Ikobo is the latest “money transfer” company to hit the market in direct competition with Paypal.
As many are aware, I’m not a big fan of these money transfer services as whilst they allow you to accept credit cards simply and cheaply they have a number of limitations, give an unprofessional appearance and there have been numerous cases of legitimate account holders having their funds frozen while they are investigated.
Even iKobo may take similar action – this direct from their terms and conditions:
“You authorize iKobo, directly or through third parties, to make any inquiries we consider necessary to validate your registration. This may include ordering a credit report and performing other credit checks or verifying the information you provide against third party databases. However, because user verification on the Internet is difficult, iKobo cannot and does not guarantee any user’s identity. At iKobo, we take protecting our network of customers very seriously. Sometimes our stringent security measures may affect accounts that are in good standing. We cannot disclose the specific criteria used to determine which customers are prompted to complete this process; doing so would undermine the effectiveness of our security measures.
Whilst iKobo claims to be the fastest growing money transfer company on the Internet, Paypal is still the industry standard with over 63 million users at the time of writing.
In the grand scheme of things, Paypal does have quite a lot of things in it’s favour – namely that it’s the original and has been around a long time.
This means that their systems are tried and tested and there are lots of third-party pieces of software available that you can use to interface with Paypal and add extra functionality to their systems.
It’s also owned by eBay so you know they’re backed by a large, reliable company.
So how does iKobo think it’s going to flourish in this market – apart from having the novelty of being the new kid on the block?
Well there are a number of differences.
Firstly, to encourage more merchants to sign up iKobo are offering 5% cashback on all sales. Yes you make an extra 5% on all funds currently sent to your account. Not huge, but it’s certainly not to be sneered at.
Interestingly you can (though I wouldn’t recommend it) get your customers to pay the transaction fees ontop of the asking price of the product or service they’re buying. However many people will not be happy with this arrangement and I suggest you shoulder the fees in terms of customer services.
However the key difference, as far as I can see, is the method in which you, as a merchant, actually get your hands on your earnings.
Paypal will deposit your earnings into a bank account for you, but iKobo will only do this for US based businesses. Everyone else (and even US businesses they they want one) uses an “iKard”.
The iKard is a Visa card offered specially to anyone receiving money from iKobo.
Because a card is needed some might argue it’s less practucal than Paypal, where you can send to any email address.
You of course also have to wait for your iKard to arrive the first time though once it’s actually arrived you can use the card over and over as many times as you like.
As an example I looked at receiving just such a card here in the UK and depending on what delivery service I chose it would cost between $4.95 and $9.95 and take between 3 and 15 days to arrive.
However once this initial wait (and expense) is over, funds deposited into your iKobo account are available for you to spend with your iKard within minutes.
And this element I like.
Because if you have an unexpected bill, or want to take advantage of a time-limited opportunity or spot a great deal somewhere you can, for example, create a special offer at your website to boost sales, knowing that every dollar profit you make can be accessed minutes after your customer pays.
It’s the clostest thing I know to instant cash, rather than having to wait weeks for checks to arrive and clear.
Now the downside of the iKard. There is a 99c a month fee to kee the card active and withdrawing cash at any ATM will cost you $1.99 though just paying with your card at a POS terminal (such as on the Internet, at the supermarket etc.) is free.
Lastly I have been quite impressed with the iKobo website which is attractive, easy to navigate and has a very user-friendly “help” section to answer most questions you may have.
I personally have registered for an account primarily because of the “cash on demand” element that I think could be really useful.
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