back Back

Here’s how alternative payment methods are fueling BNPL growth 

By Puja Sharma

April 21, 2023

  • A2A Payments
  • Alternative Payment Method
  • alternative payments
Share

Alternative payment
  •  Fabrick, through its subsidiary Axerve, which specialises in providing accessible and frictionless payment solutions for eCommerce and physical sales, released a new whitepaper that explores the market penetration of alternative payment methods across a variety of geographies and industries.
  • In exclusive company data, Axerve found that PayPal is the method with the largest volumes, reaching 59% of the overall alternative payments. This is followed by MyBank, with 25%, and Sofort by Klarna, which accounts for 3% of the total collections with methods other than credit cards.
  • In the UK digital payments sector the total transaction value is forecast to reach almost $440 billion in 2023.

Fabrick, an Open Finance platform, and its subsidiary Axerve, Payment Partner to Grow, a provider of accessible and frictionless payment solutions for eCommerce and physical sales, announced the release of a new whitepaper, “Alternative payment solutions: how they are changing the payment scene”. This whitepaper explores how alternative payments are revolutionising traditional banking.

In many cases, alternative payments provide an easier and more efficient way to make payments.

Alternative payment solutions respond to the specific needs of today’s market, both in terms of user experience and the checkout process. By providing local demographics with the opportunity to pay with their preferred and most commonly used methods of payment, merchants can take advantage of transparent fee conditions, often without hidden costs, as is the case with digital wallets. Moreover, alternative payments offer many benefits for consumers, such as convenience, ease of use, and better accessibility compared to traditional methods.

The world of alternative payments refers to everything that falls outside of the traditional payment methods that have been used both for online and in-store purchases, specifically all the payment solutions alternative to the main credit/debit card networks, cash, and checks.

Alternative payments are on the rise both in the eCommerce and physical stores landscape and are projected to reach more than $15.000 billion by 2027, with a CAGR of 16.3% over the period 2017- 2027. This growth has been triggered by the increasing needs of merchants to follow the expansion of eCommerce across the world, the inability of traditional payments to meet the buyer’s needs, and the complexity around the checkout process vis-à-vis the fast and frictionless types of technological experience that were arising in the digital payments’ world.

According to Axerve’s customer analysis, which was performed in 2023, digital wallets remain the most widely used payment methods across the world, however, Buy Now Pay Later platforms and A2A (Account-to-Account) tools, such as iDEAL and MyBank, are gaining traction.

Even though two-thirds of the UK population believe cashless methods are riskier and more prone to fraud than cash, the current statistics and tendencies suggest otherwise. In 2021, one-third of the population barely used cash, and the total transaction value in the UK digital payments sector is forecast to reach almost $440 billion in 2023.

Furthermore, the UK is one of the most cashless countries in the world, with 95% of people having internet access, 97% having a bank account, and 65% being credit card owners. Moreover, card payments make up more than half of all payments (51%) and alternative payment methods make up 41%. Bank transfers make up 7%, while cash is only responsible for 1%. These figures make it clear that the UK is swiftly progressing towards a cashless economy.

By comparing the transaction value of the individual methods to the total amount collected by eCommerce merchants that have integrated those specific alternatives (it must be considered that merchants may have implemented one or more alternative payments with direct integration, i.e. without going through the Axerve-managed flows), it is Klarna, in its installment payment formula, that registers the highest penetration in comparison to total collections (22%), followed by PayPal, which is confirmed as the most widely used digital wallet across all sectors. Among the A2A forms of payment, it is MyBank and iDEAL that account for the most, 10% and 7% respectively, while Satispay and Sofort by Klarna record only 2% and 1% of the total volumes collected by the Ecommerce shops that have integrated them.

Paolo Zaccardi, Co-Founder and CEO of Fabrick, said, “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 committed to 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, “Alternative payment solutions: how they are changing the payment scene”, highlights the various ways in which alternative payments are revolutionising the customer journey.”

Previous Article

April 21, 2023

Miura announces launch of Miura Android Smart POS payment device

Read More
Next Article

April 21, 2023

Unlimint forays into Nigeria as a payment service provider

Read More






IBSi FinTech Journal

  • Most trusted FinTech journal since 1991
  • Digital monthly issue
  • 60+ pages of research, analysis, interviews, opinions, and rankings
  • Global coverage
Subscribe Now

Other Related News

Today

9fin raises $50m to build debt capital markets technology

Read More

Today

KPay raises $55m in Series A round to fuel expansion plans in Asia

Read More

December 02, 2024

Episode Six & Secupay partner to ease govt aid disbursal in Germany

Read More

Related Reports

Sales League Table Report 2024
Know More
Global Digital Banking Vendor & Landscape Report Q3 2024
Know More
NextGen WealthTech: The Trends To Shape The Future Q4 2023
Know More
IBSi Spectrum Report: Supply Chain Finance Platforms Q4 2023
Know More
Treasury & Capital Markets Systems Report Q1 2024
Know More