Open finance firm Fabrick, and its subsidiary Axerve, a provider of accessible and frictionless payment solutions for e-commerce and physical sales, have released a new whitepaper exploring how alternative payments are revolutionising traditional banking.
The whitepaper, ‘Alternative payment solutions: how they are changing the payment scene‘, dives into the evolution of alternative payment methods and analyses the market penetration of different types of methods, such as digital wallets, account-to-account transfers, Buy Now Pay Later (BNPL) offerings, and cryptocurrencies.
The world of alternative payments refers to everything that falls outside of the traditional payment methods used for online and in-store purchases. It specifically refers to payment solutions alternatives to the main credit and debit card networks, cash, and checks.
Alternative payments are on the rise and are projected to reach more than $15billion by 2027, with a CAGR of 16.3 per cent over the period 2017- 2027. The increasing need for merchants to follow the expansion of e-commerce across the world, the inability of traditional payments to meet the buyer’s needs, and the complexity around the checkout process in regard to the fast and frictionless types of technological experience have triggered this growth.
According to Axerve’s customer analysis, digital wallets remain the most widely used payment methods across the world, however, BNPL platforms and A2A tools, such as iDEAL and MyBank, are gaining traction.
PayPal holds the highest market share, accounting for 59 per cent of the overall alternative payments. MyBank follows with 25 per cent, and Sofort by Klarna accounts for three per cent of the total collections with methods other than credit cards.
‘Appetite for more innovative, digital payment solutions’
Alessandro Bocca, CEO at Axerve, discussed the findings of the report: “The market penetration of alternative payments continues to grow steadily in various geographies and across several product sectors around the world, displacing traditional payment methods.
“Going forward, we anticipate further development of alternative payment solutions, which will require merchants to adopt collection platforms capable of managing the wide array of solutions available. This includes not only the payment solutions themselves but also their underlying ‘supply chain’ of services, such as acquirers, fraud prevention, and integrated alternative payments. To succeed in this environment, merchants must be ready to act quickly and optimise their sales and minimise costs.”
Paolo Zaccardi, co-founder and CEO of Fabrick, also commented on the whitepaper launch: “Consumer demand for alternative payment solutions shows a continued appetite for more innovative, digital payment solutions. Digital payments continue to grow in popularity and the sheer variety of payment options out there means that easy payment integrations have become extremely important for business.
“At Fabrick, via the subsidiary, Axerve, we are providing our customers with the most innovative and secure alternative payment solutions in an ever-evolving digital world. We are proud to be at the forefront of the open finance revolution and to be able to offer merchants the most efficient and secure payment solutions available. Our whitepaper highlights the various ways in which alternative payments are revolutionising the customer journey.”