Discounter suspends fee to lure more on-line buyers

By CHRIS BARTON

Internet shopping club Go-Shopping has dropped its $14.95 a month membership fee for the next six months.

The club launched last year by Kerry Gordon, the former Mr Bartercard of New Zealand, now has about 4500 members. It offers discounts on a range of goods and services including movie tickets, electrical appliances and food.

When it launched in November the membership fee was $24.95. In March that was reduced to $14.95 - ostensibly to build a buying group of 30,000 users which Mr Gordon said would provide enough buying clout to get even better bargains for its members. Now membership is free.

Mr Gordon says the change of heart is in part dictated by the resistance of internet users who "don't want to pay to shop" - despite the savings the site offers.

But he also wants more net shoppers to experience "the benefits Net Fusion offers."

Net Fusion is the site's payment gateway and provides a highly secure means for shoppers to buy across multiple merchants and get a single invoice line on their credit card bill.

Credit card details are loaded once - over a secure internet connection or by fax or phone. Members can then buy from any of the site's 100 merchants using just their Net Fusion membership number and a password.

That combination is transferred to a secure bank server which is then linked to a member's nominated credit card account for settlement to the merchant's bank account off-line. The advantage is the merchant never sees the member's credit card details or his or her membership number and password.

Mr Gordon says the free membership period should help meet his target of 30,000 members by the end of the year as well as increasing revenue from 3.75 per cent merchant transaction fees on sales.

Go-shopping is breaking even on sales of about $60,000 a month. Merchant costs have also been reduced to $49 a month for a three-year term, rather than the one-off set up fee of $895 with monthly administration cost of $15.

But perhaps the biggest opportunity for Net Fusion lies in its ability to expand both in terms of payment options and buying devices.

Because it effectively loads a virtual account, Net Fusion enables users to make funds transfers from not just credit cards but also nominated bank accounts.

The back-end software based on Unicard from local developers GFG is also poised to offer payment options using mobile phones and short message services.

To advance on both fronts, Mr Gordon has brought on board former Asia Online country manager Hugh McKellar and mobile commerce consultant Gail La Grouw.

"We want to own the 'card not present' environment in NZ," said Mr Gordon.

"We want do this across multiple platforms."

Links


Go Shopping