Discover how alternative payment options are changing payments, their market share, and their impact on traditional banking. Merchants must keep up with e-commerce growth and alternative payments are expected to reach $15 billion by 2027.
In a recent whitepaper, open finance company Fabrick and its subsidiary Axerve examine how alternative payments are upending traditional banking and offer accessible and seamless payment alternatives for physical and online sales.
The whitepaper, “Alternative payment solutions: how they are changing the payment scene,” examines the development of alternative payment options and the market share of various payment types, including cryptocurrencies, digital wallets, account-to-account transfers, and Buy Now Pay Later (BNPL) services.
Alternative payments are anything other than the typical payment methods used for in-store and online purchases. It especially refers to payment methods that are an alternative to checks, cash, and the major credit and debit card networks.
Alternative payments are on the rise and are anticipated to surpass $15 billion by 2027, growing at a CAGR of 16.3% from 2017 to 2027. The need for merchants to keep up with the growth of e-commerce on a global scale, the inability of traditional payment methods to satisfy customer needs, and the difficulty of the checkout process in light of today’s quick and frictionless technological experiences have all contributed to this growth.
Digital wallets continue to be the most popular payment option globally, although BNPL platforms and A2A tools like iDEAL and MyBank are gaining popularity, according to Axerve’s consumer analysis.
With a market share of 59% of all alternative payments, PayPal dominates the industry. MyBank comes in second with 25% of the total collections made using methods other than credit cards, while Sofort by Klarna accounts for 3%.
“Demand for more cutting-edge, digital payment solutions”
Alessandro Bocca, CEO of Axerve, reviewed the report’s conclusions and stated that the global alternative payment market is gradually increasing its penetration in various geographical regions and product sectors, displacing traditional payment methods.
Bocca predicts that alternative payment solutions will continue to evolve, which will require merchants to adopt collection platforms that can handle a wide range of payment options available on the market. This includes not only the payment systems themselves but also the supporting “supply chain” of services, such as acquirers, integrated alternative payments, and fraud protection. In this environment, merchants need to be ready to take quick action in order to increase sales and lower costs.
Paolo Zaccardi, the CEO and co-founder of Fabrick, commented on the release of the whitepaper stating that the increasing consumer demand for alternative payment solutions indicates a growing interest in innovative, digital payment options. With the rise in digital payments and the numerous payment methods available, it is essential for businesses to have straightforward payment interfaces.
Fabrick, through its subsidiary Axerve, offers the latest and most secure alternative payment solutions in a constantly evolving digital landscape. Zaccardi takes pride in leading the open finance revolution and providing businesses with the fastest and most secure payment options. The whitepaper highlights how alternative payments are transforming the customer journey in various ways.