Credit cards account for 90 percent of online payments. Checkspace and Achex are taking aim at the other 10 percent with new tools that make it easier for consumers to pay online without using a credit card.

Some 100 million consumers don't have access to a credit card, according to a recent Nilson Report. And a good number of those who do have credit cards are leery of using them online.

Checkspace, which allows vendors and consumers to post electronic checks for online payment, will announce next month wireless pay-by-check services and a paper check service for vendors. Also in January, the company will announce a payment reminder service.

The company's payment method stores consumer financial information on its servers and does not send it out over the Web to merchants. Rather, it transfers cash from a consumer's bank account through the National Automated Clearing House network, or ACH, into a merchant account. ACH is run by the federal government and is used by financial institutions and others to transfer funds.

Separately, Seattle-based Achex, which uses the ACH network in the same way, announced this week that BlueLight.com, the online retailer backed by Kmart, had made the Achex service available on its site.

Part of Kmart's overall strategy with its middle- to lower-income consumers is to make the Internet more accessible, said Janet Ball, director of advertising for BlueLight.com.

"A lot of our customers don't have credit cards, and for some, they just don't want to put their credit cards on the Web. There is a lot of concern about security," said Ball.

In the same vein, Kmart last week took over the operations of Spinway.com, which had provided free Internet access to BlueLight.com customers but shut down because of revenue shortfalls. Kmart will operate Spinway as an independent unit at least through the holiday season.

Checkspace and Achex aren't alone. Others in the fieldââ,¬"like PayPal, which has 4.5 million consumers and 100,000 merchants signed on to its peer-to-peer payment systemââ,¬"are growing at a steady clip, according to Jim Van Dyke, a senior analyst with Jupiter Communications, in San Francisco.

Big boys have plans, too
Not to be left out in the cold, major financial institutions are working on their own alternative payment schemes. San Francisco-based Bank of America has inked a deal with CheckFree Holdings Corp. to develop new platforms for person-to-person and other Internet payments. Those platforms are due sometime in 2001, according to company officials.

Wells Fargo purchased an equity stake in VeriSign to develop online payments and bill presentment.

In the meantime, Wells Fargo is hoping to capture the holiday shopping crowd with its "WellsFargoEasyOrder" payment service that allows consumers to use an electronic wallet system to pre-populate online forms, eliminating the need to re-enter shipping and credit card information with every purchase.

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