2019 | Key Insights Into Alternative Payment Methods - By PaymentGenes
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The document outlines various alternative payment methods (APMs) that provide flexible options beyond traditional payment systems like cards. It details types of APMs, their advantages for businesses, and the increasing global relevance of these payment options. The future outlook suggests a significant shift towards APMs, with predictions of over half of all online transactions being processed through APMs by the end of 2019.
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2019 | Key Insights Into Alternative Payment Methods - By PaymentGenes
- 1. Alternative Payment Methods By PaymentGenes
- 2. Agenda What are Alternative Payment Methods? Types of Alternative Payment Methods Advantages of Alternative Payment Methods Future Outlook
- 3. What are Alternative Payment Methods? o Alternative ways of paying that don’t rely on traditional payments(e.g. cards/immediate exchange of funds). o Globally there are more than 200 Alternative Payment Methods o Instead of being limited to one payment model, businesses can integrate different, more flexible options in their eCommerce business. o Customers buy from everywhere in the world, but payment methods differ by geography. What does that mean for the business? ➢ Essential to understanding how customers want to pay.
- 4. Payment Value Chain Position of APMs within the PVC Merchant PSP Acquirer Schemes Issuer/ Banks APM Processing
- 5. Different types of APM’s
- 6. 1 2 3 4 5 6 Bank Transfer eWalletDirect Debits Mobile Local Card Schemes Prepaid/Instant Financing Types of Alternative Payment Methods
- 7. 1. Bank Transfer o Consumers can use their regular bank account details to make an immediate payment. o Guaranteed payment for merchant. o Consumer gets redirected to separate login page. ➢ Predicted to become the second most popular payment method globally by 2021*
- 8. 2. Direct Debits o Primarily low-value and/or predictable recurring transactions. o Can be scheduled, even if consumer does not have the money available = risk of chargebacks is much higher than with other payment methods. o Despite risk of chargeback, still popular for regular payments.
- 9. 3. eWallet or Digital Wallet o Secure place that contains one or more currency purses. o Users pay using their mobile device. o Easy to use; typically using an app that allows shoppers to link a credit card to the account (for example). ➢ Expected to make up 46% of all global payments by 2021 = fastest growing payment method across the globe
- 10. 4. Mobile (1) Direct Carrier Billing o Especially important in developing markets. o Shoppers pay by providing their phone number o E.g. Boku (2) Mobile Wallets o See eWallets o Growing choice of mobile wallet payment options (e.g. ApplePay)
- 11. 5. Local Card Schemes o Function like traditional cards, yet function only in specific markets. o If cards have large local market shares, they are an opportunity for business to grow cross- border.
- 12. 6. Prepaid/Post-pay (1) Pre-pay o A card or voucher has to be bought or topped up to make a transaction. o Usually authorised immediately. (2) Post-pay/Instant financing o Customer can buy a product online and can pay for it later. o Flexibility in payment terms: ‘try before you buy’.
- 13. Why businesses provide APMs
- 14. Advantages of Alternative Payment Methods o ‘Trash the cash’. o Additional recurring revenue: o What if card gets declined? With offering APMs you offer more options that a payment gets accepted. o Boost in Sales: o E.g. Paypal = Boost of almost 50% in conversion when integrated. o Globally relevant: o If your business is not limited by geography, why limit your payment methods? PayPal or Amazon Pay are globally known.
- 15. Advantages of Alternative Payment Methods o Trust factor: o Many customers are not comfortable sharing their data on unknown sites. o If there is the option to use a familiar brand, they are more likely to do so. o Strict rules: o Some gateway rules in certain countries don’t allow cross-border payments . o APMs that function cross-border could solve that issue.
- 16. Why businesses offer APMs
- 17. Future Outlook o Product ! Concept ! Mainstream ! Norm o By end of 2019: 55% of all online transactions will be done using APMs.* o UnionPay & Huawei: teaming up to bring Huawei Pay to Russia = APMs are spreading to different parts of the world. o India in the spotlight for PayPal & Google Pay Reduce population reliance on cash. * ACI Worldwide | What Is the Link between Payment Methods and Conversion Rates?
- 18. Future Outlook o WeChat: rolled out digital payment platform in Malaysia. ! Firm is building local payment service instead of expanding overseas for Chinese users to pay with when traveling. o Points Pay: e-payment solution that enables members to participate in loyalty programs to redeem points & miles in stores. o Cash Persistence: In countries such as South Africa & Saudi Arabia cash still accounted for 60% & 37% of their GDP.