Earlier this year, I’d written about The Everlasting One Minute it took for CapitalOne to process my credit card application in the UK.
In sharp contrast, Bill Me Later promises – and delivers – credit approval or denial instantly.
Bill Me Later is a convenient and secure way to pay on the web or over the phone. Bill Me Later lets users pay without using a credit card. At checkout, users select Bill Me Later as the payment method, simply provide their date of birth and the last four digits of their social security number, and Bill Me Later gets back within a few seconds with an approval or denial decision.
When I tried Bill Me Later recently, it came back with a decision (denial!) truly within a few seconds – there was no “we’ll get back to you in the coming days” sort of response that I’d received from CapitalOne. And, when my sister in the US tried it today, the acceptance decision happened in less than a minute.
Last week, Bill Me Later was acquired by eBay for close to 1 billion USD. Apart from several advantages it offers compared to paying by credit and debit cards, Bill Me Later’s powerful set of credit decisioning algorithms that allow it to take a credit approval / denial decision within a few seconds, and reportedly at lower default rates compared to credit cards, is cited as the main reason for its rather steep valuation.
On the face of it, there seems to be no difference between Bill Me Later’s real-time credit decision and “instant approval” being advertised by a few credit card issuers in the US. Given my experience with CapitalOne in the UK, I am inclined to be a bit skeptical about claims for instant credit card approvals. However, my experience with CapitalOne was in the UK. Whereas, both Bill Me Later and most instant approval credit cards are only available in the US. Given that things can operate quite differently between the US and the UK, I decided to probe a little deeper.
Fact is, in the case of instant approval credit cards, the credit card company does convey an acceptance or denial decision instantly. This is a great improvement over my experience with CapitalOne in the UK.
However – and here lies the fundamental difference between Bill Me Later and instant-approval credit cards – the credit card itself arrives only after 7-10 days, and you can do your shopping only afterwards. On the other hand, with Bill Me Later, you can achieve “instant gratification”: your shopping is complete as soon as Bill Me Later approves your application within a few seconds.