Axerve reports that PayPal is the method with the largest volumes, reaching 59% of the overall alternative payments. This is followed by MyBank, with 25%. Sofort by Klarna, accounts for 3% of the total collections with methods other than credit cards.
The Axerve white paper is entitled “Alternative payment solutions: how they are changing the payment scene”. Specifically, it explores the ways in which alternative payments are revolutionising traditional banking.
It claims that in many cases, alternative payments provide an easier and more efficient way to make payments.
What are alternative payments?
Alternative payments refer to everything that falls outside of the traditional payment methods that have been used both for online and in-store purchases. This includes payment solutions alternative to the main credit/debit card networks, cash, and cheques. Alternative payments are on the rise both in the Ecommerce and physical stores landscape and projected to reach more than $15bn by 2027, with a CAGR of 16.3% over the period 2017- 2027 according to the paper.
Axerve claims that 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.
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 a direct integration, i.e. without going through the Axerve-managed flows), it is Klarna, in its instalment 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.
The Axerve whitepaper is available via this link.
Alessandro Bocca, CEO at Axerve, stated: “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 a 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, added: “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 payments 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.