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Early this week eBay announced it will be laying off 1,000 employees, cutting several hundred temporary workers, and reducing open positions.  These moves, made to make eBay’s organization simpler, improve its cost structure, and strengthen its competitiveness, reduces its global workforce by 10%.  At the same time, however, eBay announced that it acquired Bill Me Later, a US-based company that grants eBay’s customers instant online credit.

Instant online credit?  Do we really want to be talking about instant online credit these days?

But Bill Me Later may be a different animal altogether.  Currently used on over 700 sites, including the Apple Store, Walmart.com, and ToysRus.com, Bill Me Later uses a host of different algorithms to extend instant online credit for specific purchases—not for a line of credit.  Prospective customers enter their date of birth and the last four digits of their Social Security Number, and Bill Me Later performs an instant credit check.  The company claims it can provide a yea or nay answer within three seconds.

So, instead of offering instant online lines of credits, Bill Me Later offers instant online credit for a specific purchase.  But what about repeat Bill Me Later customers?  Don’t the repeated credit checks damage a customer’s credit rating?  If they do, eventually that’s going to come back and haunt the user when he or she needs to apply for a more substantial loan—a mortgage, say.  Another verboten word in these troubled economic times.

Tuesday, October 7th, 2008 Both comments and pings are currently closed.

By Robert Pothier