The U.S. economy has entered a vicious cycle where housing, employment and financial troubles are forcing consumers to tighten their purse strings and closely evaluate their every purchase. Retailers are also feeling the grip of a tightening economy as they compete aggressively for a diminishing number of buyers' dollars.
In response, innovators in e-commerce have introduced creative marketing models and alternative payment systems that offer more security than credit cards, no interest, and free products or purchase incentives. These methods are especially attractive to online merchants because they actually increase a customer's willingness to buy and create new revenue streams.
PayPal was a pioneer in this space, and its $1.5bn price tag shows just how valuable alternative payment methods are--especially since it pulls in billions of dollars of revenue for online auction giant eBay. The current success of some companies' innovative marketing models, as well as firms like Bill Me Later and TrialPay, indicate that alternative payment platforms will soon become a mainstream player in the multibillion-dollar payments industry.
Source: CRM Buyer, http://crmbuyer.com
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