Bill Me Later likes to keep it simple, for both consumers and merchants. The company can approve U.S. residents for deferred payment in a matter of seconds, with just the address, the last four digits of a customer's Social Security number and a birthdate.

For merchants, Bill Me Later provides a guaranteed payment: Bill Me Later takes the risk of consumer defaults, although John Reistrup, vice president of travel marketing, said that rarely happens. "We've been pretty conservative," he said. "Our customers are more affluent, with higher household incomes than average. They are professionals on the go."

The exposure for customers is lower as well because "you never leave the merchant's site or use an account number," Reistrup said. "It's optimal for all parties involved." Bill Me Later has a wide variety of merchants, from watchmakers to Wal-Mart.

Its foray into the travel industry began with airlines--Continental, AirTran, JetBlue and US Airways offer the option--and it has expanded to other areas of the industry through agreements with Rail Europe, Hotels.com, Hotwire and Solar Tours. The company has further extended its reach through an agreement signed last year that enables airlines to use their existing UATP Network for processing Bill Me Later transactions.

Bill Me Later also is working on a new product that will enable travel agents to act as merchants through a single integration with the Airlines Reporting Corp. The customer authorization would be achieved through the GDS, Reistrup said. Bill Me Later is as much a marketing tool as a payment option, Reistrup noted. "The 'fly now, pay later' promotional message appeals to customers who are browsing," he said. "They see that they have 90 days to pay, so customers who might be price sensitive are more willing to buy. The speculative decision becomes a purchase."

Generally, it takes about four weeks to get a merchant up and running, Reistrup said. "There are a couple of different options, and some customization might be required depending on the merchant's objectives."

Some merchants want Bill Me Later to work with an existing payment network, while others want a stand-alone system, he said. Either way, "the customer's experience is consistent across all 1,500 partners."

Despite the current economic downturn, "we aren't seeing changes" in consumer behavior, he said. "It's pretty consistent. We've been doing some pretty intense work to see what is on the customer's mind, and a lot of their issues are with credit cards and banks."

For sole proprietors and independent contractors, who generally submit business travel expenses to their clients after they complete a trip, Bill Me Later allows them to be reimbursed before having to pay for an airline ticket.

As with other payment options, the merchant pays a fee to Bill Me Later, but Reistrup said that in general, that cost is significantly lower than credit card fees. "There is up to a 40% reduction in that expense," he said.

But merchants are not just saving on the fees. "There is a higher spend per transaction," Reistrup said. "It's double what you see with a credit card. Consumers are upgrading when they use Bill Me Later." That fact has not gone unnoticed by travel suppliers. "Our partners are very pleased," Reistrup added.