If you're setting up an E-commerce Web site, sooner or later you'll have to solve the problem of granting credit. Most of the industry's attention has been directed to various methods for accepting credit cards online; solutions for automating the granting of direct credit to businesses or for large consumer purchases have been slower in coming.
"The approval of these credit relationships is necessary if you want to close orders," says Dan Sholler, analyst at IT consultancy Meta Group Inc. However, taking hours or days to approve credit using faxes and phone calls is not always acceptable in E-commerce. "You're going to lose orders if you can't match people's speed expectations," says Sholler.
The equipment finance division of CIT Group is using an automated credit scoring system from eCredit.com Inc.. "We've been using the CCX scoring system [from Acxiom Corp.] for years," says CIT vice president Hal Hitch.
An E-commerce customer types data into an online form. The eCredit.com software evaluates the data, instantly obtains online credit reports from Dun & Bradstreet Corp. or Experian Inc., and does the CCX scoring, customized for CIT. "The software comes up with a raw score, which specifies automatic approval, automatic decline, or human review," says Hitch.
The software took CIT close to a year to implement and cost about $600,000, including consulting fees. Generally, eCredit.com charges from $8 to $25 per transaction for its software, depending on such factors as volume, the length of the agreement, and average dollar size of transactions. In addition, credit agencies typically charge 85 cents to $2 for online reports, although full-company D&B reports can cost up to $25.