Bill Me Later: Big Plastic's Online Challenger

A key question is how fast I4 can convince harried e-tailing outfits to put Bill Me Later on top of their to-do lists. But some merchants who have done so say it's a no-brainer. For starters, I4 charges a fee of 1.5% on transactions, vs. 2% or more for Visa, Mastercard and other leading credit cards -- a significant savings for low-margin retailers. "As a merchant, we've always been concerned by the fees the credit card companies charge," says Ken Penny, general manager of Continental.com, the airline's e-commerce site.

More important than cost savings, say these merchants, is the fact that Bill Me Later gives them no-risk access to a new infusion of customers. There are those shoppers, for example, who have looked online but never bought, and others who are attracted by the financing promotions that I4's payment system makes possible.