Paying with cash on-line

The Internet has done its best to get us to spend hard-earned cash without ever leaving the comfort of home but it is still working on allaying the fears that come with giving out credit card information to a virtual unknown.

A Vancouver-based company is helping to bring the world of e-commerce to teenagers, who can’t get credit cards, and others who suffer from cyber-anxiety and want to keep their card safely off the Web. hyperWALLET, from Twin Lion Systems Inc., is a cash-based payment platform that works like an on-line bill payment system.

Using hyperWALLET is quite simple, according to Patricia Wilkinson, vice-president of marketing for hyperWALLET. She said clients can use on-line banking or telephone banking, and theoretically even a bank teller at a branch, to put money in the wallet. In fact, a user is not even required to have a bank account to fill up the wallet, though one would be needed to transfer unused funds back.

“You register hyperWALLET as a payee just (as) you would hydro and load money into your wallet that way,” she explained.

Wilkinson added that over 99 per cent of the Canadian population is covered in terms of accessibility, since Twin Lion has agreements with all of the major banks and trust companies in Canada.

For merchants the process is just as easy, Wilkinson explained. “We give them the technology and we integrate it into their systems for free because we would like them to offer this cash payment platform.”

No need to ask mom

Today’s youth have unprecedented spending power, and though e-commerce is a perfect fit for techno-teenagers it is not designed with them in mind.

Most Web sites require the use of a credit card to purchase CDs or games and most banks will not issue a credit card to anyone under 18. The easiest solution is to pester mom or dad for the credit card but this falls under the teenagers-don’t-want-their-parents-tracking-their-spending-habits factor.

hyperWALLET can get around that since anyone can use it. Kathy Bennett, marketing manager of Toronto-based Sam’s On-line Inc., agrees that it is nice to be able to target the demographic of shoppers who do not have credit cards. In fact any store targeting teens could find this to be a viable option.

“The youth market is a wonderful demographic because it is difficult for them to buy on-line,” added Catherine Clarke, president of Strategic Profits Inc., a Vancouver-based e-commerce solutions company.

“What is wonderfully exciting about this is that it is literally like walking into a store – you can use your debit card, which would be like hyperWALLET, or you can use your credit card,” she added.

Clarke also sees the hyperWALLET as especially useful during the holiday season when people like to use cash for certain items while using credit cards for others, so they can amortize the payments over time

Of course, the other target market is apprehensive shoppers. Giving credit card information on-line is not everybody’s cup of tea and many Canadians are ignoring the e-commerce option due to fear of fraud.

“It is a cash-based solution for people who don’t feel secure using a credit card,” Sam’s Bennett explained.

reducing on-line fraud

To use the system, a user goes to a bank and authorizes a bill payment to hyperWALLET for, say, $250. As a user you are given a wallet number and a password. Once on-line at a site, you choose the hyperWALLET payment option. At this point you transfer to the Twin Lion system, enter the wallet ID number and password, and authorize a payment for the required amount. Then you are redirected back to the e-commerce site to complete the remainder of the transaction.

“A merchant does not come into the wallet and take [money] out, it is only authorized in real-time by the consumer,” Wilkinson explained. The money goes from your bank account to an escrow account and then on to the merchant.

This reduces the potential for fraud in two ways. First, a merchant never has access to the hyperWALLET and secondly, the hyperWALLET account holds no useful information for a hacker.

“The money is in a real bank account when you are not spending it…so even if they hacked into our system, which we would argue that they can’t, all they would find is your e-mail address and a notation that you have say $41.32 in a bank somewhere,” Wilkinson explained.

So unlike hacking into an e-commerce site and finding thousands of valid credit card numbers, here a hacker would find thousands of e-mail addresses saying joeandmary@yahoo.com have diddlysquat in their hyperWALLET.

hyperWALLET charges the merchant about one percentage point below the going rate for Visa and MasterCard. Plus there is no anti-fraud bond needed to be put up by the retailer as must be done with credit cards, Wilkinson said.

“We absolutely guarantee no charge back risk at all, the only person who can authorize a transaction is the consumer so that is a huge benefit to the merchant,” she explained.

The company goal is to have all of the top Canadian e-commerce merchants on board by the end of next year.

hyperWALLET (www.hyperwallet.com) in Vancouver can be reached at 1-877-925-5381