On the seventh floor of a generic building on Deereco Road in Timonium, a young company is trying to change the way people shop online by providing a payment alternative to the credit card.
Called Bill Me Later, the seven-year-old business is taking on major competitors, including MasterCard, Visa and PayPal, which made its name as an online payment provider.
So far, Bill Me Later is holding its own.
It is the sixth-fastest-growing company in the country by revenue - on track to bring in more than $100 million this year - according to Inc. magazine's September issue.
Chief executive Gary Marino was named a Maryland Entrepreneur of the Year by Ernst & Young last year. And the company raised nearly $72 million in venture capital investment last quarter, the biggest take in the state and the seventh largest in the country.
You may have heard of the business, or at least noted its affiliated "bill me later" button, which has steadily popped up on the checkout pages of Internet retailers for the past three years. It's on WalMart.com, Apple.com, AirTran.com and about 700 other dot coms.
"We're giving [shoppers] another way to pay. That's what we do," Marino said in an interview a few weeks ago.
Of the $4 trillion that the Commerce Department says Americans spend on retail shopping each year, just a fraction of it - less than $200 billion - is spent online.
Most of the disparity is because people like brick-and-mortar stores and the touching and trying on they encourage. But many shoppers, especially those with huge credit lines, are still reluctant to send their card numbers out onto the World Wide Web, worried they could be intercepted by cyber thieves, financial research firms say.
That's where Bill Me Later comes in. The company will pay retailers for you, then send you a bill.
It works like this: Shoppers ready to buy at participating Web sites choose the "bill-me-later" option, fill in their birth date and the last four digits of their Social Security numbers. If approved for a credit line - the process takes about three seconds - the customer can complete the transaction.
Bill Me Later then sends new customers an e-mail hyping its retailers and how to make payments. Customers can see their balances online. If they pay in full according to the purchase terms, often monthly, there are no fees. If they carry a balance, interest charges of about 10 percent to 20 percent will apply, much like a credit card. And the credit checks don't count against a person's rating, according to Bill Me Later.
A report this month from CyberSource Corp., a California electronic payment processor, says e-commerce fraud is up 20 percent this year, with about $3.6 billion stolen from consumers. About 1.3 percent of online orders turn out to be fraudulent, the company said.
As consumer concerns about such theft have multiplied, so have payment alternatives.
Companies such as Google and PayPal Inc. will store a shopper's credit-card information so customers do not have to share it with multiple merchants. And Amazon is testing a similar service. They still require a credit card, though, unlike Bill Me Later.
"Bill Me Later was really the first to innovate in that respect, where they actually open up a new line of credit for you," said Adil Moussa, an analyst with Aite Group LLC, a Boston financial services research and advisory firm.
Some merchants say the Bill Me Later service brings them customers who would not otherwise shop online, and it costs about 40 percent less than credit-card transactions. They also like that Bill Me Later advertises its retailers to consumers.
"Bill Me Later has definitely brought us additional business," said AirTran Airways spokesman David Hirschman. His company began offering Bill Me Later services late last year. "It's part of our ongoing efforts to give our customers as many payment options as possible."
About 3 million people have signed up as Bill Me Later users. Most of them are women between the ages of 35 and 55, college-educated and married with kids, according to the company. It is a demographic retailers covet, but it is still a relatively small base, compared with the customer delivery potential of a new offering by PayPal.
In August, the payment services company launched PayPal Pay Later, a service that gives consumers a credit line without a credit card. The company said the offering should boost its sales along with retailers, noting results of a study it commissioned that suggest 56 percent of PayPal users are more likely to spend if they can defer payment.
Analysts said there is plenty of room in the alternative-payment market for multiple players, but they acknowledged that PayPal has the potential to bring big business to retailers. Its standard service, an online payment system owned by eBay, has 153 million users.
Bill Me Later executives said they are not worried.