Invoice Alternative Payment Services - Fraud Library

The Fraud Practice eCommerce Invoice Payment Consulting Services

An invoice or bill is a commercial document issued by a seller to the buyer, indicating the products, quantities and agreed upon prices between the parties. Many invoices are no longer paper-based but transmitted electronically over the Internet. Standards for these invoicing services vary widely from country to country and should be evaluated thoroughly before implementation.

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Invoice Alternative Payment Services

How Good is it?

In general invoice alternative payment services are a quick, easy and cheap way to bill consumers for ecommerce transactions. Invoicing is more typically associated with higher cost transactions. In these instances the merchant may desire to receive a check or wire payment because of the processing fees associated with credit cards. Merchants may also not possess a merchant account and would prefer to invoice and receive payment.

There are no clear market leaders for the invoicing sector of alternative payments. As recurrent billing becomes more automated and adopted there will be less need for invoicing. The market share and mind share of this service is severely limited, but it will not disappear, and its overall importance will continue to decrease.

• Convenience.

• Traditional and familiar with the older demographic.

• Widespread use.

• Low cost for payment processing.

• Increased bad debt risk.

• Decreasing market share and utilization rates.

Considerations When Implementing or Buying This Functionality    

• These services represent a new spin on an old concept. Invoicing has been around forever and it has evolved somewhat with technology. However, the long-term prospects of this service remain dismal and companies based upon this technology will struggle to survive as invoicing becomes bundled into more and more software packages. Invoicing companies do still provide value to merchants but with increased capabilities by applications such as Quickbooks software the need for a third party service is limited.

• If your B2B merchant, work with government or non-profit organizations the expectation is that you support some form of invoicing.

Estimated Costs – Costs may vary based on the vendor you select. However, the fees that are charged for invoicing services are always cheaper than credit cards and payment aggregators. In some markets and for some verticals this may be a viable alternative and invoicing should be considered despite its long-term decline.

Alternative Solutions – Payment aggregators, ACH payment and credit cards are the most popular form of alternative payment solutions to invoicing services. There are numerous substitutes to invoicing methods because of its simple nature. Viable alternatives can be found for free on numerous web sites and in many software bundles such as Microsoft Office.

If you are in the market for new alternate payment options you should consider purchasing our Guide to Alternate Payment Options. A Guide to Alternative Payments is a prepared research document, 99 pages in length, intended to provide organizations an overview of the eCommerce alternative payment options and markets.  The Guide goes beyond a general market assessment to provide information businesses need to assess solution options and service providers.  The Guide also includes easy-to-understand reference tables on regional service providers (over 100 service providers), preferences and capabilities.

How Does it Work?  

Invoicing is a straight-forward concept that is based on an old technique. Invoicing involves the distribution of a commercial bill from the seller to the buyer. The invoice will contain and indicate the products, quantities, payment terms and agreed upon prices for the products or services. The invoicing merchant will send the invoice to the buyer and wait for payment.

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