or PayPal payment option. Then the customer signs in to their Mazooma account.

First time purchasers using the service need to register and set-up with Online Bill Pay at one of the 14 major banking institutions supported by the Mazooma service. After the initial registration, you can take advantage of immediate checkout and pay with your bank account funds process.

At this point in the process the transaction is kept between the shopper and the bank—Mazooma doesn’t share it (or store it) and the shopper is logged into online banking system so the customer won’t be asked to provide any financial information such as a card number or login information to the online merchant.

In addition to shopping on websites and checking out with cash, consumers can also use an online bill payment service to instantly deposit cash into their digital wallet or top up their smartphone to make secure and immediate mobile payments at participating retailers -- by simply waving a smartphone  near a scanner to make purchases. 

Mazooma: Cheaper than Credit Card Transaction Fees

On the plus site for retailers, when a consumer makes a purchase using online banking instead of a credit card, the transaction fees for payment processing typically cost less.

“On a relative basis between us and credit cards our standard pricing is 1 percent plus 15 cents per transaction, which is up to half the price of a credit card transaction,” said Lee.

The process for a merchant to setup with Mazooma to offer customers the choice of making purchases using online banking is pretty straightforward. 

Mazooma has a published API that merchants can integrate with their ecommerce solution. Lee pegs the total integration time to be up and running with online banking payments at 20 to 40 hours clock time -- or about two weeks working time.

Mazooma services the traditional online retail market as well as the emerging digital content retail category.

More Mobile Commerce Tools and Tips for Retailers

From beginner guides to expert tips, our selection of mobile commerce articles can help you to better manage your ecommerce business.

• 5 Tips to Make Your Website Mobile Friendly
• Do You Need Mobile Commerce?
• Is Small Business Ready for Mobile Commerce?
• What is Mobile Commerce, and Why Should You Care?

Vangie Beal is a veteran online seller and frequent contributor to ECommerce-Guide.com. She is also managing editor of Webopedia.com. You can tweet with her online @AuroraGG.