Kathryn Park doesn't like giving out her credit card information. Why should she? A few years ago, she said a sales clerk stole her card number and used it to bankroll his 1-800-PSYCHICS hot line calls.

So during a routine pet food order on www.Petco.com, the 30-year-old D.C. resident noticed an option to pay without entering her credit card, and she jumped on it. She now spends about $500 a month shopping online using Bill Me Later, a payment system that allows people to buy items online but pay offline after receiving a statement in the mail.

"There is so much information about ID theft out there, and it's hard to figure out what is truly a threat and what isn't," Park said. "I like the idea of not having my credit card always out there."

Credit cards and debit cards are still king when it comes to online transactions. But as more consumers turn to Internet-based merchants, Timonium, Md.-based Bill Me Later and several other companies are hoping to lure more users with payment systems that don't require them to share their billing information online.

Credit cards account for 60 percent of online sales, while debit cards account for 26 percent. About one-tenth of all e-commerce payments are made using alternatives to credit and debit cards, and of those transactions, only about one-fifth use Bill Me Later, according to Javelin Strategy and Research. In addition to the credit cards, Bill Me Later faces competition from alternative payment companies such as PayPal and the well-heeled Google Checkout.

"Dozens, if not hundreds, of companies have tried to make their way into the alternative payment space and failed," Javelin analyst Bruce Cundiff said.

One way Bill Me Later hopes to compete is by allowing consumers to use Bill Me Later kiosks at brick-and-mortar stores.

It's not clear how Bill Me Later's competitors are responding to the 3-year-old service. PayPal, Google Checkout, Visa and MasterCard would not comment on Bill Me Later.

But eBay-owned PayPal recently began offering deferred billing similar to Bill Me Later. Both PayPal and Google Checkout are backed by tech giants with greater staffing and resources than Bill Me Later's relatively small 201-person operation. Competitors also are adapting their businesses to offer some perks usually associated with traditional credit cards, such as gaining frequent-flier miles through retail purchases.

Like Visa or MasterCard, Bill Me Later makes money by charging merchants a small percentage of each sale.

The company's premise is that customers consider paper billing more secure than submitting their financial information online.

Bill Me Later, which has 700 e-retailer partner sites such as the Apple Store and eToys, runs credit checks based on the user's birthdate and the last four digits of their Social Security number. Bill Me Later pays the e-retailer immediately and sends a paper bill to the customer up to 14 days later. The consumer can then mail in payment or pay using Bill Me Later's Web site.

Bill Me Later's customers tend to spend more money online than customers who use Visa, MasterCard, PayPal and American Express. A Jupiter Research survey found that 54 percent of Bill Me Later users spent more than $250 over three months. By contrast, only 36 percent of MasterCard customers spent that amount over the same time period.

This is probably because customers most concerned about fraud are those with larger credit lines and because Bill Me Later only accepts users with good credit, Forrester Research analyst Sucharita Mulpuru said.

Bill Me Later, which has 3 million customers, tries to encourage more people to shop online by working with e-retailers to offer discounts, interest-free financing offers and other deals.

But consumer advocates warn that delayed-financing offers such as Bill Me Later can be confusing for consumers who don't know their rights when a purchase goes awry.

"This is a situation where the law probably hasn't kept up with technology to clearly spell out what people's dispute rights should be when using new forms of payment," said Susan Grant, National Consumers League vice president for public policy.