Payment Methods Report 2018

Payment Methods Report 2018
Innovations in the Way We Pay

Payment Methods Report 2018
RELEASE | VERSION 1.0 | JULY 2018 | COPYRIGHT © THE PAYPERS BV | ALL RIGHTS RESERVED
Authors
Ana Sabie
Bogdan Moisa
Mees van Stiphout
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Management Summary
Since its first launch in 2016, Payment Methods Report has been the reification of a need we identified in the industry for
a common framework of payments terminology, and for an educational overview of payment instruments and payment
methods categories. The report’s educational purpose allows us to place special emphasis on customer preferences per
region/industry, but also to highlight best practices from both merchants and PSPs in illustrating the right payment mix.
This year’s report aims to present the key trends and developments in global and regional payment methods by highlighting
the innovation, challenges and developments in the use of the most important payment methods across geographies and
verticals. Due to a complex market, brimming with (alternative) payment providers that compete to offer seamless and low-
cost payments options, an instrument depicting the complexity of this space is more than demanding. Our endeavour is
also driven by the fact that we understand that, since consumers are currently able to choose from a constantly growing
number of payment methods at both the checkout and POS, differentiating from competitors is becoming challenging. In
order to provide an accurate overview of the current state of the innovation in the way people pay, we have looked at trends
across geographies but also across verticals, from both an online and offline perspective, bearing in mind as well that the
evolution of cash payments is just as important as the growth of e-payments.
The payments methods that we use for offline and online purchases evolve year by year and are influenced by regulations,
consumer preferences, advances in technology, innovation in customer services, and more. Uncovering the factors that
determine the evolution of a payment method is essential for understanding the current state of the payments landscape
and for being aware of its potential for the future. In 2018, we have witnessed in the global payments landscape important
changes and developments. Europe is under the effect of PSD2 and GDPR and, partially, of SEPA Instant Credit Transfer
(SCT Inst), India prepares for UPI 2.0, China’s Alipay and Tencent expand beyond borders and beyond payments, emergent
economies become more and more attractive. Globally, there is an increased effort towards digitalisation aimed at promoting
financial inclusion and we see governments being more aware of the power they have in promoting cashless societies.
In the first chapter, Payment Methods in Focus – Trends and Developments, we found it impetuous to take a closer look
at the various types of payment instruments and methods, presenting the terminology and some trends and developments
related to each payment method. In this section, we presented the current state and the development of pay later solutions,
we tried to explain why cards remain one of the most popular non-cash-based payments in the world and present how
the usage differs in different areas. We looked at what is estimated for instant payments and what impact it will have on
online banking payments (on the rise in Europe), what is the current state of the use of cash and how it is impacted by
other payment methods, as well as what is direct carrier billing’s importance in emergent markets. Another hot topic we
tackled upon in this section is the use of cryptocurrencies as a payment method and presented the way in which people
can actually purchase goods and services using cryptocurrencies and what industries and regions are currently using or can
benefit from using crypto.
Based on their expertise, payments specialists share with us the results of their investigations regarding certain payments
methods and solutions by highlighting the benefits and challenges on the market. Dean Wallace from ACI Worldwide presents
the benefits of real-time payments for merchants, debating upon one of the hottest topics in the payments ecosystem at the
moment, as both banks and merchants look to match their services to customer demand and expectations. ➔
3 PAYMENT METHODS REPORT 2018 • MANAGEMENT SUMMARY

Management Summary
Pay later solutions and online banking payments are looked at from a consumer and cross-border ecommerce perspective
respectively, with Luke Griffiths from Klarna and Luke Flomo from Trustly providing their expert views regarding these topics.
In the second chapter, Zooming into e-wallets – An East/West perspective, we created an infographic with an overview
of regional and global e-wallets in Europe, North America, India and China, followed by a mapping of e-wallet functionalities.
The section incorporates research done by The Paypers in an infographic of e-wallets mapping the 61 most prominent
e-wallets today on several functionalities. The research summary and results are also enclosed.
Furthermore, the chapter includes insights from prominent payments experts. Mounir Mouawad from Google Pay presents
the benefits of using Google Pay for merchants, while Javier Santamaria from European Payments Council underlines the
way in which instant payments can drive the development of mobile payments. Kunal Patel debates upon the so-called
“war of e-wallets” in India, highlighting the main drivers for the surge within the e-wallet space in a market largely driven
by competition from credit/debit cards. Zennon Kapron from Kapronasia explains what happens when a mobile wallet
becomes more than just a wallet, referring to Alipay, the mega-app used by hundreds of millions of Chinese, an app that has
become more than just a platform for ecommerce payments.
In the third chapter, Innovations in the Way We Pay, we looked at how the rise of ecommerce changed the way consumers
interact with merchants. Nowadays, convenience is the main driver of every development regarding the user experience in
store or online. Customers can shop with ease from anywhere at any hour and on any device. Ecommerce redefined and
enhanced the customer experience and payments providers had to adapt their payment methods to meet new demands for
a seamless experience.
The new challenge is now “invisible payments” in an attempt to make the checkout process as fast and as simple as
possible. Voice is emerging as an important commerce channel and the recent string of investments, that big tech
companies like Google and Amazon have made in enhancing their “smart assistants”, shows that voice commerce has the
potential to redefine commerce. We are not only communicating with devices, but devices can also communicate among
themselves. Connected devices or the Internet of Things is making big strides into online and physical commerce. The
growth of connected devices will pose new challenges to ecommerce marketers, but an integration with IoT devices built
around purchasing and re-purchasing can have important benefits.
We have invited payments and ecommerce specialists to grant their expert knowledge to this chapter presenting expert
views on the evolution of commerce, voice commerce and Internet of Things. Thad Peterson from Aite Group presents the
evolution of commerce and of Amazon in the payments space. Karen Pepper from Amazon Pay explains why voice can be
perceived as the new frontier in commerce, while Mark Bergthaler from Merchant Risk Council points out to the need of
tailoring commerce to the Internet of Things, understanding and strategising around the way the Internet of Things can be
used to bring frictionless experiences in store. ➔

Management Summary
We then found it necessary to investigate some of the most important markets worldwide and to provide an overview and
data related to the way people pay. In Payment Methods Basics and Overview of How People Pay in Different Markets
infographic, we provided an overview per country with details related to some ecommerce data, the preferred payments
methods and some of the best-known alternative payments methods in the selected countries.
In the last chapter, How to Create the Right Payment Mix - Insights into Verticals and Geographies, we tried to
understand which verticals and regions are more open to innovation. In this section, several regions and verticals are
examined by experts in their field, who offer an in-depth discussion of specific situations to give a clear image of how
people pay. Ralf Ohlhausen from PPRO sheds light on how to build the ideal payment mix for global businesses by laying
out a plan for any merchant to gain success on a global scale. Abhishek Banerjee and Rossini Zumwalt from Emergent
Payments point out the opportunities in the emerging markets (Africa, LATAM, India, and Southeast Asia). Kendrick Sands
from Euromonitor International explains how a shift in retail drives card adoption in China. With greater competition in the
digital payment arena, Sands explains how payments are increasingly seen as an additional channel where merchants are
able to be more connected to their customers and offer a range of products and services in China. Focusing on the US,
Sally Baptiste from Payment Operations Group explains how Americans are changing their payment behaviour and, more
importantly, how they are not. She discusses the success and failure of certain innovations by giving insights into how the
US is dealing with the changes in the payment space.
Samuel Barret from Trustly’s gaming division elucidates the challenges and opportunities in online gaming, exemplifying
ways to deal with some of the most demanding payments requests from gamers. Additionally, Jens Bader, the co-founder
of MuchBetter, underlines the most important payments and fraud challenges for gaming operators and the way in which
complying with regulations should be approached in this industry. Jens explains how to support a good mobile experience
in gaming and how to combat fraud in order to stand out from the competition. Jeroen Dekker from AcceptEasy explains
what does an ideal solution for relationship payments in Europe looks like, by presenting what it means to minimise the
payments hassle for B2C customers.
When it comes to the travel industry, Jean-Christophe Lacour from Amadeus’s payments business highlights the payments
preferences and developments that shape this industry. He also explains how the company helps in tackling the payment
needs of travellers globally, what payment methods for the travel industry may come up as alternatives for credit cards and
how the western markets address the payments needs of Asian tourists who are highly mobile-wallet users.
The Payment Methods Report 2018 is a must-read key summary of the most important basics in the payments industry,
trends, developments, expectations for the future. Its main goal is to help any payment service provider, merchant, or
industry-related readership to take informed decisions in their future endeavours in a complex ecosystem that is constantly
evolving.

Table of contents
3 Management Summary
8 (Alternative) Payment Methods in Focus – Trends and Developments

9 (Alternative) Payment Methods - Trends and Developments
12 (Alternative) Payment Methods in Focus
12 Credit and debit cards
13 Prepaid
13 E-wallets/Mobile Payments
14 Online banking ePayments
15 Direct debit
16 Invoice and Pay Later Solutions
17 Cash
18 Direct carrier billing
19 Cryptocurrencies
24 What Are the True Benefits of Real-Time Payments for Merchants? | Dean Wallace Practice Lead Real-Time
and Digital Payments, ACI Worldwide
26 Capitalising on Cross-border Ecommerce with Online Bank Payments | Luke Flomo, Head of e-Commerce,
Trustly
29 The Moment Is Now for Pay Later | Luke Griffiths, General Manager, Klarna
33 Zooming into e-wallets – An East/West perspective

34 E-wallets in Focus
38 Overview of Regional and Global E-Wallets in Europe, North America, India and China
39 Mapping of E-Wallet Functionalities
44 How the SEPA Instant Credit Transfer Scheme Unlocks the Potential of Mobile Payments | Interview with
Javier Santamaria, Chair of the European Payments Council
46 The Benefits of Google Pay for Merchants | Interview with Mounir Mouawad, Head of EMEA Product
Operations at Google Pay
48 The War of the Wallets in India | Kunal Patel, Council Member, Gerson Lehrman Group
50 When a Mobile Wallet Is More than Just a Wallet | Zennon Kapron, Director, Kapronasia
53 Innovations in the Way We Pay

54 Introduction
55 “Alexa, buy me stuff.” – Amazon and the payments space | Thad Peterson, Senior Analyst, Aite Group
57 Voice Is the New Frontier in Commerce | Karen Pepper, Head of the UK and Ireland, Amazon Pay
59 Innovation in the Way We Pay - IoT and Payments | Markus Bergthaler, Director of Programs and Marketing,
Merchant Risk Council
6 PAYMENT METHODS REPORT 2018 • TABLE OF CONTENTS

Table of contents
62 Payment Methods Basics and Overview of How People Pay in Different

Markets - Essential Trends to Watch
63 Payment Methods Explained
73 Country Infographics
74 Brazil
75 UK
76 Netherlands
77 France
78 Germany
79 Poland
80 Canada
81 Russia
82 Turkey
83 UAE
84 China
85 Japan
86 India
87 South Africa
88 US
89 Mexico
91 How to create the right payment mix – Insights into verticals and geographies
92 How People Pay in Different Geographies and Verticals
93 How People Pay in Different Geographies
94 Going Global: Ten Steps to Success for Merchants | Ralf Ohlhausen, Business Development Director,

PPRO
96 Emerging Market Ecommerce Trends and What to Watch In 2018 | Rossini Zumwalt, Chief Payments
Officer & Abhishek Banerjee, Chief Technology Officer, Emergent Payments
98 How the Shift in Retail Drives Card Adoption in China | Kendrick Sands, Head of Consumer Finance

Research, Euromonitor International
100 Purchasing Methods in the United States – Innovatively Static | Sally Baptiste, Consultant, Payments
Operations Group
102 How People Pay in Different Verticals
103 A Faster Way to Play: No-Registration Gaming Takes Hold | Samuel Barrett, Director of Gaming, Trustly

105 The Payments Challenges for Gaming | Interview with Jens Bader, MuchBetter co-founder

108 Paying Attention: Relationship Advice for European B2C Companies | Jeroen Dekker, Head of Product &
Marketing, AcceptEasy
110 The Payments Preferences and Developments That Shape the Travel Industry | Interview with Jean-

Christophe Lacour, Head of Product and Offer at Amadeus
113 Glossary
7 PAYMENT METHODS REPORT 2018 • TABLE OF CONTENTS

(Alternative) Payment Methods
in Focus
Trends and Developments

(Alternative) Payment Methods - Trends and Developments
Introduction
The global increase of non-cash payments creates a dynamic and intricate landscape that, although harder to navigate,
will bring plenty of rewards to those who understand the trends and developments that drive future changes.
Our third edition of the Payments Methods Report looks at innovation in the way people pay and captures the essential
developments that currently dominate and will transform the payments ecosystem. We look at trends across geographies
but also across verticals, not discriminating between online and offline channels. For us, following the evolution of cash
payments is just as important as the growth of e-payments.
The payments landscape in 2018 is on the cusp of big changes. In Europe, we have PSD2, in India, UPI 2.0 is in the works,
China’s big fintech companies, Tencent and Ant Financial are expanding beyond the countries’ borders and beyond
payments, emergent economies become more and more relevant. All of these factors set the stage for big changes in the
payments landscape in the coming years.
Globally, we see increased efforts towards digitalisation aimed at promoting financial inclusion. In recent years,
governments have become one of the main promoters of cashless payments, the most notable example being India.
However, their example is quickly followed by other nations, such as Indonesia’s National Strategy for Financial Inclusion.
Governments in both developed and emergent markets may seek to discourage the use of cash to limit financial evasion
and money laundering. Digital payments, besides being easier to track and follow, generate more tax revenues and
contribute more to the growing economy.
Indeed, it seems that anywhere the Internet goes, financial services follow – and the link between online and financial
services has never been stronger.
Looking at Europe and North America, two regions with a highly developed financial sector, we see credit cards are
still the dominating non-cash payment method. Supported by banks, PSPs, and the schemes, card payments have
maintained their dominant position in the online and offline channels. Alongside cards payments, Europe boasts a large
diversity of payment methods. Online banking e-payments (OBeP) as well as e-wallets, are two of the most important
growing payment methods across the continent, the former getting the biggest traction thanks to the combination of
PSD2 and SEPA Instant Credit Transfers.
According to the WorldPay’s Global Payments Report 2017, bank transfers are set to become the second most popular
payment method globally by 2021. Bank transfers are an attractive option for online merchants and consumers because
of their low acceptance costs and the convenience they provide for online shopping. ➔
9 PAYMENT METHODS REPORT 2018 • (Alternative) Payment Methods in Focus

Europe
For Europe and beyond, The Revised Payments Directive (PSD2) is arguably the most important piece of legislation
regarding the payments landscape. PSD2 came into force on 13 January 2016 and had to be implemented into national
legislation by 13 January 2018. Its impact on the payments landscape is still to be seen, and opinions are varied but
optimistic. The revised payments service directive may allow new payments players to enter the market and be the
consumer-facing end of the payments landscape, while banks, for example, would work as the infrastructure that links
different payments services. It is uncertain whether payment providers (TPPs) will be able to tackle the dominance of
the card schemes and existing online banking e-payments offerings in Europe. The successes such as those in the
Netherlands and in the Nordics could be difficult to replicate in more fragmented markets, but PSD2 may enable third
parties to build safe payment methods with great user experience upon the existing banking infrastructure.
However, the issue of authentication is still a hot topic and it remains to be seen how frictionless it will be. At the
moment, it is still unclear what functionalities banks will offer and whether APIs will provide payments guarantee. To
determine how APIs should look like for use in PSD2, the European Commission (EC), with the support of the Euro Retail
Payments Board (ERPB) of the European Central Bank (ECB), has created the API Evaluation Group (API EG). The goal
of this initiative is to formulate a set of recommendations describing how ‘good APIs’ look like in the eyes of the market
participants and are therefore likely to be ‘widely used’ by Third Party Providers (TPPs), which is one of the prerequisites
for banks getting exempted from providing a fallback mechanism to their customer (online banking) interface.
Equally relevant was the launch of the SEPA Instant Credit Transfer (SCT Inst). Launched on 21 November 2017, the
SEPA Instant Credit Transfer would allow individuals and businesses to transfer funds up to EUR 15,000 in less than ten
seconds anywhere in the SEPA region. The scheme has been successfully launched in Austria, Estonia, Germany, Italy,
Latvia, Estonia, the Netherlands, and Spain, and in 2018, PSPs from Finland will also be ready for instant payments,
along with PSPs from Belgium, Malta, Portugal, and Sweden.
SEPA Instant Credit Transfers will have a significant impact on the European payments landscape, especially when it
comes to reducing cash and cheque usage and for creating an integrated European single market, an objective also
shared by PSD2.
India
In India, Unified Payments Interface 2.0 is being one of the most important payments projects in the works at the
moment. The UPI is a real-time payment system developed by National Payments Corporation of India. It facilitates bank
transactions between two bank accounts on a mobile platform and has had one of the biggest impact on the growth of
mobile payments in the country. The system allowed consumers to make P2P transactions and payments using their
smartphones, without having to enter credit card details.
In May 2018, 101 banks are connected to the UPI and over 190 million transactions have been processed.
The National Payments Corporation of India has announced new upgrades to UPI, which will allow recurring billing for
bank transfers, using e-mandate. ➔

However, it is Paytm (part of One97 and backed by investments from Ant Financial), who dominates the mobile
wallets market. The payment method is widely accepted. The fintech company also operates an ecommerce marketplace
and has branched into various financial services, such as lending and savings accounts.
Mobile wallets allowed India to leapfrog the need of a developed banking infrastructure for financial inclusion. Thanks to
the ubiquity of smartphones, more and more Indians will have access to financial services. The mobile wallet in India will
be used to receive and make payments, open banking accounts, and even identify yourself.
However, even though the infrastructure is there, ecommerce sales in India represent just 2% of all retail transactions.
This means that the market offers excellent growth opportunities for local and foreign players like Amazon, Alibaba,
Walmart, Google, and PayPal, who are already pushing for more market share.
China
When it comes to cashless payments, everyone looks at China’s two successful wallets, WeChat Pay and Alipay, who
moved beyond payments to provide users with an entire ecosystem in which they can pay, get paid, communicate, borrow,
invest and virtually manage the entirety of their financial lives from a single place.
Starting out as an ecommerce wallet, the functionalities of these payment services have grown explosively. Almost every
real-life interaction can be mimicked within these apps and the daily number of interactions between users and their wallet
has grown enormously. Chinese consumers do not have to carry cash anymore when leaving their homes – their mobile
phone is all they need to pay and interact with merchants.
As the number of Chinese tourists has exploded in recent years, WeChat Pay and Alipay adoption has also grown in
Europe and the US. The two payment methods are no longer confided to China – they can be seen in more and more countries.
If the use jumps from Chinese nationals to Western consumers, these two apps could define a new standard for convenience,
one that Western consumers have never experienced before and one that no other company can currently match.
Although it is unlikely that Alipay and WeChat Pay will become mainstream in the US and Europe, it is, nevertheless, a risk
that few companies can afford. Banks and payment providers need to respond with their own offering.
To find out more about regional and global e-wallets in Europe, North America, India and China and their functionalities, please
check out Zooming into e-wallets – An East/West perspective infographic. The section incorporates research done
by The Paypers in an infographic mapping the 61 most prominent e-wallets today on several functionalities. The research
summary and results are also enclosed.
To find out more about the way people pay in different markets, please check out Payment Methods Basic and Overview
of How People Pay in Different Markets infographic, in which we provide an overview per country with details related
to some ecommerce data, the preferred payments methods and some of the best-known alternative payments methods in
the selected countries. ➔

(Alternative) Payment Methods in Focus
Introduction
The payments methods that we use for offline and online purchases are not static. They change year by year and are influen
ced by legislation, consumer preferences, advances in technology, innovations in customer services etc. Tracking down
the factors that determine the growth of a payment method is essential for understanding how the payments landscape is and
how it can be in the future.
We have looked at innovations and changes in the use of the most important payment methods across the globe. The market
is brimming with payment providers and alternative payment methods providers who compete to offer seamless secure
and low-cost payments options. The consumer can now choose from a large number of payment methods at the checkout,
thus, finding ways of differentiating from competitors is becoming challenging. Even so, we have seen plenty of innovation
and the payments landscape remains as dynamic as ever.
Credit and debit cards

Cards remain the most popular non-cash-based payments in the world and their usage is growing. In emerging countries,
cards have found a good ally in mobile payments. As payments interfaces like UPI in India make it easier for consumers
to link their cards with their e-wallets account, card transactions are booming, especially in immature markets.
Card schemes like Mastercard and Visa have put a lot of effort towards forging important partnerships with fintechs and
innovation. Visa has launched the pilot of a new dual-interface (chip- and contactless-enabled) biometric payment card
with Mountain America Credit Union and Bank of Cyprus. This will be the first pilot in the US to test an on-card biometric
sensor for contactless payments. Cards with embedded biometric authentication will make it easier for consumers to pay
in-stores and online. According to Visa’s own research, shoppers will also prefer fingerprint authentication to chip and PIN.
Visa and Mastercard are also working on tokenisation, which will offer cards enhanced security. The idea is to hide all
card details, when making a payment, behind a token (a series of numbers that encrypt the card information). In this way,
card details will not be revealed during a transaction. The measure aims to make cards more secure for online shopping,
a channel in which consumers are more reluctant to share their card information. Furthermore, tokenization will also solve
the problem of recurring payments with card on file who cannot be processed because the card has expired and the
consumer didn’t update the details.
Finally, by providing a more secure way of communicating card and payment details, tokenization can have a big impact
on the way different devices can be connected and used to make payments. The Internet of Things could be the next big
thing in payments and security technologies such as these could solve urgent security issues and allow users to make
payments via connected devices.
Speaking of ecommerce, both Mastercard and Visa are thinking of implementing a one-payment button. This would
allow online users to shop in a simple and seamless way, similarly to how they would make a PayPal payment. The project
is still in early stages, but it is based on the two companies’ tokenisation technologies. ➔

In the US, the credit card market shows significant innovation. Rewards programmes of all kinds proliferate, and many
credit cards have digital portals to help consumers manage purchases, debt, and account security. It also seems
that physical cards are becoming less and less important as most consumers engage with financial products on their
computers and mobile devices.
Prepaid cards
Prepaid cards have always been a preferred payment method of (underbanked) unbanked consumers. The cards allow
consumers to engage with online merchants without requiring a bank account. The convenience these cards offer is
counterbalanced by high fees. Consumers have to pay the issuing fee and may have to pay a fee when they charge
money to their prepaid card.
The prepaid card sector continues to grow by capitalizing on the needs of the unbanked, a category usually associated
with low-income consumers but according to a study by KPMG, a large portion of those unbanked or underbanked are
young adults.
Prepaid cards can appeal to a younger audience thanks to their usability and low-entry barriers. The gaming industry has
quickly capitalised on prepaid cards, offering younger consumers the option to purchase games online and make in-game
purchases. Prepaid cards can also feature rewards programmes, which encourage usability and customer retention.
Prepaid cards can be found within a card scheme offering such as Mastercard or Visa, but some, like paysafecard, work
outside traditional credit card schemes. Consumers can purchase a paysafecard at an outlet and then use the voucher
code to make purchases online. The company also offers a virtual wallet, ‘mypaysafecard’, which allows consumers to
pay on ecommerce websites by entering their username and password.
E-wallets/Mobile Payments
E-wallets are still in a period of proliferation; the last few years, banks, card schemes, Fintech, Big Tech, and merchants
have introduced their own e-wallets. The new possibilities that e-wallets bring are appealing for several reasons: they
are easily integrated on multiple devices, they are relatively easy to start using for customers, most can be used across
channels, and they open the door for extensive loyalty and marketing programs.
In Europe, the most popular e-wallet has been PayPal for years, but there is increased competition from both local
initiatives at a national level, such as Yoyo Wallet (UK), Lydia and Lyf pay (France), or Moneta (Poland). Furthermore,
the Big Tech wallets - Apple pay, Samsung pay, and the recently relaunched Google Pay (which merged Android Pay
and Google Wallet) - are making strides towards wider acceptance by merchants, integrating their services with several
POS terminals. There is an abundance of choice for the European consumer, supported by banks, Fintech, Big Tech,
and merchants. However, none of these e-wallets succeed in providing the consumer with a superior, all-encompassing
solution, so the e-wallet landscape in Europe remains fragmented. Consequently, we see e-wallets offering extra value to
consumers, which they provide by forging partnerships with large retail chains, like OK with Dutch retailers or Lyf Pay with
retail giant Carrefour, or with other e-wallets and fintechs, like Google Pay and Boon. ➔

Especially in Asia we see the promise of e-wallets be fulfilled: WeChat Pay, supported by TenCent, and Alipay, supported
by Ant Financial and Alibaba, have become increasingly present and encompassing in consumer’s financial lives due
to the connections to services outside of P2P or C2B payments, causing mobile payments in china to surge to CNY
81 trillion (USD 16.7 trillion). Besides offering almost complete coverage of online and offline shops in China, Alipay
also offers a wide range of other financial services, such as travel booking, money market investments, insurance, and
even loans, whereas WeChat pay is widely integrated in social media hosted by WeChat, and can offer merchants very
targeted marketing options. Furthermore, both services offer food delivery options, tax services, bill payments, and many
other services through integrated partners. This approach to e-wallets, i.e. offering an abundance of other services, has
caused e-wallets to be the most popular online payment method in China.
In India, the two largest e-wallets, Paytm and Mobikwik, are also widely used, but they are far less integrated into other
verticals. In the last few years, the Indian government has pushed for an increasingly cashless society, and e-wallets
have profited from this trend, offering a more convenient payment option than most banks. However, e-wallets face a
new competitor: Unified Payment Interfaces (UPIs). UPIs are increasingly adopted by consumers and merchants, as it
is backed by the banks, allowing for direct transactions from one bank account to another. Furthermore, India is about
to impose increased KYC regulations which threaten the existing non-bank e-wallets which could heavily impact the
use of e-wallets, but UPIs are exempt from these regulations. November 2017 marked the first month that UPIs had a
higher transaction volume than e-wallets.
In the US, e-wallets are only used by a small portion of the population, mostly due to the preference for cash and credit
cards. However, the market segment for e-wallets has been steadily increasing in the US for the past years, and several
players see opportunities in the US. PayPal is the most widely used e-wallet, but it no longer stands alone at the top:
it is followed by Amazon Pay and other merchant-backed wallets such as Starbucks Card and Walmart Pay. Alipay has
tried to enter the US market by acquiring US money transfer company Moneygram, but was blocked by the American
Government out of concerns for national security.
Online Banking ePayments (OBeP)

Online Banking ePayments (OBeP) is one of the most popular payment methods in Europe and PSD2 and instant payments
may give it a big push. PSD2 makes it easier for payments providers (TPPs) to create an overlay between different banks,
allowing the user to quickly authenticate and share her banking credentials to initiate payments. Furthermore, PSD2
mandates that banks have to develop APIs in order to provide a secure method for third-party providers to access the
consumer’s account and initiate payments on their behalf.
The integration of instant payments infrastructure reduces settlement times from hours to seconds and enables instant
settlement of refunds to consumer bank accounts, drastically improving the shopping experience. In countries like
Netherlands and Germany, where OBeP is already a dominant payment method, the migration to an instant payments
infrastructure will be more accelerated. ➔

In a research paper conducted by Ovum [Instant Payments and the Post PSD2 Landscape], it is estimated that by the
early 2020s, instant payments will have become a mainstream method for online payments and by 2024, they would have
overtaken payment cards for online purchases. In this context, we believe that instant payments will facilitate the growth
of OBeP as a payment method across Europe.
These two factors (PSD2 and instant payments) make Online Banking ePayments a convenient and safe payment method
that appeals to both consumers and merchants. Consumers will benefit from a superior user experience when making
online purchases and merchants can instantly accept payments from different banks with one connection.
When it comes to cross-border transactions, merchants may also see OBeP as more advantageous. Instead of integrating
with multiple local banks, merchants can support cross-border payments by connecting with a single provider who can
handle foreign exchange and refunds. Since initiatives in Europe like PSD 2 and SCT Inst aim to create a common and
unified payments infrastructure, Online Banking e-Payments may be the easiest way to connect merchants, banks and
consumers.
Aided by PSD2 and the SEPA Instant Credit Transfers, OBeP has the potential to compete as an alternative payment
method with credit cards.
In the US, payments providers and associations have noted the success iDeal, Trustly and Sofort. Bypassing the card
networks and enabling ACH payments will reduce costs and increase competition for efficiency. Companies like Walmart
and Amazon encourage the use of ACH-funded payments by providing cash rewards. If payments providers offer a
convenient way to initiate Online Banking e-Payments, the effects could be disruptive for the card networks whose
payments processing fees are much higher. PayWithMyBank, for example, is one of the best-known providers of ACH
payments in the US.
Direct debit
In Europe, subscription commerce can grow by EUR 190 billion every year, according to a study by ING. The same study
found that 5% of all European consumers’ spending goes to subscription services and the potential for growth is huge.
A report from McKinsey & Company, Thinking inside the subscription box: New research on e-commerce consumers,
shows that in the US, subscription for ecommerce services has grown by more than 100% a year over the past five years.
The largest such retailers generated more than USD 2.6 billion in sales in 2016, up from USD 57.0 million in 2011.
As more and more consumers shift towards subscription, direct debit may also become a more relevant payment method.
Direct debit schemes such as SEPA Direct Debit allows merchants to initiate recurring payments directly from the customer’s
account. Direct debit is a great payment method for recurring payments (e.g. bill payments) or for small-value purchases. ➔

Providers of direct debit such as SlimPay, GoCardless and AcceptEasy have made accepting direct debits easier.
Instead of connecting with a bank or Direct Debit bureau (which usually involves high set-up fees and a lot of paperwork)
merchants choose a direct debit provider and connect with the direct debit scheme via an API. Set-up fees are usually
lower and the offering is more competitive, as different direct debit providers try to capture a bigger share of the market
by charging lower fees or by providing value-added services.
Invoice and Pay Later Solutions

According to the Lost in Transaction report by Paysafe invoice payments continue to be a dominant payment method
in Austria (38% of Austrians now use payment by invoice, compared to just 18% using debit) and Germany (29%,
compared to 20% for debit cards and 25% for credit cards. Consumers find paying by invoice to be safer, as the product
has already been dispatched before payment is due and delivery is guaranteed.
In Germany, payments providers work to make paying by invoice as simple as possible. BillPay (part of Klarna), for
example, only requires customers to enter their name, address and email to pay by invoice, while offering 100% payment
guarantee to the merchant. RatePay, another German fintech, also offers open instalments and checkout lending
solutions for ecommerce, handling the entire payment process and carrying the risk for payment default.
In recent years, we have also noticed an increasing number of start-ups offering pay later solutions Pay later options
allow consumers to spread payments over a longer period of time and helps merchants convert shoppers who would
otherwise be unable to make a full payment for a product or service. These credit-based instalments schemes work by
either aggregating different lenders on a single platform and letting the consumer choose the most competitive credit for
their purchase (Divido) or by guaranteeing the credit for the purchase (Klarna).
Pay later providers can compete with credit cards by offering added value services like convenience (with Klarna, for
example, the user doesn’t have to provide payment details at the checkout), lower interest fees, faster processing times
and fees (for the merchant) and increased security (pay later providers may guarantee the credit in full, thus protecting the
merchant against bad credit).
Instalment plans at the checkout can help merchants differentiate from other competitors. For them, the biggest advantage
is offering an additional service to the customer. It also helps with conversion as many shoppers abandon the shopping cart
if the payment amount is too high.
As consumers’ appetite for credit and demand for more flexible payment option is growing, several after pay solution
providers have appeared on the market. In Europe, mash, Divido, CreditClick and AfterPay are all competing for the highly
lucrative Western market. In the US, Splitit, Future Pay and Affirm.
Pay later solutions are also growing in Asia Pacific, according to intelligence from GlobalData, who noticed a link between
the growth of ecommerce (driven by a growing middle-class population, widespread smartphone adoption, and rising
internet penetration) and demand for pay later solutions. ➔

In China, Ant Financial is the leading provider of pay later options. In Australia, PSPs like AfterPay and zipPay, are becoming
popular. The market in New Zeeland has also seen payments providers offering instalments plans, such as PartPay,
Oxipay, and Laybuy. Finally, in India, where credit card penetration is low and funding options limited, LazyPay offers pay-
later options to more than 250,000 customers in collaboration with major online merchants, including Zomato, Swiggy,
Foodpanda, Redbus, and Faasos.
Other payments companies, like PayPal (which acquired BillMeLater) and PayU have also entered this market, capitalizing
on credit lending for both retail and businesses.
It is interesting to note that many pay later providers do not stick to online commerce, but through partnerships, move to
offline retail. Such examples include the partnership between mash and Verifone or Klarna and Nets, which allows users
to pay by instalments at the POS. Also, of note is the launch of Mastercard Instalments, in partnership with BRD, which is
an example of pay later solutions suited for offline purchases and one designed by a card scheme.
Improvements in machine learning technology can be beneficial for pay later plans as it allows lenders to accurately
determine the creditworthiness of the applicant. Using artificial intelligence, lenders can perform background checks
faster and approve loans at a lower-risk. Artificial intelligence may also lower entry-barriers for those who do not have
a good credit score. As financing becomes easier and more secure, lenders will be more interested in joining pay later
schemes to reach more and more consumers.
Cash
With the emergence of new technologies, the use of cash is considerably impacted, as more and more payment methods
lead to the displacement of coins and notes across the globe. According to Euromonitor International, 2016 was the first
year in which we witnessed cash being dethroned, as the amount of money spent with cards was for the first time higher
than the amount spent with cash. The payment world is digitising, and banks are closing branches at the fastest pace in
decades; 1700 banks branches were closed in only one year in the US.
Despite the enthusiastic uptake of electronic payments, 1.7 billion adults are still operating outside the traditional banking
system, close to 40 million in the EU alone, being either unbanked or underbanked. There are people that have basic
accounts (checking or savings), but they rely on alternative financial services providers to handle their day-to-day
transactions. Some have all of the standard financial services products, but they prefer to pay with cash for various reasons.
According to a report by the European Central Bank (ECB), cash is still used in 79% of all transactions, amounting to 54%
of the total value of all payments. The demand for cash is also growing - the value of euro banknotes in circulation has
increased by 4.9% over the last five years, according to the European Central Bank. ➔

Even though there are many endeavours towards a cashless society, we are starting to witness the emergence of online
cash payment options (Paysafe with Paysafecash, YesByCash, BSPayone – Barzahlen.de, Cashly and more. Given the low
operational costs of kiosks, companies are increasingly looking to implement them to their businesses. Cash payments are
also popular for gaming (PayNearMe), offering an affordable and convenient way for players to fund their online gaming
accounts with cash. The ability to load accounts with cash at a retail store seems a major draw not just for customers
without access to credit cards or a checking account, but also for customers who simply prefer to fund their accounts with
cash.
Some markets are already much closer to going cashless. In Sweden, consumers already pay for 80% of transactions using
something other than cash, in the Netherlands 55%, in Finland 46% and in Belgium 37%. Britons use digital payments in
60% of all transactions, 33% of them stating they rarely use cash. In Sweden, Riksbank predicts that cash transactions
will make up less than 0.5% of the value of all payments made in the country in 2020. Even more than that, 900 of 1,600
Swedish bank branches do not store any cash, and some of them do not even have an ATM. South Korea is targeting to go
coinless in 2020.
The cashless trend is not following the same route in other technologically and economically powerful countries, such
as Germany. 53% of German transactions as of 2017 were still made with cash. One possible explanation for the reason
why Germans still prefer cash to other payment methods is related to the socio-demographic situation. The number of
older people prevails in Germany, and older people are sticking to their old payment habits. The explanation stems for the
country’s traumatic past, the collapses of its currency in the past, and a general pessimism about the future.
Despite local preferences for cash and the use of cash-based payments in certain cases, there are some clear signals that
we are heading towards a future with less cash, instant payments are on the rise (since November 2017, when the European
Instant Payments initiative went live, it has become possible to transfer euro amounts in less than ten seconds), cards will
lose market share in the coming years, voicebots are opening up new ways for merchants to connect with customers, and
cash is expensive (according to Mastercard, printing and distributing cash can imply high costs for national economies, of
up to 1.5% of GDP).
Direct carrier billing

In 2018, the number of mobile phone users is expected to reach almost 5 billion. With more mobile phones than credit
cards worldwide, a simple checkout flow and a bigger payments coverage, direct carrier billing (DCB) is a payment
method that in emerging markets is almost often the only way one can purchase online. Emerging markets represent
over 40% of the global DCB, generating app-store conversion rates about five times higher than credit cards. Ovum, in
“Carrier Billing Global Market Trends and Forecasts”, 2015, forecasts that DCB revenues will increase to USD 24.7 billion
in 2019, from USD 14.5 in 2014. ➔

In emerging markets, but also in some economically powerful countries like South Korea, a variety of purchases can be
billed on a mobile phone. In Norway, DCB is the second most popular payment method for digital gaming, while in the
other Nordic countries carrier billing has a 10-21% market share from digital content payments. The popularity of carrier
billing is attributed to its more user-friendly payment experience: consumers do not need to sign in or create additional
accounts to make payments, nor do they need to share their personal data online.
However, even with the advantage of a one-click payment flow for the user and a wide coverage, there are a few
obstacles when considering implementing this method: large transactional fees that are charged to the merchant
whenever a customer uses DCB, Mobile Network operators (MNO) that charge app retailers, the average price of just-in-
time purchase of minutes, regulatory constraints, the complex DCB ecosystem in emerging economies. PSD2 is seeing
single DCB transactions being capped to a maximum of EUR 50 per transaction, with a maximum monthly limit of EUR
300, and will continue to allow electronic money institutions to extend the scope of DCB from digital content to the
purchase of physical goods.
Nevertheless, we continue to witness a growth of DCB in premium rated services: subscription-based content models,
charity donations, TV voting, and competitions. For the subscription-based model, DCB as a payment method registers
an increase: according to Juniper Research, the value of digital content transactions paid for by carrier billing is expected
to reach USD 47 billion by 2020, more than 4 times 2015’s figure of just under USD 11.3 billion.
Despite its wide adoption, this payment method has yet to realise its full potential. In Europe, its growth was constrained
by a regulatory structure that was originally conceived with a limited vision of the utility of DCB. The new e-Money based
version of DCB (eDCB) removes these regulatory constraints and paves the way for the accelerated growth of this form
of payment.
Cryptocurrencies
Cryptocurrencies are not yet among the world’s payment trends but, despite the lack of usability, the number of payments
made using cryptocurrencies is consistently on the rise. Currently, there are over 1,000 cryptocurrencies available across
the globe, with over 150 billion dollars in market capitalisation, 10,000% up compared to where the figure stood in 2016.
The current number of unique active users of cryptocurrency wallets is estimated to be between 2.9 million and 5.8 million.
Big companies, such as Microsoft, PayPal, SubWay, Expedia, just to name a few, have started accepting Bitcoin, while
others, like WordPress, WooCommerce, Shopify, or Magento, let customers use plugins to integrate Bitcoin payments.
Although Bitcoin remains the dominant cryptocurrency, others are increasingly cutting into Bitcoin’s dominant market cap
share. While Bitcoin’s market capitalisation accounted for 86% of the total cryptocurrency market in March 2015, it has
dropped to 72% as of March 2017. The most spectacular growth of a cryptocurrency in 2017 was that of Ripple’ XRP, which
has grown more than 35,000% in just one year. Ether (ETH), the Ethereum network’s native cryptocurrency, has established
itself as the second-largest cryptocurrency. Dash and monero (XMR), increasingly popular in 2017 when it constituted a
combined 4% of the total cryptocurrency market capitalisation, have experienced a decrease in terms of price. ➔

The decrease was witnessed in the case of other cryptocurrencies as well, starting with January-February 2018, due to the
fact that governments and central banks around the world raised the spectre of future regulation for the cryptocurrencies
space, Google banned cryptocurrency advertising and studies suggested the 2017 highs were artificially inflated (especially
for Bitcoin).
What makes cryptocurrencies highly affordable compared to other payment methods is lower transaction fees (between
USD 0.30 to USD 1.00 for Bitcoin). The nature of cryptocurrencies’ protocol makes each transaction final. Once the
payment has been made, a customer cannot cancel the transfer. This situation keeps businesses safe against suffering from
chargebacks. The entire money transfer process usually takes a maximum of 10 minutes, depending on the confirmation
from the blockchain. While traditional payment methods depend on third-party companies and banks (and transactions
can take up to a few days), for cryptocurrency transactions there is no financial institution acting as an intermediary.
The advantage of a rapid money transfer process for cryptocurrencies is currently challenged by instant payments, whose
transactions take just a few seconds. Another important benefit is related to the fact that there is no risk of sensitive
information being compromised with a cryptocurrency transaction, because none of the customer’s information is attached
to it.
The most cited risks of cryptocurrencies are in terms of stability of the platforms supporting them, fluctuation in price, and
cyber-threats like theft, hacking and loss. Cryptocurrencies are perceived as being too volatile for everyday transactions
and difficult for consumers to use. The average consumer would feel uncomfortable paying today with a currency that
could have a much greater purchasing power tomorrow. Likewise, the average grocer would be at a disadvantage due
to the potential for the currency collected to worth less than the cost of goods sold. The association between the use
of cryptocurrencies and illegal activities such as money laundering is another risk given by cryptocurrencies, which led
to the prohibition of their use in certain countries. In addition, it is worth mentioning the fact that the emergence of
technologies such as quantum computing could threaten the existence of established blockchains and, therefore, that of
cryptocurrencies.
Cryptocurrencies could prove efficient in countries with a low access to financial services or in countries where credit
cards register high decline rates. High decline rates are a result of the fact that all of the major credit card companies have
complex anti-fraud monitoring programmes, especially in countries like Mexico, India, Brazil, the UAE, and other areas
where there is a higher incidence of fraud. According to Sonny Singh, BitPay’s Chief Commercial Officer, cryptocurrency is
an ideal payment method for ecommerce, in industries like technology, electronics and jewelry where there is a high risk of
chargebacks, fraud and identity theft. Cryptocurrencies could also make sense in travel, as there is no currency conversion.
As Sonny Singh mentions, gaming is another hot industry for cryptocurrency spending, a high growth of the usage being
forecasted in this case. Geographically speaking, Bitcoin is mostly used across North America and Europe, with a growth in
LATAM and APAC countries. ➔

Sources:
WorldPay, Global Payments Report 2017
https://www.worldpay.com/global/insight/articles/2017-11/global-payments-report-2017
Capgemini, BNP Paribas, World Payments Report 2017
https://www.worldpaymentsreport.com/download
Preparing for UPI 2.0 – Why merchants will be the biggest winners by Abhishek Banerjee
https://www.thepaypers.com/thought-leader-insights/preparing-for-upi-2-0-why-merchants-will-be-the-biggest-
winners/773409
The anatomy of a good API – How to connect banks, TPPs and consumers by Ralf Ohlhausen
https://www.thepaypers.com/interviews/the-anatomy-of-a-good-api-how-to-connect-banks-tpps-and-
consumers/773100-38
The renaissance of the Automated Clearing House in the US by Alexandre Gonthier
https://www.thepaypers.com/expert-opinion/the-renaissance-of-the-automated-clearing-house-in-the-us/770148
Ovum, Instant Payments and the Post PSD2 Landscape
https://ovum.informa.com/resources/product-content/instant-payments-and-the-post-psd2-landscape
Paysafe, Lost in Transaction Report
https://www.paysafe.com/lostintransaction/
The use of cash by households in the euro area, European Central Bank, November 2017
The unstoppable rise of the Chinese traveller – where are they going and what does it mean for overtourism?
https://www.telegraph.co.uk/travel/comment/rise-of-the-chinese-tourist/
UK Payment Markets, 2017, UK Finance
Banks Shutter 1,700 Branches in Fastest Decline on Record, The Wall Street Journal
(https://www.wsj.com/articles/banks-double-down-on-branch-cutbacks-1517826601)
1.7 billion Adults Worldwide do not Have Access to a Bank Account, The Wall Street Journal
(https://www.forbes.com/sites/niallmccarthy/2018/06/08/1-7-billion-adults-worldwide-do-not-have-access-to-a-bank-
account-infographic/#2bfab6594b01)

Close to 40 million EU citizens outside banking mainstream, WSBI
(https://www.wsbi-esbg.org/press/latest-news/Pages/Close-to-40-million-EU-citizens-outside-banking-mainstream.
aspx)
Why Europe still needs cash, European Central Bank
(https://www.ecb.europa.eu/press/key/date/2017/html/ecb.sp170428.en.html)
Emptying the tills. Some Europeans are more attached to notes and coins than others, The Economist
(https://www.economist.com/finance-and-economics/2016/08/11/emptying-the-tills)
Why Sweden is close to becoming a cashless economy, BBC News
(https://www.bbc.com/news/business-41095004)
Sweden leads the race to become cashless society, The Guardian
(https://www.theguardian.com/business/2016/jun/04/sweden-cashless-society-cards-phone-apps-leading-europe)
South Korea can offer roadmap to cashless Asia, Reuters
(https://uk.reuters.com/article/us-south-korea-cash-breakingviews-idUKKBN13R0OT)
Cash remains the most favoured means of payment, Deutsche Bundesbank Eurosystem
(https://www.bundesbank.de/Redaktion/EN/Topics/2018/2018_02_14_zahlungsverhalten.html)
Five global indicators that we are heading towards a cashless future, Worldline
(https://worldline.com/en/home/newsroom/press-releases-general/2018/pr-2018_06_04_01.html)
The Global Journey from Cash to Cashless, Mastercard
(https://www1.mastercard.com/content/intelligence/en/research/reports/2013/mastercard-advisors-cashless-journey--
the-global-journey-from-ca.html)
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(https://www.statista.com/statistics/274774/forecast-of-mobile-phone-users-worldwide/)
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(https://www.juniperresearch.com/press-release/content-business-model-pr1)
Carrier Billing Global Market Trends and Forecasts, Ovum, 2015

Carrier billing in the Nordics: 2017 Market Report, Fortumo
Operators eye content revenues as billing opportunity reaches $47 billion by 2020, Juniper Research
(https://www.juniperresearch.com/press/press-releases/operators-eye-content-revenues-as-billing)
The Future of Direct Carrier Billing in Europe and e-Money, Boku
Germany is still obsessed with cash, Bloomberg
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upload/research/centres/alternative-finance/downloads/2017-global-cryptocurrency-benchmarking-study.pdf)
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ACI Worldwide
What Are the True Benefits of Real-Time Payments for Merchants?
Real-time payments (RTP), often also referred to as instant, The RTP cost-cutting opportunity
immediate or faster payments, is one of the hottest topics in The ability to deliver payments back to customers in real-time has
the payments ecosystem, as both banks and merchants look to advantages in several areas, not least in improving the process
match their services to customer demand and expectations. around reverse logistics in digital commerce, for example. RTP
should also be more cost-efficient than processing refunds
The rollout of an RTP infrastructure from banking and payments back through the cards networks, delivering cost savings for
organisations is driving a change in attitudes across the merchant merchants. In addition, there is potential for merchants to reduce
community. Our recent research study with Ovum , where card acceptance costs more broadly, effectively by cutting out
we explored the payments investment choices of merchants the middleman.
globally, supports this perception shift, with 65% of merchants
now being interested in accepting RTP - up from 57% in 2017. RTP can also be expected to deliver operational and cost
saving benefits from risk reduction, through a drop in fraud and
Real-time customer experience benefits chargebacks in online channels – a benefit which merchants
While consumers certainly want fast, frictionless payment across all sectors will welcome.
options, real-time payments can deliver more customer benefits
than just the ability to transfer money instantly. RTP can offer the Beyond the realm of consumer payments, merchants may also
opportunity for consumers to streamline their physical wallets, be able to use RTP to improve cash flow management, negotiate
move to mobile and take better control of their finances. 78% of more favourable terms with suppliers and pay short-term or
merchants now believe that RTP will deliver customer experience temporary workers more easily - a bonus that may be helpful
improvements, up from 59% in 2017. during peak trading periods.
A real-time payments infrastructure can significantly improve Given all the above, it is not surprising to see that 78% of
the experience of refunds and disbursements – a continuing merchants now believe RTP will deliver operational cost-savings
problem area for consumers and merchants alike, with card up from 57% in 2017. ➔
refunds usually taking at least a few days to process and clear.
It is perhaps unsurprising that businesses in the retail and
telecoms verticals – areas in which refunds can be particularly
sensitive and costly – are the most positive about RTP, with 82%
of retailers and 80% of telecom companies seeing the potential
to leverage real-time payments to deliver enhancements for their
customers.
In countries where the banking and payments infrastructure is
under-supported, RTP may offer a useful additional payments
option for consumers. In our survey , merchants in Asia were
the most positive about real-time payments, particularly in India,
Malaysia and Thailand, where more than 90% believe that RTP
holds the key to improving the customer payments experience.

ACI Worldwide
Key considerations for merchants implementing RTP

It is clear from the Ovum/ACI survey that merchants increasingly
Dean Wallace
recognise the many direct operational benefits they can enjoy Practice Lead Real-Time and
through real-time payments, as well as the potential for RTP to Digital Payments
unlock customer service enhancements. As RTP gathers pace ACI Worldwide
around the world, merchants must ensure they have the right
processing capabilities in place to take advantage of the oppor
tunities. For some, this may involve amending development
roadmaps or seeking new functionality from their payment pro About Dean Wallace: Dean is an avid emerging
viders, while others will need to look to their banking and/or payments enthusiast specialising in real-time &
acquiring partners to unlock the benefits. digital payments. At ACI, Dean has held various
product leadership roles covering Cards front and
back-office functions, Mobile payments, Real-Time
& Digital Payments and Enterprise Payments Hub
solutions. Prior to ACI, Dean has held a number of
roles with VocaLink, TSYS, and IBM.
About ACI Worldwide: ACI, the Universal Pay

ments UP) company, powers electronic payments
or more than 5,100 organisations around the world.
More than 1,000 of the largest financial institu
tions and intermediaries, as well as thousands of
global merchants, rely on ACI to execute USD
14 trillion each day in payments and securities.
Download your free copy of the ACI and Ovum 2018 In addition, myriad organisations utilise our elec
Survey on the Payments Investment Choices of tronic bill presentment and payment Services.
Merchants Around the Globe. Through our comprehensive suite of software
solutions delivered on customers’ premises or
through ACI’s private cloud, we provide real-time,
immediate payments capabilities and enable the
industry’s most complete omnichannel payments
experience.
www.aciworldwide.com
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Trustly
Capitalising on Cross-Border Ecommerce with Online Bank Payments
Ecommerce in Europe is thriving, and as consumers hunt for the next five years, the popularity of online bank payments will
cheaper options, specific brands and more unique items, they are exceed that of credit and debit cards globally. Because of the high
increasingly turning abroad. In fact, of the 260 million Europeans cross-border ecommerce from markets like the Nordics, Germany,
who shop online, 186 million do so from foreign websites, and Poland, which show a great preference for online bank
according to E-Commerce in Europe 2017, a report produced payments, retailers that don’t offer localised payment methods
by European postal service PostNord. This is good news for could lose out on cross-border sales. So what’s driving the
online retailers, but also poses a major challenge. A retailer might adoption of alternative payment methods, and specifically online
be able to get away with an online checkout that only offers card bank payments? Below are four main factors:
payments if their shoppers are only from the UK, where cards
are the dominant payment method. However, retailers must offer Security
alternative payment methods if they want to cater to shoppers At Trustly, we conducted a survey on The State of Online Banking
from other European markets, where cards aren’t always the with research firm NEPA that revealed consumer attitudes towards
preferred payment method. Below are graphs showing how banks and bank transfers. It revealed that many Europeans (68%
consumers in different European markets prefer to pay online, of Spaniards, 66% of Italians, 61% of French, 55% of Germans,
according to data from PostNord. You can see that while some 55% of Dutch, 51% of Swedes) agree that they’d be more likely
markets have a high preference for debit and credit cards, others to shop from international websites if they didn’t have to give out
prefer alternative payment methods like e-wallets, invoice, and credit or debit card numbers to unknown foreign merchants. They
online bank payments. go on to agree that they’d be more likely to shop on foreign sites
if online banking was offered more often as a payment method
(59% of Spaniards, 59% of Italians, 55% of Dutch, 47% of French,
44% of Germans, 35% of Swedes).With online bank payments,
strong two-factor authentication is required, so the risk of fraud is
virtually zero. When this payment method is offered, consumers
feel safe shopping abroad because they don’t risk compromising
their card details.
Convenience
The convenience of alternative payments is increasing, and not
surprisingly, this is driven by innovation and technology. In Sweden,
for example, Mobile BankID is a secure app that lets consumers
authenticate themselves with just a few taps and is widely used
by banks and government organisations alike. Similarly, in the UK,
Barclays is making it easy for its users to verify themselves via PIN
sentry. As digital authentication methods become more mainstream
in other markets, it seems natural that online bank payments will
Of course, these payment preferences aren’t static. According grow in popularity due to the increased convenience. On top of that,
to Worldpay’s Global Payments Report 2017, more than half when paying with cards, consumers need to enter a long string of
of all online transactions will be made using alternative payment numbers; with online bank payments, they only need their log-in
methods by 2021. The report even goes as far as to say that over credentials to their online bank, which most know by heart. ➔

Trustly
In contrast to e-wallets like PayPal, online bank payments don’t
require registering a separate account, just access to one’s online

Luke Flomo
bank. Head of e-Commerce
Trustly
Simplified returns
Returns are a substantial resource drain for online retailers.
Customers often order several sizes of one item to try on at home
before deciding which to keep, resulting in a high return rate.
This creates logistical and payment complexities, which ultimately About Luke Flomo: Luke is a payments expert,
eat into margins and frustrate customers. However, a great returns bringing a wealth of knowledge with his 12 years
experience can also enhance their brand and build customer of experience in the industry. He has worked for
loyalty, thus optimising this trade-off is vital for a customer-first, the likes of Barclaycard, WorldPay and, more
fast-growing online retailer. An online bank payment provider recently, Klarna, where he headed up the Sales
like Trustly can help retailers simplify the administrative hassle and Partner channel.
and reduce the cost of processing refunds with instant refunds.
Customers also love instant refunds because they receive funds About Trustly: Trustly is a Swedish fintech
directly into their bank account, allowing them to purchase company that makes online bank payments fast,
more goods straightaway instead of waiting days or even weeks simple and secure. Today, it covers 29 European
to receive their money. One large Nordic online retailer that countries and its payment solutions attract global
implemented Trustly’s instant refunds saw that its customers merchants in ecommerce, travel, financial services
had 55% larger basket sizes and made 84% more purchases in and more. As of November 2017, the company
the past 12 months. Overall, this equaled 185% more spend on had processed more than EUR 10 billion worth of
goods when using Trustly. payments since its inception in 2008.
Regulation www.trustly.com
Online bank payments align closely with PSD2, the legislation
now being adopted across the EU that aims to drive innovation,
foster competition, increase security and reduce costs for con
sumers.Banks are encouraged to create APIs that let third-party
payment providers access consumer bank accounts on their
behalf and initiate bank payments. As PSD2 now requires all
online payments to carry two-factor authentication, it is adding
friction to the card experience, while simultaneously simplifying
the online bank payment experience for consumers. These factors
combined are likely to further drive adoption of online bank pay
ments. So as consumer payment preferences shift away from Share this story
cards and toward alternative payment methods, online retailers
that offer these innovative methods can streamline the ecommerce
experience and boost conversion in the checkout.

Trustly
Type of payment method Online bank payments
Active since 2008
Operational Area Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia,
Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania,
Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia,
Slovenia, Spain, Sweden, United Kingdom
Industries Ecommerce, travel, financial services, digital goods, subscriptions, online gaming
How it works You can pay with Trustly in 3 simple steps: 1. Select your bank and log in as you
normally do. 2. Choose the account from which you wish to pay. 3. Confirm your
payment with your preferred authentication method.
Potential reach All banked consumers across Europe
Market Share NA
Acceptance NA
Chargeback Risk None
Facts In 2018, Trusty was recognised by the Financial Times as one of Europe’s 1000
fastest growing companies. It also won Best Payments Company at the EGR B2B
Gaming Awards.
Settlement currency EUR, SEK, NOK, DKK, GBP, PLN
Processing currrency EUR, SEK, NOK, DKK, GBP, PLN
Currency available for consumer EUR, SEK, NOK, DKK, GBP, PLN
Transaction volume Over EUR 10 billion since founding
Implementation requirements API manual online, designated integration support, plugins for web shops
(non technical)
Reconciliation Reconciliation information (web)
Pricing Per transaction percentage and/or fixed fee, which varies depending on volume
Channels (POS/ecommerce) Online
For the complete company profile please click here

Klarna
The Moment Is Now for Pay Later
These days, online shoppers have more payment options to choose The flip side of this excitement is lows caused by anxiety and guilt,
from during the checkout, alongside the usual card options. with 52% of millennials saying they worry that they can’t afford the
Klarna’s Pay later - which has been adopted by the likes of ASOS, purchase during checkout. One in five millennials has abandoned
Arcadia Group and JD Sports - lets customers pay for their items a purchase due to worries that they will regret it later.
up to 30 days after they’ve received their delivery.
Solutions like Pay later are the perfect antidote to these cold feet
Pay later is our flagship product here at Klarna. By introducing - with 20% of millennials saying they would feel less guilty if they
this option to the UK market, we’ve helped fix one of the age-old were offered deferred payment options, and one in five would be
problems around online shopping: customers not wanting to part more likely to complete a purchase if they knew they could spread
with their money until they’re sure the goods are as described the cost over time. It’s vital that merchants offer these choices
and right for them. That makes Pay later really beneficial for at the checkout, so shoppers can be reassured a transaction is
consumers, who are able to try before they buy, and don’t face achievable and risk-free.
the cash flow issues of having to wait for items they’ve returned,
to be refunded. In turn, merchants benefit from increased sales, The domino effect
greater customer loyalty and competitive differentiation. A second important factor to consider when looking at the growth
of Pay later is the sector in which it is most popular - fashion.
In fact, with Klarna’s Pay later, retailers have been able to increase The retail sector is notoriously competitive, and consumers are
average basket size by 20% and basket value by 15%. Pay later increasingly fickle. Shoppers have many options to choose from,
has also been proven to improve shopper purchase frequency by so if they’re not getting an optimised service or user experience
15%. But let’s dive deeper into why Pay later is such a popular from one merchant, they will simply go elsewhere.
choice for consumers - why do shoppers love it?
That’s why retailers need to keep a close eye on what their com
Emotional ecommerce petitors are doing, and what their customers want. By letting
As the online shopping industry has developed, retailers have shoppers turn their sitting rooms into fitting rooms retailers put
had to become increasingly attuned to customers’ needs to stay the customer in control and ultimately create a deeper brand
ahead. Unsurprisingly, there’s a huge amount of psychological relationship. And once one merchant sees that Pay later yields
and emotional factors at play in the average consumer’s shopping big dividends, it creates a domino effect - with other retailers
journey. Research we conducted with Reading University showed integrating the same service to avoid falling behind. When it
the traditional linear customer journey is now more akin to a roller comes to retail innovation, fortune favours first-movers.
coaster, marked by highs and lows of emotion. This is especially
true of millennials, who make up the largest percentage of online A payments revolution
shoppers. Finally, it’s also worth taking note of the wider financial context in
which Pay later is being used. The past decade has seen huge
Separately, consumer research we conducted showed that two innovation in the payments sector, largely driven by new technology
thirds (68%) of millennials reported feeling excited when adding and players who have turned the financial services industry on its
items to their online basket, compared to less than a quarter head. ➔
(24%) of people over 55.

Klarna
Ten years ago, consumers were limited to cash and cards, most
of which were provided by the Big Four. Fast forward to today,

Luke Griffiths
and we have more choice than ever before: from contactless to General Manager
cryptocurrencies, and everything in between. UK consumers have Klarna UK
been especially open and quick to adopt these new methods -
particularly when compared to other European markets like
Germany or Italy. So it’s not surprising that solutions like Klarna’s
Pay later have been well-received, and have been added to the
consumers’ payments arsenal. About Luke Griffiths: Luke Griffiths heads up

the UK division of Klarna, where he oversees
However, there’s still work to do. Payment is still a sticking point Klarna’s expansion in the market by introducing
for many consumers, and emotional factors can cause hesitation innovative products - such as Pay later - which
at the checkout - perhaps the most important step in the online simplify the payments process. With over 15
customer journey. Offering a fast and convenient checkout with years’ experience in management and digital
flexible payment options is key to winning sales and customer marketing, Luke previously held roles at eBay
loyalty. and Wyndham Worldwide. He also has extensive
international experience, building and growing
businesses across the EMEA region.
About Klarna: It’s all about smoooth (yes, with

3 ooo’s). Klarna is Europe’s leading payments
provider and a newly-licensed bank, which wants
to smooothen the payment experience by giving
shoppers the option to pay now, pay later or
over time. Klarna works with 89,000 merchants,
including ASOS, Topshop and JD Sports in the
UK, across Europe and North America.
www.klarna.com
Share this story

Klarna
Type of payment method Pay now, Pay later and Slice it
Active since 2005
Operational Area Europe and the US
Industries All retail
How it works It’s all about smoooth (yes, with 3 ooo’s). Klarna is one of Europe’s leading payments
providers and a newly-licensed bank, which wants to revolutionise the payment
experience for shoppers and merchants alike. Founded in Stockholm, Sweden, in
2005, the fintech unicorn gives online consumers the option to pay now, pay later
or over time – offering a trusted, frictionless and smoooth purchase experience.
With Klarna’s mobile-optimised online checkout shoppers can pay immediately via
card, APM or online bank transfer (Sofort). Pay later, Klarna’s flagship product, lets
shoppers buy goods and pay for them up to 30 days later. And with Slice it - Klarna’s
consumer finance solution - shoppers can pay for higher-ticket items in flexible
monthly installments, with an easy application process and real-time decisioning.
Potential reach In 2017, 19 million shoppers used Klarna
Market Share Klarna works with 89,000 merchants
Chargeback Risk No risk
Settlement currency Same as processing
Currency available for consumer GBP, EUR, USD + others
Implementation requirements Local entity and bank account required

(non technical)
Channels (POS/ecommerce) Ecommerce

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Large-Scale Payments Industry Overviews
Once a year, The Paypers releases four large-scale industry overviews covering the
latest trends, developments, disruptive innovations and challenges that define the
global online/mobile payments, e-invoicing, B2B payments, ecommerce and web
fraud prevention & digital identity space. Industry consultants, policy makers, service
providers, merchants from all over the world share their views and expertise on
different key topics within the industry. Listings and advertorial options are also part of
the Guides for the purpose of ensuring effective company exposure at a global level.
Open Banking & APIs Report 2017

A new era of innovation in banking
Open Banking and APIs B2B Fintech: Payments, Online Payments and Web Fraud Prevention
Supply Chain Finance Ecommerce & Online Authentication
& E-invoicing
For the latest edition, please check the Reports section

Zooming into e-wallets
An East / West perspective

E-Wallets in Focus
The term ‘wallet’ or ‘e-wallet’ is ill-defined. Some define an e-wallet as the digital equivalent of the ‘leather wrapper’
around all your cards and other content in your physical wallet. Others refer to e-wallet as being a stored-value account
for e-money, a license being required for the latter.
In this report, we define an e-wallet as a digital tool (software or app) for consumers to store their payment methods. It
stores credentials of (among others) debit cards, credit cards, and alternative payment methods. Some e-wallets also
store loyalty programmes.
An e-wallet allows someone to make electronic transactions with an improved checkout and payment experience online,
compared to keying in all payment credentials every time a purchase is done. Wallets can function in online and physical
stores.
E-wallet providers
Providers of an e-wallet are:
•B
anks, who connect their wallets to a bank account and cards, e.g. Chasepay in the US, Paylib in France, Pay by Bank
App in the UK, Vipps in Norway, and MobilePay in Denmark;
• Card schemes, offering their own e-wallet solution, e.g. Visa Checkout and Masterpass;
•F
intechs, either independently or in collaboration, that offer a wide variety of services and e-wallets, like SEQR, which
tries to attract customers by offering special deals to users of the e-wallet, or Yoyo Wallet in the UK, which adds a layer
of loyalty programmes to their wallet. Sometimes these e-wallets are more suited to a specific vertical, like MuchBetter
is to the gaming industry;
• Big Tech companies that have their own mobile e-wallets, the so-called ‘Pays’; Apple Pay, Android Pay, Samsung Pay,
and Google Pay. These companies have the ambition to integrate mobile into the payment behaviour of consumers,
but still struggle to add enough value for consumers to make the switch to e-wallets. To aid this, the Pays make efforts
to add loyalty and marketing programs for consumers. In Asia, there is Alipay, an e-wallet belonging to Alibaba, which
enjoys huge popularity throughout the continent. In China specifically, the e-wallet developed by the social networking
site WeChat, WeChat Pay, is very popular due to ease of integration into the full range of transactions most people
make, from groceries to paying bills;
• B ig merchants, like Starbucks, which add a lot of value and offer convenient payment options in their stores for
adopters of their mobile e-wallets. These wallets do not expand into other stores currently, but are very popular,
especially in the US, spearheaded by wallets such as Walmart Pay and Kohl’s Pay. ➔
34 PAYMENT METHODS REPORT 2018 • Zooming into e-wallets

E-Wallets in Focus
Last year in e-wallets

Globally, China seems to be far ahead of the pack when it comes to e-wallets. This is exemplified by the gigantic Alipay
and WeChat Pay, who succeed in combining social networks with ecommerce and financial services. They built their
e-wallets from a need for a reliable and convenient payment infrastructure that most of the population lacked at the time.
These two e-wallets did not come directly from the fintech industry, but rather from an ecommerce retailer (Alibaba) and
a social network (WeChat), who designed their wallets to suit the ecommerce and social platform that they appeared on.
Similarly, in India e-wallets are widely accepted and the market is mostly determined by the two largest e-wallets: Mobikwik
and Paytm. The growth of e-wallets was further aided by the governmental ban on cash, causing consumers to switch
completely to digital transactions. However, in the last year, e-wallets have been losing ground to the newly popular
Unified Payment Interfaces (UPIs), which prove even more useful than e-wallets for most consumers.
In Europe, the landscape is far more homogeneous and offers a multitude of additional challenges. By introducing contactless
card payments, banks have put e-wallets that present themselves as simply a convenient way to pay in a difficult position;
in-store, it is hard to compete with the ease-of-use of a contactless card payment, and online, merchants offer their
returning customers card on file (one-click payments), rendering the convenience of e-wallets no longer a
decisive factor for consumer adoption.
Therefore, e-wallets have started to adopt several secondary functions in their service; an increasing number of e-wallets
now offer marketing options for merchants, driving the acceptance rate of their e-wallets, and loyalty options to
consumers, driving the adoption. Prime examples of this are Lyf Pay in France, which partnered with Carrefour to offer a
solution that could be used both in-store as well as online at most locations of the retail giant. OK in the Netherlands aims
to do the same, with the support of more than 100 retailers across the nation.
Big Tech is also slowly entering Europe: Apple Pay, Samsung Pay, and Google Pay are all still in the process of rolling out
to Europe, so it still remains to be seen if and how the acceptance of these e-wallets will take shape, but the Pays are
working to include an increasing number of marketing and loyalty options into their platforms to attract more customers.
There is one large merchant-based e-wallet in Europe: Amazon Pay. Amazon Pay is active in 26 European countries, but
its use is most often limited to the Amazon web store. However, this can be enough to be a major player in the online
e-wallet ecosystem: in Germany, 1% of all online transactions are made through Amazon Pay because Amazon banned
all other e-wallets (but not other payment methods) from the German version of the website.
In the US, e-wallets are mostly driven by the retail sector. Starbucks Wallet is the most widely adopted e-wallet in the
US, but its use for consumers is relatively limited; one can only use it to pay in a Starbucks shop. Other retailers, such as
Walmart, offer the same: a payment option for both their banked and underbanked customers, only usable in their
own stores, meant as an alternative to coupons or customer cards. ➔

E-Wallets in Focus
In conclusion, e-wallets are moving towards offering a wider variety of added value to engage customers and merchants.
When this is done effectively, like in Asia, this can result in tremendous success. However, in more challenging environments
e-wallets struggle to gain reach and adoption, especially without partners. The world is brimming with e-wallets that come
up with new ways to add value and find the best partnership to successfully be adopted into the payment landscape.
The infographics
The Paypers conducted another round of research into the e-wallet landscape globally, which produced a new summary of
the e-wallets in 2018. From these results, two infographics were created to further visualise what the ecosystem looks like
currently and how players relate to each other in terms of their presence globally and their offering.
The following elements were researched for every e-wallet in the report:
Variable Description
Platform: Dependent / A platform dependent e-wallet is only offered on a specific platform (e.g.
Independent Apple, Android, or Samsung). A platform-independent e-wallet runs on
several different devices.
Business model: Transaction- Whether the business model of the provider is primarily based upon
driven / Data-driven transactions or on data.
Scope: Payment / Payment + The scope of a company is based on how broad the services that they
Marketing and Loyalty offer are. In this paper, we distinguish between companies that only
provide payment services, and companies that also provide marketing and
loyalty services.
Context: In-store / Online and The context in which a consumer can pay with the e-wallet. Whether this is
Mobile / Bills / Print and TV only in store, or online or mobile, whether they can pay returning payments,
and if they can purchase products from print, like flyers, or television.
Proximity / Remote Whether an e-wallet offers proximity payments (in-store), remote payments
(online), or both.
P2P / C2B Whether an e-wallet offers peer-to-peer payments, customer-to-business

payments, or both.
Backing Whether an e-wallet is backed by a merchant, bank, fintech, big tech,

government, or a combination of these institutions.

E-Wallets in Focus
Disclaimer
The results of our research have all been based on a combination of desk research conducted by our editors and the input
of our partners, most notably Innopay and Kapronasia. As thorough as our researchers are, however, some variables remain
hard to distinguish and much information is hard to verify. Reports of transaction volume are in particular often incomplete,
unavailable, or self-reported on part of the e-wallet provider.
Sources
Card on File (CoF), Adyen
https://docs.adyen.com/developers/payment-glossary/card-on-file-cof
OK mobile payment app to roll out in the Netherlands, The Paypers
https://www.thepaypers.com/mobile-payments/ok-mobile-payment-app-to-roll-out-in-the-netherlands/772577-16
Onlinehandel erst die Ware, EHI
https://www.ehi.org/de/pressemitteilungen/onlinehandel-erst-die-ware/
BillMo And Walmart Do Money For People Who Don’t Trust Banks, pymnts.com
https://www.pymnts.com/news/digital-banking/2018/billmo-walmart-steve-labella-digital-wallet/

Overview of Regional and Global E-Wallets in Europe,
North America, India and China
Europe North America India China

Global
Global
Regional
Regional

Mapping of E-Wallet Functionalities
Payments + Marketing & Loyalty

Proximity + Remote
Proximity + Remote
Remote
Remote
Payments + Marketing & Loyalty

Wallets Ecosystem Explained
Research summary and results

Proximity/
Company Platform Business Model Scope Context P2P/C2B Backing Head office Scale Transaction Volume Instruments Website Founded
Remote
Transaction-
Aadhaar Pay App Independent 1) Payment 3) Bills Prox C2B Government India Regional N/A Bank Debit https://aadharpaymentapp.org 2017
driven
Transaction- 2) Loyalty & Bank Debit, Credit
AirtelMoney Independent 3) Bills Rem P2P+C2B FinTech India Regional 15 Mln users http://www.airtel.in/money/ 2012
driven Marketing Card, Debit Card
Transaction- 2) Loyalty & 2) Online, Bank Debit, Credit
AliPay Independent Prox+Rem P2P+C2B Merchant China Global USD 3 Tln (2016) https://global.alipay.com 2004
driven Marketing Mobile Card, Debit Card
Bank Debit, Credit
Transaction- 2) Online,
Allied Wallet Independent 1) Payment Prox+Rem C2B FinTech UK Global 110> Mln users (2016) Card, Debit Card, https://www.alliedwallet.com/e-wallet/ 2002
driven Mobile
Cash
2) Loyalty & 2) Online, Bank Debit, Credit
Amazon Pay Independent Data-driven Rem C2B Merchant US Global N/A https://pay.amazon.com/uk/ 2007
Marketing Mobile Card, Debit Card
1) Payments,
Transaction- 2) Online, Credit Card, Debit
Apple Pay Specific Loyalty & Prox+Rem P2P+C2B Technology US Global N/A http://www.apple.com/apple-pay/ 2014
driven Mobile Card
Marketing
Transaction- 2) Online, Bank Debit, Credit
Baidu Wallet Independent 1) Payment Rem+Prox P2P+C2B FinTech China Regional 100 Mln users http://www.baidu.com/
driven Mobile Card, Debit Card
Transaction-
BHIM app Independent 1) Payment 3) Bills Prox+Rem P2P+C2B Government India Regional 19 Mln users Bank Debit https://www.bhimupi.org.in/ 2016
driven
Transaction- 2) Loyalty & 2) Online,
Boon Independent Prox+Rem P2P+C2B Bank Germany Regional N/A Bank Debit https://www.boonpayment.com/de/en/ 2015
driven Marketing Mobile
Bunq Independent 1) Payment Prox+Rem P2P+C2B Bank Netherlands Regional N/A Bank Debit https://www.bunq.com/ 2015
driven Mobile
Transaction- 2) Loyalty & 2) Online, https://www.capitalone.com/
Capital One Wallet Independent Prox+Rem C2B Bank US Regional N/A Bank Debit
driven Marketing Mobile applications/mobile/wallet/
2) Loyalty & Credit Card, Debit
CashClub Wallet (Everi) Independent Data-driven 1) In-Store Rem C2B FinTech US Global N/A http://www.everi.com/payments/ 1991
Marketing Card
Bank Debit, Credit
Transaction-
CashU Independent 1) Payment 3) Bills Rem C2B FinTech Dubai Regional 2.3 Mln users (2016) Card, Debit Card, https://www.cashu.com/ 2002
driven
Cash
Transaction- 2) Loyalty & 2) Online, https://www.chase.com/digital/digital-
Chasepay Independent Prox+Rem P2P+C2B Bank US Regional N/A Bank Debit
driven Marketing Mobile payments/chase-pay
Transaction- 2) Loyalty &
Chillr Independent 3) Bills Prox+Rem P2P+C2B Bank India Regional N/A Bank Debit https://chillr.com/ 2013
driven Marketing

Proximity/
Remote
Dwolla Independent 1) Payment Rem C2B FinTech US Global 3 Bln transactions (2015) Bank Debit https://www.dwolla.com/ 2008
driven Mobile
Transaction- 2) Loyalty & 2) Online, The Bank Debit, Credit https://www.multisafepay.com/
Fastcheckout (Multisafepay) Independent Rem C2B FinTech Regional N/A 2000
driven Marketing Mobile Netherlands Card, Debit Card fastcheckout-payments/
Freecharge (Snapdeal) Independent 3) Bills Prox+Rem P2P+C2B FinTech India Regional 10 Mln users (2016) https://www.freecharge.in/ 2010
2) Payments, Credit Card, Debit
2) Omni-
Google Pay Independent* N/A Loyalty & Prox+Rem P2P+C2B Technology US Global N/A Card, PayPal https://pay.google.com/about/ 2015
channel
Marketing account
https://www.icicibank.com/Personal-
ICICI Pockets Independent Data-driven Prox+Rem P2P+C2B Bank India Global N/A Banking/insta-banking/internet-banking/ 2015
pockets/index.html
Transaction- 2) Online, https://www.sia.eu/en/solutions/cards/
Jiffy Independent 1) Payment Rem P2P+C2B FinTech Italy Regional N/A Bank Debit 2016
driven Mobile mobile-payments-e-commerce/jiffy
Bank Debit, Credit
2) Loyalty & 2) Online,
LevelUp Independent Data-driven Prox+Rem C2B FinTech US Regional 1 Mln users (2016) Card, Debit Card, https://www.thelevelup.com/ 2008
Marketing Mobile
Cash
Transaction- 2) Loyalty & 2) Online, EUR 25 Mln per month Bank Debit, Credit
Lydia Independent Prox+Rem P2P+C2B FinTech France Regional https://lydia-app.com 2013
driven Marketing Mobile (2018) Card, E-wallet
2) Loyalty & 2) Online, Bank/ Bank Debit, Credit
Lyf pay Independent Data-driven Prox+Rem P2P+C2B France Regional N/A https://www.lyf.eu/fr/ 2013
Marketing Mobile Merchant Card
Transaction- 2) Loyalty & 2) Online, Credit Card, Debit
MasterPass Independent Prox+Rem P2P+C2B Bank US Global N/A http://www.masterpass.com 2013
driven Marketing Mobile Card
Bank Debit, Credit
Transaction- https://www.bankmbank.com/Mobile-
mBank Independent 1) Payment 3) Bills Prox+Rem P2P+C2B Bank Poland Regional 854,000 users Card, Debit Card, 1986
driven Banking
E-wallet
2) Online, 138.7 Mln transactions
MercadoPago Independent Data-driven 3) Bills Prox+Rem P2P+C2B Merchant Argentina Regional Credit Card, Cash https://www.mercadopago.com.br/ 2004
Mobile (2016)
Bank Debit, Credit
2) Loyalty &
Mobikwik Independent Data-driven 3) Bills Prox+Rem P2P+C2B FinTech India Regional USD 700 Mln (2015) Card, Debit Card, https://www.mobikwik.com/ 2009
Marketing
Cash
2) Loyalty & Bank Debit, Credit https://mobilepay.dk/da-dk/Pages/
Mobilepay Independent Data-driven 3) Bills Prox+Rem P2P+C2B Bank Denmark Regional >3.5 Mln users (2017) 2013
Marketing Card mobilepay.aspx
Momoe (Shopclues.com) Independent Data-driven Prox C2B FinTech India Regional N/A https://www.momoe.in/ 2014
Marketing Mobile Card
Bank Debit, Credit
Moneta.ru Independent 1) Payment Rem C2B FinTech Russia Regional N/A Card, Debit Card, https://www.moneta.ru 2006
driven Mobile
E-wallet, Cash

Proximity/
Remote
MuchBetter Independent 1) Payment Rem P2P+C2B FinTech Isle of Man Global N/A https://muchbetter.com 2017
Neteller Independent Rem C2B FinTech UK Global N/A https://www.neteller.com/en 1999
OK Independent Data-driven Prox+Rem P2P+C2B FinTech Netherlands Regional N/A https://okit.com/ 2016
2) Loyalty & 2) Online, Credit Card, Debit
Omnyway Independent Data-driven Prox+Rem C2B FinTech US Regional N/A http://www.omnypay.net/ 2014
Bank Debit, Credit
Transaction- 2) Loyalty & 2) Online, https://www.onecard.net/customer/
OneCard (Bandar Utama) Independent Prox+Rem C2B Merchant Saudi Arabia Regional N/A Card, Debit Card, 2004
driven Marketing Mobile index.html?siteLanguage=en
Cash
Oxigen Wallet Independent 3) Bills Prox+Rem P2P+C2B FinTech India Regional 20 Mln users (2017) https://www.oxigenwallet.com 2004
Pay by Bank App (Zapp) Independent 1) Payment Prox+Rem C2B Bank UK Regional N/a Bank Dedit https://paybybankapp.co.uk/ 2013
driven Mobile
Payback (American Express) Independent Data-driven Prox+Rem C2B Bank Germany Regional 29 Mln users https://www.payback.net 2000
Transaction- 2) Loyalty & 2) Online, The Bank Debit, Credit
Payconiq Independent Prox+Rem P2P+C2B Bank Regional N/A https://www.payconiq.com 2015
driven Marketing Mobile Netherlands Card
Paylib Independent 1) Payment Prox+Rem C2B Bank France Regional 40 Mln users https://www.paylib.fr/ 2010
PayPal Independent 3) Bills Prox+Rem P2P+C2B FinTech US Global USD 354 Bln (2016) https://www.paypal.com 1998
PayTM Wallet (PayTM) Independent 3) Bills Prox+Rem P2P+C2B FinTech India Regional 122 Mln users https://paytm.com/ 2010
Transaction- Bank Debit, Credit
PayUMoney Independent 1) Payment 3) Bills Rem P2P+C2B FinTech India Regional USD 6 Bln (2015) https://www.payumoney.com/ 2011
driven Card, Debit Card
Bank Debit, Credit
2) Online,
Payza Specific Data-driven 1) Payment Rem P2P+C2B FinTech UK Global N/A Card, Debit Card, https://www.payza.com/ 2012
Mobile
Cryptocurrency
http://www.hdfcbank.com/personal/
PayZapp (HDFC) Independent Data-driven Rem P2P+C2B Bank India Regional 8 Mln users making-payments/pay-with-payzapp/ 2015
payzapp
2) Loyalty & 2) Online, Bank Debit, Credit https://www.samsung.com/us/
SamsungPay Specific Data-driven Prox+Rem C2B Technology South Korea Global USD 75 Bln (2016) 2015
Marketing Mobile Card, Debit Card samsung-pay/
2) Loyalty & 4) Print, 5.3 Bln transactions
SEQR (Seamless) Independent Data-driven Prox+Rem P2P+C2B FinTech Sweden Global Bank Debit https://www.seqr.com/nl/ 2001
Marketing TV (2016)

Proximity/
Remote
Skrill Wallet Independent Rem P2P+C2B FinTech UK Global 36 Mln users (2016) https://www.skrill.com/ 2001
Starbucks Card Independent Data-driven Prox+Rem C2B Merchant US Global 11 Mln users (2016) https://www.starbucks.com/card
Marketing Mobile Card, Cash
2) Loyalty & Bank Debit, Credit
State Bank Buddy Independent Data-driven 3) Bills Rem P2P+C2B Bank India Regional 10.6 Mln users (2017) https://www.sbi.co.in/buddy/#page1 2014
Marketing Card, Debit Card
Transaction- 2) Loyalty & 2) Online,
Swish Independent Prox+Rem P2P+C2B Bank Sweden Regional 5 Mln users (2016) Bank Debit https://www.getswish.se 2012
driven Marketing Mobile
Transaction- 2) Online, Credit Card, Debit
Vipps Independent 1) Payment Rem P2P+C2B Bank Norway Regional 2,4 Mln users (2017) https://www.vipps.no/ 2015
driven Mobile Card
Transaction- 2) Loyalty & 2) Online, Credit Card, Debit https://usa.visa.com/pay-with-visa/visa-
Visa Checkout Independent Rem C2B Bank US Global > 7 Mln users (2016) 2014
driven Marketing Mobile Card checkout.html
Bank Debit, Credit
Visa Qiwi Wallet (Qiwi) Independent 1) Payment Prox+Rem P2P+C2B Bank Russia Regional 11 Mln users (2015) Card, Debit Card, https://qiwi.com/ 2008
driven Mobile
Cash
2) Loyalty & 2) Online, Credit Card, Debit https://www.walmart.com/cp/walmart-
Walmart Pay Independent Data-driven Prox+Rem C2B Merchant US Regional 20 Mln users (2016)
Marketing Mobile Card pay/3205993
Transaction- Bank Debit, Credit
WebMoney Independent 1) Payment 3) Bills Rem P2P+C2B FinTech Russia Global 31 Mln users (2016) https://www.webmoney.ru/eng/ 1988
driven Card, Debit Card
Transaction- 2) Online, https://pay.weixin.qq.com/index.php/
WeChat Pay Independent 1) Payment Prox+Rem P2P+C2B FinTech China Global 300 Mln users (2016) Bank Debit 2013
driven Mobile public/wechatpay
Transaction- 2) Loyalty & Debit Card, Credit https://www.wellsfargo.com/mobile-
Wells-Fargo Wallet Specific 1) In-store Prox C2B Bank US Regional N/A
driven Marketing Card payments/wells-fargo-wallet/
Bank Debit, Credit
Transaction-
Yandex.Money Independent 1) Payment 3) Bills Prox+Rem P2P+C2B FinTech Russia Global 30 Mln users (2017) Card, Debit card, https://money.yandex.ru/new 2002
driven
Direct Carrier, Cash
2) Loyalty & 2) Online, 1.2 Mln transactions Bank Debit, Credit
Yoyo Wallet Independent Data-driven Prox+Rem C2B FinTech UK Regional http://yoyowallet.com/ 2013
Marketing Mobile (2015) Card, Debit Card
*Google Pay can be used to check out on websites regardless device (iOS as well)

European Payments Council
The interest to accept and develop mobile
(EPC) payments is coming from our increasingly digital
society and the success of mobile devices.
Javier Santamaria, Chair of the European Payments For other mobile proximity payments (i.e. non-NFC
Council, on how the SEPA Instant Credit Transfer scheme based), the lack of standardisation in the usage of
unlocks the potential of mobile payments the various proximity technologies (e.g., QR codes,
BLE etc.) is resulting in a very fragmented approach
How do instant payments drive the development of throughout Europe, and even at domestic level.
mobile payments? What interest do merchants How do you see this fragmentation developing in
have to accept or develop mobile payments and, in the near future?
turn, how could consumers be incentivised to use The European market is currently much less mature with respect
mobile payments instead of cash or card? to the usage of non-NFC based proximity technologies compared
The European Payments Council (EPC) wishes to contribute to the to NFC-based for mobile card payments. To contribute to the
interoperability of mobile payments solutions at a pan-European take-up of mobile SEPA card-based payment, the EPC created
level and to remove any barriers consumers and merchants may last year a dedicated ad-hoc multi-stakeholder group, aiming to
face when making mobile payments. With the EPC’s new scheme, assist to a further integration of SEPA payments in the European
SEPA Instant Credit Transfer (SCT Inst), mobile payments can be digital market, with a special focus on the customer experience.
completed end-to-end in a matter of seconds. In conjunction with The working group developed Mobile Contactless SEPA Card
the increasing number of European citizens that make use of a Payments Interoperability Implementation Guidelines that went
mobile devices for their financial services including payments, through a 3-months public consultation and for which the final
innovative payment methods, such as mobile person-to-person publication is expected in June 2018. These guidelines cover
payment applications that use SCT Inst, are being developed. NFC-based mobile payments including SE and HCE-based
We believe that even more use cases will be based on the new service models. Furthermore, this group is also dedicated to non-
scheme in the future. NFC mobile SEPA card-based proximity payments (MCPPs) in
view of the development of a new white paper in the near future.
The interest to accept and develop mobile payments is coming
from our increasingly digital society and the success of mobile What is the role of EPC in creating standards and
devices. The use of mobile payments is growing and competing guiding the development of mobile payments?
with cash, cheque and plastic card payments because of the The EPC aims to harmonise payments in the SEPA and wishes
speed of check out, convenience for the user and the extensive to achieve the interoperability of mobile payments solutions at
palette of services mobile devices offer, making them an ideal a pan-European level and to remove any barriers consumers
alternative channel for payments. and merchants may face when making and accepting mobile
payments. To contribute to it, the EPC created a White Paper on

For mobile contactless SEPA card payments (i.e. mobile payments, which aims to inform stakeholders including
based on NFC technology), the choice between a payment service providers, mobile network operators and
Secure Element (SE) and a Hosted Card Emulation customers about the EPC’s commitment to an integrated market
(HCE) approach has a major impact on the service for mobile payments in the SEPA. It further endeavours to offer
model and the roles of the different stakeholders. better insight into the potential of the mobile channel to build on
SEPA payment instruments. ➔

European Payments Council
Furthermore, the EPC currently facilitates the setting-up of a
new ad-hoc multi-stakeholder group on Mobile Initiated SEPA

Javier Santamaría
Credit Transfers, including SCT Inst, covering the various sectors Chair
involved in the mobile payment ecosystem to develop Mobile European Payments Council
Initiated SEPA Credit Transfer Interoperability Implementation (EPC)
Guidelines (including SCT Inst), while leveraging the relevant
documentation already developed in standardisation and indu
stry bodies. Through this open approach, payment service provi
ders, technology vendors, retailers, consumers, mobile network About Javier Santamaría: Javier Santamaría is
operators, other service providers, relevant associations and other the Chair of the EPC since June 2012, and has
interested stakeholders will be directly involved in the develop been one of its members since its creation in 2002.
ment of the document. The aim is to cover both customer-to- As an independent, self- employed professional,
business and person-to-person payments. Mr. Santamaría has accumulated broad expertise
in payments across different client segments and
What new technologies will drive development of product lines.
mobile payments in the future?
The EPC does not have a crystal ball to predict the future, but About European Payments Council (EPC): The
the evidence is that innovative payment methods such as mobile European Payments Council (EPC), representing
person-to-person and customer-to-business payments based on payment service providers, supports and promotes
SCT Inst are being progressively developed and adopted in the European payments integration and development,
market. notably the Single Euro Payments Area (SEPA).
In view of the opportunities mobile wallets offer, we believe that www.europeanpaymentscouncil.eu

more added value services will arise in the future, making mobile
payments more attractive for their users.
Share this story

Google Pay Once the merchant confirms PSP readiness,
our API requires less than 100 lines of code and
enables Google Pay on both apps and websites.
The Paypers interviews Mounir Mouawad, Head of For selected banks across Europe, users can also follow a safe
EMEA Product Operations at Google Pay, to understand and easy authentication process to enable their credit or debit card
the benefits of Google Pay for merchants for in-store contactless payments. The user will be authenticated
by their bank’s security system and their payment information will

What consumer payment needs does Google Pay be uniquely encrypted for their mobile device. Once the user is set
address online and in-store? up, tapping their Android smartphone to the store’s contactless
Google Pay gives everyone an opportunity to pay everywhere with terminal is enough to check out.
their Google Account, whether they are shopping at a physical
store, in-app on their Android device, on any website, or across There is a multitude of payment methods available
Google products. We want to make the checkout experience fast, to merchants. What additional value does Google
easy and safe. Pay bring to merchants?
Google Pay offers a set of benefits for both users and merchants.
69% of users today drop out of the checkout process while shop
ping online, and abandon their carts because it takes more than First: added security -- the data of a user’s credit card is neither
120 taps/clicks to finish the process. With Google Pay we can stored on the mobile device nor in the system of the seller. When
enable online checkout in just a few simple clicks. users pay with Google Pay in stores, their transactions are made
using a virtual card number called a token, which is device-
Contactless is quickly becoming the preferred checkout method specific. Such precautions provide an extra layer of security.
in stores across Europe. Furthermore, we also know consumers
and merchants worry about fraud and security when they think Second: improved checkout experience -- Google has billions
about payments. Google Pay brings together the best security of engaged users across several products. For these users,
features from Google, Visa/Mastercard and our partner banks to once they have their forms of payment saved with Google Pay,
provide a secure and fast contactless payment experience with merchants can offer significantly simplified checkout experience
Android phones. in 2-3 clicks. Our partners already report on improvements in
conversion rates, client retention and client acquisition thanks to

What does a consumer need to do to use Google Google Pay.
Pay (iOS/Android)?
To use Google Pay on apps, websites and across Google pro Third: Loyalty and offers -- There’s also an additional benefit for
ducts, you just need to add a debit or credit card to your Google merchants who have loyalty programs and offers/gift cards as
account via the Google Pay app or the Payment centre (payments. Google Pay users can store their loyalty and gift cards. We will
google.com). A “Buy with Google Pay” button can then be found remind users to apply those at the checkout when they are in the
in many apps and websites alongside the conventional payment vicinity of the respective merchants. ➔
methods. Google Pay automatically enters the billing, delivery and
payment data for the user.

Google Pay
How can Google Pay be implemented online and

in-stores? Which PSPs and terminal providers Mounir Mouawad
support Google Pay? Head of EMEA Product
For in-store, all payment terminals that accept contactless can Operations
accept Google Pay so no additional implementation or work is Google Pay
required from the merchants, beyond simply enabling contactless
payments at their stores and educating their staff on how those
work. To make online possible, the merchant just needs to make
sure their payment service provider (PSP) already supports About Mounir Mouawad: Mounir Mouawad
Google Pay. Once the merchant confirms PSP readiness, our easy heads up product strategy and operations for
to integrate API requires less than 100 lines of code and enables Google Pay in Europe, the Middle East and Africa.
Google Pay on both apps and websites. Prior to that he worked across a variety of roles in
e-commerce, supporting some of Google’s largest
Google doesn’t charge merchants or PSPs anything for offering e-commerce clients in Europe. Mounir holds a
Google Pay as a payment option. Similarly, users are not charged computer engineering degree from the American
anything for using Google Pay either in-store or online. University of Beirut and an MBA from London
Business School.
Which countries are already using Google Pay?
Where will you be launching next? About Google Pay: Google Pay is the fast, simple
The Google Pay in-store experience is currently available in way to pay in millions of places – online, in stores,
19 countries globally including Canada, Brazil, Japan, Russia, and more. It brings together everything you need
Spain, the UK, and Germany with more to come. Google Pay, at checkout and keeps your information safe
implemented at supported online merchants and across Google and secure. Plus, you can manage your account
products, is already available worldwide today. wherever you want – on the web or in the app.
Could you elaborate a bit on future developments www.pay.google.com/about

and services added, such as voice commerce?
We’re excited about the future of Google Pay and the opportunities
it can offer. We’re already working on a number of interesting areas
such as expanding our support for public transport, or allowing
users to save their concert or event tickets into Google Pay. We’re
also working closely with our partner banks to bring innovation
to the industry, like allowing newly created cards to be added
to Google Pay instantly without waiting for the physical card to
arrive via post, or exploring opportunities of integrating payment
experiences into the Google Assistant. Share this story

Gerson Lehrman Group (GLG)
The War of E-Wallets in India
India is and will continue to be a fascinating market for a lot of people registered on it. This has certainly helped customers to
financial and payments professionals. Having spent just under a be onboarded in a much shorter timeframe.
year living and working there, I can certainly see why this is the
case and why opportunities are still ripe. However, there is still a debate as to whether it has improved
processing times and whether it is an efficient and inclusive tool.
Cash has dominated the market for a long time, be it for trans As of the 1st of March 2018, all e-wallets now require full KYC,
actions, employee salaries, and even for online shopping via the meaning that consumers will have to link their Aadhaar number
‘cash on delivery’ as a payment option. However, the e-wallet to their mobile wallet.
market, in its current state, has seen a decline.
In my experience, KYC has proven to be a challenge across
Factors that affect adoption regions in South Asia and the Asia Pacific because the processes
The main driver for the surge within the e-wallet market in India involved have been long and tedious. As a customer, you would
to date has been the demonetisation exercise in November 2016. be required to make an appointment and meet an official face-
to-face, in addition to providing an extensive list of documents.
As a result of the demonetisation, the government removed from
circulation both the 500 and 1,000 rupee banknotes, with the A high percentage of the target audience for e-wallet providers
issuance of new 500 and 2,000 banknotes. The rationale was is the so-called ‘unbanked’ population: people who are not
in part to deal with the amount of black money in the country, registered with any form of account and, therefore, cannot provide
but also to try to drive and promote the use of digital services/ any means of KYC. This is especially common in rural parts of
payments. India outside of the major towns and cities.
The government has been on a mission to foster financial inclu Something for nothing
sion and promote transparency across the country. In addition, Creating e-wallet products has certainly been expansive in India
government policies such as Pre Paid Instruments (PPI), the over the years, but adoption, as mentioned earlier, remains a
introduction of e-wallet interoperability and Universal Payment headache for some. The Indian market is no different from others,
Interface (UPI) by the NPCI have further helped stimulate the market. and incentives are an extremely important consideration. Indian
consumers will only see the value in an e-wallet product if the
Adoption of e-wallet products remains a challenge for the Indian incentives match their needs.
market, largely driven by competition from credit/debit cards.
Ecosystems remain undeveloped in rural areas, especially as The majority of these now include the ability to top-up mobile
some merchants have yet to adopt crucial contactless point-of- phone credit, pay for utility bills, book holidays, buy tickets for
sale terminals. A lack of knowledge or trust from the masses is entertainment or travel, and secure loans and generous cashback
also proving to be a hindrance. offers. They have also focused strongly on the onboarding and
user experience, insomuch that banks are now using these as a
Onboarding challenges benchmark to shape/update their own offerings. ➔
One of the biggest barriers to successful adoption of financial
services in developing payments markets is KYC, or Know Your
Customer. One of India’s biggest achievements has been the
introduction of Aadhaar, a biometric database with over a billion

Gerson Lehrman Group (GLG)
New kids on the block

In addition to some of the major heavyweights in the e-wallet space,
Kunal Patel
the likes of Paytm (as mentioned earlier), Oxigen, Mobikwik, PayU Council Member
Money, Freecharge, PayPal, Vodafone m-pesa, Airtel Money and Gerson Lehrman Group (GLG)
the local bank e-wallets dominate the market.
However, apart from local players, Google and Amazon are also
trying to tap into the growing and very profitable Indian market.
Google launched its own payment platform called Tez, which About Kunal Patel: Kunal has over 10 years’
allows users to link their existing bank accounts with the app to experience in product development, innovation
pay for services, either in an online or offline environment. and strategy across corporate organisations and
fintech start-ups. These include banks, payment
The key to their success is not to focus on frictionless payments acquirers, and mobile financial services, spanning
but on the additional value that a user would get from using the Asia Pacific, South Asia, Europe, Central and
service. I had previously stated other built-in features and capa Latin America.
bilities focused on m-commerce and value-added services: Paytm
and Airtel are two examples of e-wallets who have recently moved About Gerson Lehrman Group (GLG): GLG
into banking services. (Gerson Lehrman Group, Inc.) is the world’s leading
platform for professional learning. Business lea
The future and beyond ders, investors, consultants, social entrepreneurs,
I believe we will see a consolidation of the market, but this is a double- and other top professionals rely on GLG to learn
edged sword. It is true that intense competition forces companies in short- and long-term engagem ents from a
to continually innovate, drive down costs and gives consumers membership of more than 600,000 experts.
more choice, but it can also lead to confusion amongst the users.
www.glg.it
Who will win the war of the e-wallets? The current environment,
which is dominated by diversification and fragmentation, is already
setting the stage for a possible winner. In short, those who adopt
a collaborative approach, respond to ever-changing market
demands, make use of emerging technologies and understand
consumer behaviour will have the most to gain. It may seem as a
long list, but checking all those points is essential for bringing to
market a product that consumers need, want and will use.
Share this story

Kapronasia
When a Mobile Wallet Is More Than Just a Wallet
Launched in 2004, Alipay was initially an online payment system There was a special set of circumstances and developments in
designed to solve the issue of trust in ecommerce transactions. China that helped these payment platforms develop into the
By providing a method of escrow, Alipay digitised the traditional lifestyle platforms that they are today, but it is surprising that we
cash ecommerce transaction process that was prone to fraud. have not seen similar products and services in other markets,
Since then, Alipay has become much more than just a platform especially in the US. Arguably, Paypal is one of the best-
for ecommerce payments. The system now processes millions of position ed payments companies globally to provide similar
virtual and physical payments daily, becoming one of the ‘mega- functionality but ended up acquiring Venmo, an app that under
apps’ in China, used by hundreds of millions of consumers on a stood social payments perhaps even better than Tencent.
regular basis.
Regulations in many jurisdictions may be part of the reason why
It is considered a mega-app not just because of how many pay growth has been limited. In China, the government took a very
ments it processes, but due to the many other ancillary services much ‘wait and see’ approach to fintech regulation by letting
that it supports. In many ways, payment processes helped to fintech companies grow and regulating them after they became
provide the initial platform on which a variety of other products a potential risk. An example is mobile payments themselves.
and services have been built. From within the Alipay wallet today, Although Alipay was setup in 2004, the government only formally
you can book a car, buy movie or plane tickets, invest in wealth licensed payment platforms in 2011 and then implemented
management products, or even buy insurance. regulations in 2016. This allowed payment platforms like WeChat
Pay and Alipay to grow and compete.
The other dominant lifestyle platform is Tencent’s WeChat, which
offers a similar variety of products and services. Tencent leve Using Europe’s GDPR as a counter-example, although GDPR
raged the social and entertainment aspects of the WeChat chat would likely not affect the underlying payments functionality of
app to develop a payment business that is just about neck and any of these platforms, the business model for lifestyle platforms
neck with Alipay in China at the moment. like Alipay and Tencent is shifting away from fees towards value-
added products and services. When the WeChat wallet knows
The two companies offer contrasting approaches to the same that you have gone to see the latest documentary movie and
conclusion: Alipay used its initial footprint and lead in ecommerce have a penchant for fine Italian food, it might make the decision
to create a multi-faceted lifestyle platform while WeChat leve that you are a reliable borrower and offer to lend you money.
raged its heritage in social and gaming to capture market share. It accomplishes this through data-sharing on the back-end that
looks at the potentially hundreds of daily interactions you have
This transition from a payments platform to a lifestyle platform is with the WeChat wallet on a regular basis. This would be nearly
something that is nearly unique to China. In the United States, if impossible in a GDPR-Europe. ➔
you wanted to use ride sharing, you would open your Uber app.
If you wanted to pay a friend, you would open Venmo or Paypal.
In China, if you wanted to do any of those things, you would just
open WeChat.

kapron
Kapronasia ASIA
Beyond regulation, the most significant hindrance may be
consumer habits. For consumers accustomed to using a different

Zennon Kapron
app for every task, the idea of having ‘one app to rule them all’ Director
may seem a bit foreign, whereas in China, it is very natural due Kapronasia
to the fact that smartphone is the device of choice. Furthermore,
existing payment methods in China had a tremendous amount of
friction. A card transaction in most stores in China involves chip-
pin-signature, which is much slower than a QR-code payment,
which has become the norm. Places like Europe and Australia About Zennon Kapron: Zennon Kapron is a
have very user-friendly and frictionless tap-and-go payments that Director at Kapronasia and has been involved
are just as convenient as mobile. in financial technology for over 20 years. Before
Kapronasia, Zennon was the Global Banking
That is not to say that hope is lost for similar apps ex-China. We are Industry Manager for Intel and the CIO for Citigroup
now starting to see WhatsApp and Facebook roll out payments Portugal. He holds a B.S. in Computer Science from
within their apps. Clearly, Amazon has designs for increasing its Syracuse University and an MBA from INSEAD.
financial footprint, but it will be a long time before we see any of
them reach the scope of functionality in a WeChat or Alipay wallet. About Kapronasia: Kapronasia is a leading
independent research and consulting company
Although we have not seen these offerings from local domestic focused on the Asian financial services industry.
players in the United States and Europe, we may see them soon We help financial institutions, technology vendors,
from Alipay and WeChat as the two players start to expand consultancies and private equity companies
aggressively abroad. From the streets of Paris to the beaches of understand the impact of business, technology,
Thailand, millions of merchants around the world accept Alipay or and regulatory issues in banking, payments,
WeChat Pay and an increasingly large number of countries, like insurance and capital markets.
HK, have local-currency Alipay and WeChat Pay wallets.
www.kapronasia.com
For years, western companies have come to China and misjudged
the habits of Chinese consumers and failed. The question is now,
will Chinese companies make the same mistakes in the opposite
direction as they bring their ‘lifestyle’ digital wallets to an entirely
new set of consumers?
Share this story

The rise of ecommerce changed the way consumers interact with merchants. Consumers can now engage with stores
at their convenience and are in complete control of the shopping experience. If something is not to their liking, they are
just a few clicks away from another store that may offer better-priced products and a seamless shopping experience with
familiar and easy-to-use payment methods.
‘In every case, at every store, the merchant was in complete control of the process. The customer was guided by the
merchant through merchandising, messaging, or a combination of the two, seeing what the merchant wanted him/her to
see and in the context that the merchant deemed optimised sales’ writes Thad Peterson, Senior Analyst at Aite Group, as
he goes on explaining how the first pioneers of ecommerce radically changed this situation.
Nowadays, customers can shop at their convenience from anywhere at any hour and on any device. Ecommerce redefined
and enhanced the customer experience and payments providers had to adapt payment methods to meet new demands
for simplicity and seamlessness. In commerce, payments are gradually becoming ‘invisible’, in an attempt to make the
checkout process as fast and as simple as possible. One-click buy buttons, which reduced the checkout process to a
single click, are now common. Anything easier than that would mean telling your mobile phone to do the shopping and
payment for you.
Voice is emerging as an important commerce channel and the recent string of investments that big tech companies like
Google and Amazon have made in enhancing their “smart assistants” shows that voice commerce has the potential to,
once again, redefine commerce. According to That Peterson, before voice commerce can become mainstream, voice
authentication has to be resolved. If this essential challenge is resolved, then “Voice authentication (…) could be seen as
a pre-curser to universal, frictionless commerce through any medium or device. “
We are not only communicating with devices, but devices can also communicate among themselves. Connected devices
or the Internet of Things is making big strides into online and physical commerce. An appliance connected to the IoT could
take care of its own restacking with the products it needs to function. We can already see this happening with printers
that order their own ink and Samsung, LG, and others have already experimented with fridges that allow consumers to
order groceries online. Apart from enabling appliances to restack with essentials, IoT devices could add a new level of
convenience to delivery. Both Amazon and Walmart have piloted in-home delivery, the former even releasing a smart-lock
device called Amazon Key, which allows users who are not at home to unlock their door for an online delivery.
The growth of connected devices will pose new challenges to ecommerce marketers, but an integration with IoT devices
built around purchasing and re-purchasing can have important benefits. As Markus Bergthaler, MRC Director of Programs
and Marketing, explains: “General ecommerce marketers are going to need to tailor their marketing for the IoT, but other
companies are going to be able to revamp their supply chain and logistics around it. For marketers who have items that
need to be repurchased (or who are developing smart items), an integration with the IoT can dramatically improve sales
with a limited amount of overhead. Smart appliances can be designed around the idea of purchasing and repurchasing
items, making it easier for businesses to recapture and re-target their core audience.”
54 PAYMENT METHODS REPORT 2018 • Innovations in the Way We Pay

Aite Group
“Alexa, Buy Me Stuff!” – Amazon and the Payments Space
The evolution of commerce Things changed in 1984 when the first online service provider,
Until the 1980’s, there were only three ways that consumers CompuServe, launched the CompuServe electronic mall,
could engage in commerce with a merchant: in the store, on the enabling online commerce for the first time.
phone, or with a catalog through the mail. This model has been
around for over a century, and merchants have fine-tuned their With this, the world of commerce changed forever. Suddenly,
capabilities to optimise sales through these channels with a customers were given the ability to explore offerings in their own
good deal of success. Retail became the engine of the economy, way whenever and wherever they chose if they could get to a
providing consumers with previously unimagined choice and connected computer.
value in nearly every segment, from fashion to lumber. Even with
the proliferation of choice, the fundamentals of commerce remained Quoting from the ad, “… it gives you in-depth information on thou
essentially unchanged: sands of goods and services, and lets you buy even hard-to-find
1. The merchant displayed the merchandise in an appealing way merchandise.”
to attract the customer.
2. The customer visited the merchant’s store (or catalog) to shop The emergence of ecommerce exposed consumers to a global
for the goods she needed. marketplace of products and services, but while the variety of
3. The merchant offered the goods at a price, and the consumer offerings increased by a quantum, the process of purchasing was
decided whether to purchase the goods. more cumbersome than an in-store purchase. In the early days
of ecommerce, card entry was done for every purchase and at
In every case, at every store, the merchant was in complete control very low levels of bandwidth, so the transaction process was very
of the process. The customer was guided by the merchant through slow. A new category of payment processors, payment gateways,
merchandising, messaging, or a combination of the two, seeing emerged to address this issue, and, over time, the concept of
what the merchant wanted him/her to see and in the context that card-on-file emerged to reduce friction at individual sites.
the merchant deemed optimised sales. That is still the case today
with in-store and catalog sales. In 1994, ten years after the emergence of ecommerce, Amazon.com
was launched. Since Amazon was launched at about the same
1984 CompuServe Mall Ad time that browser based internet functionality started to explode,
their growth was rapid, and, before long, Amazon was selling more
things than books. Since then, it has become the largest online
retailer in the world, with over 300 million customers globally. A
key to their explosive growth has been their ongoing efforts to
minimise the friction involved in an online transaction. While card-
on-file was a good start, it still required additional log-on and
verification steps that slowed the transaction and increased the
likelihood that the customer would decide against the purchase.
In 1997, Amazon launched 1-Click, an automated form of card-
on-file that literally reduced the payment to one single click of a
mouse. 1-Click not only revolutionised ecommerce and gave
Amazon.com a competitive advantage, but it also launched them

Source: Ars Technica into the payments space. ➔

Aite Group
As Amazon began to add outside merchants to their marketplace,
they created an opportunity to expand their payment capabilities

Thad Peterson
to new merchants and markets. 1-Click became available to those Senior analyst
merchants in the form of Amazon Pay, the platform continuing Aite Group
to expand. While there is dissonance with some merchants who
fear that Amazon will take their data and possibly their customers,
Amazon Pay is becoming a new tender type in competition with
PayPal and the payment networks, and many merchants will be
willing to take that risk in order to gain an incremental sale. About Thad Peterson: Thad Peterson is a senior
analyst with Aite Group, focusing on the evolution of
With the emergence of the voice user interface embedded in the payment space, the customer payment expe
Amazon’s Echo line of devices, a new payments challenge emerged. rience, and merchant acquiring. Thad has a proven
Voice interaction is terrific for information and entertainment track record of identifying and developing new
delivery, but many of the protections built into an online transaction opportunities and technologies in payments and
done on a computer or smart phone are not available. And while financial services. He has relevant expertise in
it’s pretty easy to ask Alexa - the avatar of Amazon Echo - to buy applying customer behaviour to the payments
something, there is no way for Alexa or Amazon to be sure that ecosystem in both corporate and startup environ
the person ordering is the individual who owns or controls the ments. Thad’s consulting background includes
relationship. Transaction information can be sent to the customer engagements on credit and debit cards, mobile
immediately after the purchase is made, but that adds friction to payments, airline payment platforms, consumer
what was a nearly frictionless transaction online. and merchant loyalty, payment technology evolu
tion, stored value, and product innovation.
What is needed is a way for each individual consumer to be
identified in a voice interaction with Amazon Echo. If the individual About Aite Group: Aite Group is an independent
is recognised, then the device can enable a variety of different research and advisory firm focused on business,
transactions and access a wealth of high-value information to technology, and regulatory issues and their impact
enhance the experience. It would enable voice purchase from any on the financial services industry. Headquartered
organisation that offers Amazon Pay as a payment alternative, in Boston, Aite Group works with its clients as a
and, once again, it creates a significant competitive barrier and partner, advisor, and catalyst, challenging their
differentiator for Amazon.com. Voice authentication is not here yet, basic assumptions and ensuring they remain at
but it is close, and, when it arrives, the revolution that happened the forefront of industry trends
in 1997 with the launch of 1-Click could be seen as a precursor to
universal, frictionless commerce through any medium or device. www.aitegroup.com
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Amazon Pay
Voice Is the New Frontier in Commerce
Imagine purchasing a train ticket, a flower bouquet, or your Conversely, companies that fail to adapt will possibly suffer both
groceries – simply by asking your voice assistant. No need to short-term and long-term consequences. Interestingly, 73%
pull out your wallet. No need to enter any credit card or address of customers are likely to switch brands if the experience
information. You just tell your voice assistant to place an order is poor. And in 2017 alone, lack of personalisation and low
and, voilà, it’s done. The ability to do that is already here, and it’s consumer trust cost businesses a whopping GBP 571 billion.
poised to change the face of commerce.
The most intuitive medium yet

As businesses look for the latest trends and developments, voice Voice represents a new opportunity for consumers and brands
represents the next major wave in commerce, and the reason for alike to redefine the way people research and purchase products.
this is simple: as our lives become increasingly digital, customers There’s no need to use a computer or learn a device. All that’s
have come to expect a seamless experience – and voice offers an required is human speech. Indeed, voice is “the first medium
ultra-intuitive way to purchase goods and services. that does not require the user to learn a new way of doing
things”.
A new set of expectations
Today, our digital world is rapidly evolving, and consumer With the rapid adoption of voice for multiple retail scenarios,
expectations are rising along with it. Digital technology is commerce is moving to the next frontier – and Amazon Pay is
already pervasive, powerful, and growing – and it’s increasingly helping businesses adapt to the expectations of today’s connected
guiding how we shop. In Europe, digital assets are expected shoppers. Amazon Pay extends to thousands of websites around
to influence 54% of all European retail sales by 2021 , the world the experience that Amazon customers have come to
according to Forrester Research. enjoy and trust on Amazon websites. The alternative payment
solution makes it easy for hundreds of millions of shoppers to
As more people embrace digital technology for their purchases, make purchases online with the information already stored in
their expectations are increasing. Consumers expect today’s com their Amazon account. Our premise is to help people discover
panies to be accessible all the time, wherever they are. They expect whatever they love, wherever they find it, by making Amazon
the engagement to be customised – with more selection and innovations available to third-party merchants. To accomplish
value. And they expect consistency and convenience. Moreover, that, we recently released Amazon Pay for Alexa Skills in the US,
trust is becoming increasingly paramount. Today, 90% of with future availability in the EU, allowing merchants to sell goods
shoppers in Germany, the UK, France and Italy say trust is the and services using Alexa’s simple voice purchasing flow.
most important factor in determining their purchasing

decisions. With Amazon Pay for Alexa Skills, shoppers don’t need to leave the
voice experience to enter payment information like credit card details
Customers are clear about what they expect. Now, it’s up to us or a shipping address when making a purchase. Instead, Amazon Pay
to adapt. Those who will be able to deliver innovative customer brings the trust and simplicity of Amazon’s checkout experience
experiences will most likely reap the rewards. As Forrester to the merchant’s voice shopping experience. The result is a seam
Research concluded, customer experience is a company’s less and convenient checkout experience. ➔
greatest potential source of competitive advantage.

Amazon Pay
An ultra-convenient purchasing experience

Forward-looking companies are already implementing Amazon
Karen Pepper
Pay for Alexa Skills, by applying this innovation in their industry Head of the UK & Ireland
to offer simple voice purchasing. For example, 1800 Flowers, Amazon Pay
a US based company, is seeing a positive impact from this
seamless purchase experience. After adding Amazon Pay for
Alexa Skills, this floral and gourmet retailer increased the number
of new and repeat customers who place orders through their
Alexa skill. A b o u t K a re n P e p p e r : K a re n P e p p e r i s
responsible for leading Amazon’s payment
Likewise, Virgin Trains in the UK recently became the first travel services for third party merchants in the UK. A
company to offer ticket purchases through Alexa, making it 15-year veteran of the payments and startup
convenient for its customers to buy train tickets. As Giulio industries, Karen was most recently named
Montemagno, Director of Amazon Pay EU, put it when Virgin Global Head of Alliance Banks at JP Morgan and
Trains was launched back in May 2018: “This is a first-of-a- previously held executive positions at American
kind service that will make it easier than ever to find and Express, as well as at her own multi-million pound
book the ticket you want, even when you’re busy doing startup in the health and fitness sector.
something else—all you need to do is ask Alexa.”
About Amazon Pay: Amazon Pay makes it easy
As voice commerce moves to the mainstage, some of the most for millions of Amazon customers to login and
innovative brands are already identifying the right payment pay on third party websites using the payment
solutions for their customers. By embracing voice commerce and shipping information stored in their Amazon
and integrating a payment solution like Amazon Pay, today’s accounts. Amazon Pay can help merchants add
merchants can take customer convenience to the next level, new customers, increase sales and turn casual
exceeding customer expectations in an age where personalised, browsers into buyers. It’s fast, easy, and trusted
seamless experiences are what makes the difference. – leverage the Amazon brand to grow your
business.
To learn more, visit our Amazon Pay for Alexa Skills webpage.
www.pay.amazon.com/uk
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Innovation in the Way We Pay - IoT and Payments
From smartphones to refrigerators, the Internet of Things is If an ecommerce retailer isn’t appearing on the “shopping”
steadily becoming more advanced and user-friendly. Consumers page of Google, for instance, it’s likely not showing up when a
have developed a level of trust with IoT payment processing and consumer tries to purchase an item through Google Home.
are more readily purchasing items through a variety of devices
within their homes. Ecommerce businesses will need to capitalise Likewise, ecommerce marketers need to be aware of the fact
upon this trend if they are going to continue expanding their that the Internet of Things is making it easier for customers to do
own reach, as customers are swiftly normalising the process of a comparison search. Customers who are purchasing on-the-fly
purchasing items via new and unconventional means. aren’t looking into warranty information, product guarantees or
product details. They’re looking at the general description of the
From “Hey, Google” to the Amazon Dash item and its cost. Due to this, soft selling measures may become
Secure payments are available through a number of devices, less important than the bottom line: customers want the product
mostly operated by trusted payment processors. Google that costs the least, delivered the quickest and produced by the
Payments, PayPal and Amazon Pay are all connected to at-home most reputable vendor.
smart devices, such as the Amazon Echo and the Google Home.
Shoppers can verbally order products while moving throughout
their house, making the purchase experience easier and more cost
effective as they can quickly compare pricing and brand quality.
Consumer-based items such as Amazon Dash, an ordering service
consisting of multiple components including buttons, a Wi-Fi
connected barcode scanner and voice command, make it easier
for products to be purchased on-the-go. Additionally, single-use
devices such as coffee machines that can automatically reorder
pods or printers that can reorder ink, are increasing in popularity.
Throughout all of this is a framework that is developed to be user- Creating Logistics and Shipping for the IoT
friendly, making it easier for customers to commit to purchases, General ecommerce marketers are going to need to tailor their
and consequently making it easier for vendors to sell their goods. marketing for the IoT, but other companies are going to be able
At the same time, this kind of marketing automation is primarily to revamp their supply chain and logistics around it. For marke
benefiting larger marketplaces, as they are the ones able to ters who have items that need to be repurchased (or who are
leverage themselves into customer homes. developing smart items), an integration with the IoT can dramatically
improve sales with a limited amount of overhead. Smart applian
Tailoring ecommerce to the Internet of Things ces can be designed around the idea of purchasing and repur
Ecommerce marketers need to understand and strategise around chasing items, making it easier for businesses to recapture and
the way the Internet of Things is being utilized. Customers are re-target their core audience. Organizations can fine-tune and
more frequently searching for items by voice command, and automate many of the processes that are directly related to sales
in many cases, they are looking for the items that are going and automation, therefore cutting down on staff, improving their
to cost the least. Ecommerce portals need to be particularly operational expenses and expanding their overall reach. ➔
conscientious about their search engine optimization strategy.

Retail Spending and Brick and Mortar

It isn’t just ecommerce stores that need to adjust. Retail stores
Markus Bergthaler
are also going to need to begin offering alternative methods of MRC Director of Programs
payment. Already, many consumers are seeking to make purchses and Marketing
directly through their phones. In the future, smart wristbands and Merchant Risk Council
other wearables may also become major methods of purchasing.
This type of shift is extraordinarily convenient for customers, but
there are problems with adoption. Merchants are often hesitant to
adopt different means of spending until it has become standard About Markus Bergthaler: Markus oversees
even if it has a clear edge. This is what has made it difficult for the development of all Association program and
chip-and-PIN transactions to become popular throughout the marketing content including strategy, conference
United States. education, subject matter, website content, bench
marking and online forum topics. Markus joined
Merchants have to be more willing to adopt new transaction the MRC from Wizards of the Coast where he led
methods while also securing them. This may require additional the company’s fraud department.
training for staff and continued learning for retail business
owners who want to remain knowledgeable about upcoming About Merchant Risk Council: The Merchant
tech. Though investing in new payment technologies carries an Risk Council is the leading global trade association
upfront cost, this cost can be mitigated by the additional reach for fraud and payments professionals. The MRC
the merchant can have. Often, these new payment technologies provides support and education to members with
will have a list of supporting merchants for their users. proprietary benchmarking reports, whitepapers,
presentations and webinars. The MRC hosts four
Retail spending through the Internet of Things is expected annual conferences in the US and Europe, as well
to reach USD 2.5 billion by the year 2020. This trend is gro as regional networking meetings for professionals
wing exponentially and cannot be ignored by retailers. Vendors to connect, exchange best practices and share
need to move forward in optimizing their products and their emerging trends. #ProudlyACommunity
campaign strategies for IoT purchasing, as well as looking throug
hout their existing processes for areas of potential improvement. www.merchantriskcouncil.org

Meanwhile, product manufacturers will need to look to IoT to
improve their marketing and supply chain management. Companies
that innovate and adapt quickly to this market have a far better
chance of surpassing their competitors.
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Payment Methods Basics and
Overview of How People Pay
in Different Markets
Essential Trends to Watch

Payment Methods Explained
Introduction
In order to offer a comprehensive overview of the subject matter, we found it impetuous to take a closer look at the various
types of payment instruments and methods. We will start with a short introduction presenting the terminology and the
difference between a payment method and a payment instrument, and then there will be an in-depth presentation of all the
payment methods. The various payment methods will then be mapped and presented by region in an infographic, with a
focus on Europe, the US, Asia, and LATAM.
Online payment methods refer to the entire set of means through which shoppers can pay for their purchases over the
Internet. An online payment method is presented at the checkout or on the merchant’s payment page, and should have
a clear recognition by the shopper through means of a well-known logo (e.g. Mastercard, PayPal, iDEAL) or common all-
purpose words like ‘credit cards’, ‘bank transfer’ or ‘payment-on-delivery’. Alternative payment methods refer to online
payment methods that are used as an alternative to credit card payments.
Online payment methods rely on six payment instruments:
• Card payments;
• Bank transfer payments;
• Direct debit payments;
• Cash payments;
• Cryptocurrency payments;
• Direct carrier payments.
Normally, online payment methods refer to online payment method brands (Mastercard, Bitcoin, Boleto, Bancontact),
online payment solution brands (e.g. Klarna, PayPal, Masterpass) or directly to one of the payment instruments (e.g. ‘bank
transfer’). In this report, we draw a clear line between the six payment instruments, the actual tools for a transaction, and
payment methods, the ways in which these tools are put to use.
Each of the six payment instruments has its own local, regional, global or vertical payment ecosystem. Ecosystems are
represented by a specific payment scheme which can be described as the institution that sets the governing rules and
technical standards for the execution of payment transactions using one of the underlying payment instruments.
As mentioned before, online payment methods refer to the ways shoppers can pay for their purchases over the Internet.
There is an endless number of payment methods to match all contexts (pay in advance, pay afterwards, and payment and
delivery at the same time).
We have identified ten different payment categories. A payment method can stand in a one-to-one relationship with an
instrument, as with credit cards, but it can also incorporate several payment instruments in one method, as with e-wallets
(can be topped up by debit/credit card or Online Banking e-Payments).
63 PAYMENT METHODS REPORT 2018 • Payment Methods Basics and Overview of How People Pay in Different Markets
The ten categories discerned from one another are:
1. Credit card 6. Direct debit
2. Debit card 7. Invoice – Payment after delivery – Instalments
3. Prepaid card 8. Cash (cash-on-delivery and kiosk payments)
4. E-wallet 9. Direct carrier billing
5. Online Banking 10. Cryptocurrency
Payment Method Categories Explained

Below, we will elaborate on the ten payment method categories consisting of both card-based payment methods and
alternative payment methods.
Credit card
General description Credit cards are issued to cardholders, after which a revolving account is
created by the issuer, granting a line of credit to the cardholder. The cardholder
can then borrow money for payment to a merchant. For credit cards, we
distinguish two different types of schemes: the three-corner model (closed and
exclusive scheme, e.g. AMEX, Diners Club, Discover) and the four-corner model
(open and inclusive scheme, e.g. Mastercard, Visa, UnionPay, RuPay).
Payment instrument Credit card
Payment guarantee When it comes to fraud and chargebacks, credit cards offer the highest
protection. At most, a cardholder is only liable for USD 50 of an unauthorised
transaction. Some issuers provide zero liability cards, meaning the cardholder
will be reimbursed for the full amount of the fraudulent charge.
With credit card transactions, the consumer’s cash reserves are not affected.
While the available credit for the card may drop temporarily after the fraudulent
purchase is made, the cardholder is not affected much by the unauthorised
purchase.
Chargeback can be used in cases of goods not arriving at all, goods that are
damaged, goods that are different from the description, or where the merchant
has ceased trading. There is a time limit on chargeback claims – typically 120
days. The time at which this period of 120 days starts depends on the specific
circumstances, but will usually be from the day the consumer becomes aware
of a problem. Additionally, once a chargeback has been filed, a refund should
be credited to the account immediately.
Credit card
Brands Mastercard, Visa, JCB, Discover & Diners Club, American Express, China
UnionPay, RuPay, Chase
Market reach Credit cards are widely used internationally, and enjoy a status of being widely
accepted as the common payment method for ecommerce and POS. However,
in Asia, only 41% of online transactions are completed with a credit card. In some
European countries (the Netherlands, Germany, Poland) alternative payment
methods (online banking e-payments, invoice) are the dominant payment
methods for ecommerce.
Debit card
General description On top of the cards for offline payments, debit cards are also used increasingly
online, as well. Functioning almost the same way as a credit card, but without
several risks of debt, the debit card has become popular in countries that drifted
away from credit payments (Russia, Mexico) but have no or little accessible
online banking options. In several countries where online banking has rapidly
developed and increased in popularity (e.g. Germany and the Netherlands),
debit cards are virtually no longer used online.
Payment instrument Debit cards are directly linked to the checking account of the buyer.
Payment guarantee Credit cards have a maximum fraud liability of USD 50. With debit cards, that
liability cap only lasts for two days. If consumers do not immediately report a
lost or stolen card that has been compromised, the fraud protection decreases
significantly. After two days, the liability jumps to USD 500. If consumers let
two billing cycles pass, they would not be reimbursed for any of the fraudulent
purchases.
Additionally, the effects of fraud are felt immediately. A criminal has the ability
to completely drain the consumer’s bank account before the unauthorised
purchases are detected. The law allows banks to take 10 days to review the
claim before issuing refunds. While some banks refund the cash much sooner,
cardholders usually feel the effects of such a limited access to necessary funds.
Brands Visa Debit, Debit Mastercard, Maestro, Dankort (DK), V PAY card, PostFinance
Card, Interac debit cards
Market reach In the US, credit cards are the dominant payment method for ecommerce, credit
card market showing significant innovation. Rewards programmes of all kinds
proliferate, and new digital account servicing tools help consumers manage
purchases, debt, and account security in the country, but also globally. In
Canada, debit cards (Interac debit) are more popular. In Europe, online banking
e-payment methods are more widely used.
Prepaid
General description Some prepaid cards run on scheme networks such as Visa and Mastercard.
These cards can be used to make purchases or withdraw cash in the same way
as a debit or credit card. The key difference is that they need to be loaded up
with cash in advance – the balance then operates as the spending limit.
Another type of prepaid cards, for example paysafecard, is the type of card
or voucher consumers need to buy before starting a transaction. These cards
are not usually run on scheme networks (such as Visa and Mastercard) and are
usually authorised immediately.
Most prepaid products have a funding limit and some do not allow multiple
cards/vouchers to fund one single transaction.
Payment instrument Cash, debit, or credit card
Payment guarantee Payments cannot be reversed by the buyer.
Brands paysafecard, NeoSurf, Cashu, Kaiku, Mango Money
Market reach Prepaid cards, with their relative safety for consumers and ease-of-access,
make them a popular payment method for consumers in BRIC countries and
underage consumers without access to a credit card. The prepaid card sector
continues to grow globally by capitalising on the needs of the unbanked or
underbanked people in emerging countries.
E-wallet
General description An e-wallet is a digital tool (software or app) for consumers to store their payment
methods. It stores credentials of e.g. debit, credit cards and alternative payment
methods. Some e-wallets can also store loyalty programmes. An e-wallet allows
an individual to make electronic transactions with an improved checkout and
payment experience compared to keying in all payment credentials every time a
purchase is done. Wallets can function both in online and physical stores.
Other remarks:
• e -wallet providers can also be payment method providers, e.g. Visa and
Mastercard;
• e-wallet providers can also be independent, e.g. Seamless/SEQR, YoYo, OK
The term ‘wallet’ is also often used in the situation of a stored-value account for
which a license is required (e.g. e-money).
Payment instrument Multiple payment methods can be used, depending on the e-wallet provider:
credit card, debit card, online banking e-payment, and direct debit.
E-wallet
Payment guarantee The chargeback risk of an e-wallet depends on the payment instrument used to
top up the e-wallet. PayPal offers consumers a protection if they are charged
for goods they did not purchase or if the order did not arrive or if the order
did arrive but is significantly different than it was described. Merchants are
protected by PayPal when selling physical goods that are sold and shipped with
proof of delivery from within the US to buyers around the globe.
Brands PayPal, Alipay, WeChat Pay, Apple Pay, Samsung Pay, Google Pay, Masterpass,
Paylib, Amazon Pay, SEQR, MobilePay, Lyf Pay, Vipps, Yoyo Wallet, Chase Pay,
Allied Wallet, Starbucks Wallet, mBank, Lydia, Moneta, Dwolla, Paytm, MobiKwik,
Pay by Bank App, OK, boon.
Market reach The US: E-wallets are used mostly by young people, who tend to not stick with one
e-wallet. Cash and cards are still far more important, and the preferred option
for most in-store payments. The only successful e-wallets seem to be merchant-
backed: e.g. PayPal, Starbucks Pay.
Europe: Adoption of e-wallets is slower than initial forecasts predicted. However, it

is expected that their share will increase in the next 3-5 years. Notable exceptions
are MobilePay in Denmark, with 3.2 million users, and Vipps in Norway, with 2.15
million users.
India: Rapidly growing market due to the conjunction of rising smartphone usage
and lack of access to financial services to a large part of the population. In addition,
demonetisation in India has proved a lucrative opportunity for e-wallet players in
the country.
China: For online payments, the e-wallets (particularly Alipay and WeChat Pay) are
the most popular form of payment.
Online Banking e-Payment
General description The Online Banking e-Payments (OBeP) scheme is a type of payments network
designed to facilitate online bank transfers. In an OBeP scheme, the consumer is
authenticated in real-time by the consumer’s financial institution. The availability
of funds is validated in real-time and the consumer’s financial institution provides
the guarantee of the payment to the merchant in case the payment is made as
a credit transfer (push payment): i.e. the consumer/buyer initiates the payment.
The merchant receives a real-time guarantee so (s)he can continue with the
fulfilment process. The actual funds arrive later (D+1), according to the SEPA
Credit Transfer Scheme.
Payment instrument Bank transfer payments: an online bank transfer, or online wire transfer, is simply
the movement of funds from one bank account to another. When happening
within one bank’s system (also referred to an ‘on-us’ transactions), this typically
happens in real-time. Transfers between banks can take longer (depending on
the cut-off times) and are often subject to fluctuation of speed depending on
the size of the transfer.
Online Banking e-Payment
Payment guarantee A successful online banking-based payment is irreversible. After the bank has
received the payment, the buyer cannot reverse the transfer. The merchant is not
faced with a chargeback risk. Another benefit is the relatively low transaction cost
compared to card, wallet, or other alternative payments.
Brands Multi-Bank OBeP scheme – entails that a seller or Payment Service Provider
has one single connection to the OBeP network in order to accept payments
from any participating financial institution. Brands: iDEAL (the Netherlands)
GiroPay (Germany), MyBank (EU), ePS (Austria) and Bankaxess (Norway).
Overlay OBeP – third party (the overlay provider) which sits between the
payment network and the consumer. The overlay provider requires the consumer
to share their online banking credentials with them in order to have access to
the consumer’s bank account and to initiate the credit transfer to the merchant.
Examples: SOFORT banking (Germany), Trustly (pan-European), PayWithMyBank
(US).
Market reach Europe: Online Banking e-Payments represent a significant share in the
Netherlands, Germany, and the Nordics. It is likely to grow across Europe due
to PSD2: more payments will be done via SEPA Instant Credit Transfers, since
it will become easier for merchants and their buyers to initiate payments online
and mobile. This is facilitated by the new role of Payment Initiation Services.
Ovum, in Instant Payments and the Post PSD2 Landscape, estimates that by the
early 2020s, instant payments will have become a mainstream method for online
payments and by 2024, they would have overtaken payment cards for online
purchases
US: The small market share of OBeP might grow with new players entering the
market (PayWithMyBank), providing a better user experience and less risk.
India: A primary governing body of all retail payment systems in the country,
National Payment Corporation of India (NPCI), has launched a Unified Payments
Interface (UPI). The interface allows customers to make payments through a
single identifier, like Aadhaar number or virtual address. UPI is an infrastructure
on top of which end-user apps can build and implement the features offered
by UPI. UPI enables a customer to make payments using his mobile phone
as the primary device for payments, including person-to-person, person-to-
merchant, and merchant-to-person with the ability to pay someone, as well
as ‘collect’ cash from someone. UPI has a huge potential; if exhausted fully, it
will further promote the concept of mobile payments and also facilitate digital
banking. Version 2.0 of the UPI is set for release in the coming months of 2018
and will see some game-changing features like recurring billing, coming with a
reduction in costs and a greater inclusion. Merchants are expected to be the
biggest winners, UPI 2.0 developments being focused on boosting peer to
merchant transactions and empowering the subscription economy.
Direct debit
General description There are no card scheme networks involved in the SEPA Direct Debit (SDD)
Core scheme. All communication happens directly between banks. To set
up payments by SDD, the payer must complete a mandate to the merchant.
This mandate contains bank-approved wording that makes it clear the payer
is setting up an authorisation for the merchant to debit their account. The
interface for completing the SDD instruction is controlled by the merchant,
which then sends the direct debit initiation to the bank. The SDD core scheme
can be used for single (one-off) or recurring direct debit collections. Direct debit
offers a relatively inexpensive payment method to merchants.
Payment instrument SEPA Direct Debit
Payment guarantee The SDD Core Scheme grants payers a ‘no-questions-asked’ refund right
away during the eight weeks following the debiting of a payer’s account.
Therefore, during this time, any funds collected by SDD Core Scheme will be
credited back to the payer’s account upon request. Consumers may request a
chargeback (claiming it was an unauthorised transaction) up to 13 months after
the settlement. Solution providers offering SDD based payment methods can
take over the risk of default payments and chargebacks.
Brands RatePAY, SlimPay, GoCardless, SEPA Express, NuaPay, Fastpay, Eazipay,

AccessPay, Eazy Collect, Smartdebit, B4payments
Market reach SDD has seen strongest adoption in Germany, the Netherlands, Spain, and
Austria. The payment method is often used for recurring payments, due to the
lack of issues with credit card expiration. As more and more consumers shift
towards subscription model, direct debit may also become a more relevant
payment method in this economy.
Invoice / Installment
General description We distinguish two types of invoice payments: open invoice (payment after
delivery) and instalment payments (a series of payments that a buyer makes
instead of a lump sum to compensate the seller).
Payment instrument SEPA Credit Transfer, credit card, debit card (instalments)
Payment guarantee Solution providers offering open invoices often take over the risk of collecting
the payment. They guarantee payment to the merchant, either by some sort of
insurance or by taking over the invoicing process. To do this, they perform their
own assessment of the shoppers’ risk profile and accept or decline the order
online.
Brands RatePAY, Afterpay, Klarna, AcceptEasy, FuturePay, Sezzle, Divido, CreditClick,

Sliceit, BillPay
Invoice / Installment
Market reach Europe: Open invoice is popular in Germany, Benelux, Austria, Switzerland,
and the Nordics (retail segment). In Turkey, 88% of the consumers prefer to
use their credit cards instead of debit or prepaid cards to make instalments for
online purchases (source: PayU). According to the Lost in Transaction report
by Paysafe, invoice payments continue to be a dominant payment method in
Austria (38% of Austrians now use payment by invoice, compared to just 18%
using debit) and Germany (29%, compared to 20% for debit cards and 25% for
credit cards).
US: 63% of millennials (ages 18 to 29) do not have a credit card, according to a
survey commissioned by Bankrate and compiled by Princeton Survey Research
Associates International.
Cash
General description We distinguish two commonly used methods of cash payments, cash-on-delivery
and kiosk payments. Cash-on-delivery (COD) is a payment method in which
ordered goods are carried to the buyer’s place but are handed over only upon full
payment.
Kiosk payments are popular in India, LATAM, Russia, Indonesia, and Japan.
Shoppers can choose this cash payment method and print a voucher or receive
a reference number. With the voucher of reference number, they can pay for the
item at a kiosk, cash register at a convenience store or bank branch. The kiosk
notifies the merchant that the payment was made, credits the merchant’s account
and confirms to the merchant to ship the item.
Payment instrument Cash
Payment guarantee After the payment has been made and the goods are received, the buyer cannot
reverse the payment via the carrier.
Brands Boleto (Brazil), QIWI (Russia), PayNearMe (the US), Konbini (Japan), Kudo
(Indonesia), Barzahlen (Germany), Paysafecash (global), YesByCash (France)
Market reach Despite an increasing influx of money into the payments ecosystem in
Southeast Asia, cash-on-delivery (COD) remains the most popular payment
method in emerging Southeast Asian markets. 53% of German transactions as
of 2017 were still made with cash.
In LATAM and Russia, kiosk payments give the opportunity to make purchases
to a lot of people who are in rural towns and intermediate cities, where the
presence of a payment point is much more common than a bank.
Direct carrier billing
General description Direct carrier billing implies making a payment for goods or services which is
charged to the customer’s mobile phone account, either to the monthly bill (for
customers with a contract) or as a debit from prepaid credit.
Presently, online purchases of digital content (games, music, video, e-books,

and ringtones), charity donations, TV voting, and competitions are the primary
use case for direct carrier billing.
Payment instrument Direct carrier billing
Payment guarantee Payments cannot be reversed by the buyer. When a buyer fails to pay his tele
phone bill, it is up to the telecom operator to collect the money.
Brands DIMOCO, Bango, Fortumo, Boku, Zong, Text2Pay, Buongiorno, TxtNation
Market reach Direct carrier billing helps merchants to monetise consumers who do not own a
debit or credit card, such as the unbanked (i.e. consumers who do not have access
to banks or credit unions), underbanked (i.e. consumers either having a checking
or savings account, but also relying on alternative financial services) and younger
demographics.
In emerging markets, but also in some economically powerful countries like South
Korea, a variety of purchases can be billed on a mobile phone. In Norway, direct
carrier billing is the second most popular payment method for digital gaming,
while in the other Nordic countries carrier billing has a 10-21% market share from
digital content payments.
Cryptocurrency
General description Cryptocurrency is a digital currency in which the regulation of the amount
of currency units and the verification of transactions of these units is done
through cryptographic techniques. Cryptography is generally used to secure the
transactions, and also to control the creation of new currencies or coins. The first
cryptocurrency to be developed was Bitcoin in 2009. Currently, there are over 1,000
cryptocurrencies available across the globe, with over 150 billion dollars in market
capitalisation, 10,000% up compared to where the figure stood in 2016.
While Bitcoin’s market capitalisation accounted for 86% of the total cryptocurrency
market in March 2015, it has dropped to 72% as of March 2017. The most
spectacular growth of a cryptocurrency in 2017 was that of Ripple’ XRP, which has
grown more than 35,000% in just one year. Ether (ETH), the Ethereum network’s
native cryptocurrency, has established itself as the second-largest cryptocurrency.
Bitcoin allows people to pseudo-anonymously buy goods and services over

the internet. All transactions are publicly visible but the account numbers are
anonymised and are not in someone’s name.
Cryptocurrency payments happen in two ways: firstly, a transaction from one crypto-
wallet to another. These transactions are made exclusively in a cryptocurrency and
mostly happen B2B or C2C. Secondly, a transaction in a cryptocurrency is made
to a crypto-wallet, but can be transferred into a payments account that uses an
institutional currency, e.g. EUR or USD. These transactions happen mostly B2C.
Payment instrument Cryptocurrency
Payment guarantee Cryptocurrencies do not allow payments to be reversed because there is no

third party between the sender and receiver of a payment.
Brands Bitcoin, BitGo, coinify, Litecoin, Ethereum, Zcash, Dash, Ripple, Monero
Market reach By the beginning of 2017, it was estimated that over 150,000 merchants worldwide
accepted Bitcoin, the world’s most popular cryptocurrency, as one of their pay
ment methods. This list includes major retailers like Amazon, Walmart, eBay,
Expedia, Microsoft, Apple and even coffeehouse giant Starbucks. Most notably,
cryptocurrencies are mostly adopted in the online gaming industry.
Possible explanation: security, no chargeback risk, the (pseudo) anonymity factor,

the immediacy of the transactions, the low-cost and evidently the adoption of the
payment method among online gamers.
Cryptocurrencies could prove efficient in countries with a low access to financial

services or in countries where credit cards register high decline rates (Mexico,
India, Brazil, the UAE), and other areas where there is a higher incidence of fraud.
Geographically, Bitcoin is mostly used across North America and Europe, with a
growth in LATAM and APAC countries.
Country Infographics
Brazil
Population Online users E-shoppers e-GDP (ecommerce Smartphone

share of GDP, USD) penetration
211.000.000 66% 41% 0,7% 37,7%
e-wallet | 12%
PostPay | 15%
Pre-Paid | 3% credit card | 64%
cash | 1%
bank transfer | 3%
debit card | 2%
Source: Global Payments Report, Worldpay
Some of the best known alternative payment methods in Brazil
74 PAYMENT METHODS REPORT 2018 • Country Infographics

UK

65.128.861 94% 81% 7,9% 80%
other | 8%
cash | 9%
bank transfer | 4%
card | 52%
e-wallet | 27%
Source: PPRO Payment Report EU
Some of the best known alternative payment methods in the United Kingdom

Netherlands

16.939.923 95% 95% 2,37% 68,8%
others | 9% card | 15%
e-wallet | 5%
bank transfer | 71%
Some of the best known alternative payment methods in the Netherlands

France

66.538.391 86% 65% 3,9% 65,3%
others | 6%
cash | 6%
bank transfer | 11%
card | 61%
e-wallet | 16%
Some of the best known alternative payment methods in France

Germany

81.679.769 89% 79% 2,5% 68,8%

cash | 5%
e-wallet | 23%
bank transfer | 51%
Some of the best known alternative payment methods in Germany

Poland

37.986.412 68% 56% - 63,4%
cash | 10%
e-wallet | 14%
bank transfer | 51%
Some of the best known alternative payment methods in Poland

Canada

36.300.000 90% 62% 2,3% 69,8%
PrePay | 2%
direct debit | 3% Pre-Paid | 2%
direct cards | 5%
others | 1%
cash | 5%
bank transfer | 7%
e-wallet | 12%
credit card | 63%
Some of the best known alternative payment methods in Canada

Russia

144.400.000 85% 40% 1,3% 54,7%
Pre-Paid | 5% PrePay | 2%
credit cards | 11%
others | 2% direct cards | 36%
cash | 15%
bank transfer | 3%
e-wallet | 26%
Some of the best known alternative payment methods in Russia

Turkey

80.000.000 56% 55% 1,6% 49,8%
debit card | 6%
Pre-Paid | 3%
cash | 4%
bank transfer | 2%
e-wallet | 11%
credit card | 74%
Some of the best known alternative payment methods in Turkey

UAE

9.300.000 99% - - 80,6%
direct card | 12%
credit card | 16%
PrePay | 9%
Pre-Paid | 6%
cash | 19%
others | 9%
e-wallet | 15%
bank transfer | 14%
Some of the best known alternative payment methods in UAE

China

1.388.000.000 57% 58% 5,8% 51,7%
PrePay | 2%
Pre-Paid | 4%
debit card | 9% credit card | 10%
others | 2%
cash | 7%
bank transfer | 6%
e-wallet | 60%
Some of the best known alternative payment methods in China

Japan

126.000.000 96% 76% 1,6% 50,1%
Pre- Paid | 1%
PrePay | 1%
debit card | 1%
PostPay | 17%
bank transfer | 14%
credit card | 55%
cash | 10%
e-wallet | 1%
Some of the best known alternative payment methods in Japan

India

1.342.000.000 25% 17% 1,5% 22,4%
PrePay | 7% credit card | 12%

Pre-Paid | 5%
e-wallet | 8%
direct card | 14%
others | 5%
bank transfer | 23%
cash | 26%
Some of the best known alternative payment methods in India

South Africa

55.800.000 64% 47% 0,3% 36,2%
PrePay | 5% Pre-Paid | 4%
others | 17% credit card | 35%
cash | 10%
direct cards | 14%

bank transfer | 15%
Some of the best known alternative payment methods in South Africa

US

326.400.000 94% 78% 2,3% 69,3%
PrePay | 3%
Pre-Paid | 3% PostPay | 2%
debit card | 25%

credit card | 34%
others | 3%
cash | 4%
bank transfer | 6%
e-wallet | 20%
Some of the best known alternative payment methods in the US

Mexico

130.000.000 51% 40% - 40,7%
Pre-Paid | 3%
PostPay | 5% PrePay | 2%
debit card | 33% credit card | 30%
others | 2%
e-wallet | 8%
cash | 7%
bank transfer | 10%
Some of the best known alternative payment methods in Mexico

Explanation Payment Methods
Sources
Ecommerce Report Poland 2018 – Ecommerce Foundation
Ecommerce Report The Netherlands 2018 – Ecommerce Foundation
European Ecommerce Report 2017 – Ecommerce Foundation
Global Ecommerce Report 2017 – Ecommerce Foundation
Global Payments Report, Worldpay, November 2016
Payments & E-commerce Report European Union, PPRO, 2018

How to Create the Right
Payment Mix
Insights into verticals and geographies

How People Pay in Different Geographies and Verticals
When regarding the global state of payments, only very vague Samuel Barret from Trustly’s gaming division elucidates the
trends can be seen: we are moving towards ecommerce, and challenges and opportunities of the online gaming world and how
that causes consumers to use less cash and more other payment to deal with some of the most demanding customers around.
methods. But how exactly does this change affect every region? From “no-registration” casinos to in banner betting, some of
What are the differences between regions? Which verticals and the most unique payment problems are tackled in the gaming
regions lend itself to innovation and which ones are static? In this industry. Additionally, Jens Bader from MuchBetter explains
section, several regions and verticals are examined by experts in the ins and outs of an e-wallet that is optimised for the gaming
their field, providing an in-depth discussion of specific situations industry, and how they deal with the challenges found there.
to give a clear image of the world today.
Jens Bader, the co-founder of MuchBetter, underlines the most
Most broadly, Ralf Ohlhausen from PPRO sheds light on how important payments and fraud challenges for gaming operators
to build the ideal payment mix for global businesses: how to and the way in which complying with regulations should be
capitalise on the ever-growing opportunities while dealing with approached in this industry. Jens explains how to support a
the increased competition that has arisen. In ten steps, he lays good mobile experience in gaming and combat fraud in order to
out a plan for any merchant to gain success on a global scale. stand out from the competition.
Abhishek Banerjee and Rossini Zumwalt from Emergent As the shortest and cheapest payments route should be from the
Payments point out the opportunities abound in the emerging customer’s bank account directly to that of the supplier, Jeroen
markets: Africa’s e-commerce revolution, the digital powers in Dekker from AcceptEasy explains what does an ideal solution for
Latin America, the cashlessness of India, and the mobile focus relationship payments in Europe looks like, by presenting what
in Southeast Asia. The emerging markets are looking better than it means to minimise the payments hassle for B2C customers.
ever, and the room for innovation is immense.
Finally yet importantly, Jean-Christophe Lacour from Amadeus
Kendrick Sands from Euromonitor International explains how highlights the payments preferences and developments that
a shift in retail drives card adoption in China. Several non- shape the travel industry. He also explains how the company
traditional financial service providers in the country gained share helps in tackling the payment needs of travellers globally,
by reaching previously unbanked consumers through mobile what payment methods for the travel industry may come up
devices and online marketplaces. With greater competition in as alternatives for credit cards and how the western markets
the digital payment arena, Sands explains how payments are address the payments needs of Asian tourists who are highly
increasingly seen as an additional channel where merchants are mobile-wallet users.
able to be more connected to their customers and offer a range
of products and services in the country.
Focusing on the US, Sally Baptiste from Payment Operations
Group explains how Americans are changing their payment
behaviour and, more importantly, how they are not. Discussing
the successful innovations as well as the failed ones, it will give
you an insight into how the US is dealing with the changes in the
payment space.
92 PAYMENT METHODS REPORT 2018 • How to Create the Right Payment Mix
How People Pay in Different
Geographies
PPRO
Going Global: Ten Steps to Success for Merchants
Over the last decade, ecommerce has experienced exponential 4. Plan your market entry
global growth. A wider array of markets has encouraged greater The best marketing plan in the world will fail if not supported by
competition and provided more opportunities for online merchants a well thought through market entry strategy. Consider the best
to reap the rewards. However, staying ahead of the competition way to set-up shop in a new region, as it will differ depending
in such a climate is easier said than done and, if not approached upon your business model and regional knowledge. Do you first
properly, going global can put merchants at risk of falling behind. need to use a partner to sell via an online marketplace, auction
With this in mind, here are ten simple steps to success for site or through an established local vendor? Or can you enter the
merchants who want to go global: market alone, right from the start?
1. Assess cross-border market opportunities 5. Consider your market share and positioning
Consider the barriers to trade in the regions that interest you and Your current market(s) may be crowded or dominated by one or
make sure the benefits of doing business in the area outweigh two big names. If you enter an emerging market with a carefully
the costs of meeting market needs and expectations. Also, do tailored and localised offering, you could grab a large slice of
not dismiss high-growth markets, such as Vietnam and Poland, that niche before others do.
which might be relevant for your business, but not the regions
that spring to mind when looking for new sales opportunities. 6. Review payment methods
When it comes to payment options, decide how much risk you feel
2. Know your market and audience comfortable with. Some payment methods may be convenient
This is important not only in terms of what you sell and to who, for customers, but carry a greater burden of chargeback risk or
but also in terms of relevant payment preferences. Online casinos other costs to the vendor. This type of risk can often be mitigated
do not accept credit card payments due to the fraud potential, for example by offering less risky forms of payment (such as
while travel websites need to offer customers the option to pay SEPA direct debits) for goods below a certain value or to trusted
via credit card due to the high value of the transaction. Sale customers. Push payments, which are proactively sent by the
conversions are linked to the provision of appropriate payment client, are less risky in terms of chargeback but their use must
methods – and payment behaviour varies by demographic. be balanced with local preferences. Examples of push payments
In many cultures, younger people are more likely to use non- include giropay in Germany and iDEAL in the Netherlands.
traditional payment methods, but if your target audience is
primarily older, this may not be relevant. 7. Personalise your ecommerce offering for local
needs
3. Plan your marketing strategy Make sure customers are only offered the payment methods rele
Consider your target market carefully. For example, a German vant to their location, in a regionally-appropriate format. There are
national buying furniture online would rather not pay for a new sofa several ways of doing this, including local versions of websites
in advance, but wait for delivery and then pay directly from their and identification of site visitors by location, which then dictates
account. Think about the behaviour of your target customer and the pages and payment options available. You should offer each
which marketing strategies will resonate best with them. If this is visitor, ideally, around five of the most popular payment options in
out of your remit, then working with a local marketing partner will their location, to maximise your chances of making a sale. ➔
provide the necessary knowledge to attract and retain business
in the region, supporting long term growth.
94 PAYMENT METHODS REPORT 2018 • How People Pay in Different Geographies

PPRO
8. Do not procrastinate
Online retailers wanting to take a share of emerging markets need
About Ralf Ohlhausen
to act now, while the trend towards internationalisation is in its Business Development Director
infancy and market niches are free. PPRO
9. Compliance matters
As a business, you must comply with a multitude of legal, financial
and customs regulations of the markets you trade in. It is, there
fore, crucial to keep abreast of and respond to any regulatory About Authorname: Ralf Ohlhausen, MSc in
changes in a timely fashion. This generally demands external Mathematics and Master of Telecommunications
expertise, particularly as the penalties for non-compliance can be Business, has over 25 years’ experience in
extremely tough. ecommerce, financial services, mobile telecoms
and IT. Ralf is responsible for expanding the
10. Consider third-party support company’s portfolio and global reach, as well as
When making a foray into a new market or region, it is impor for developing new business areas and partner
tant to keep on top of commercial and regulatory barriers ships.
and implement the best alternative payment methods. This is
fundamental to the success of your business expansion. However, About PPRO: PPRO enables integrated elec
very few retailers have sufficient expertise in-house to manage all tronic payment processing on a global scale
of these matters optimally, so finding a partner who can support spanning the entire payments value chain from
you on your global journey can be the key to success. acquiring through processing, collection and
settlement. Positioned as ‘The Payment Pro
While the prospect of ‘going global’ is still new for some, it’s vital fessionals’, PPRO acts as a B2B payments hub,
for merchants to break into new regions quickly, armed with the connecting PSPs and other merchant aggregators,
best strategy and proposition to seize the opportunities, before such as acquirers and processors, with local
the competition swoops in. Only by taking this approach can payment schemes.
merchants win new customers and multiply their bottom line,
building new revenue streams and expand into new regions. www.ppro.com
Global success is only a few steps away, and now is the time to
go for it.
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Emergent Payments
Emerging Market Ecommerce Trends and What to Watch
Global emerging markets are looking better than ever after While we expect Brazil to continue to lead the region for the
a strong start in 2018. Many of these markets show no signs foreseeable future, Argentina is the one to watch closely. The
of slowing down with rapid economic, political and financial country is coming off the back of remarkably strong ecommerce
progress across all regions. and mcommerce performances.
AFRICA Argentina has experienced economic unrest in recent years, but
Africa is the next ecommerce revolution and 2018 is the year to it benefits from very high internet penetration and the largest
start making this rapidly expanding market a priority. Here we mobile Internet usage in Latin America. It also has a larger middle
have over a billion people across 54 countries, and the 21st century class than other countries in the region and consumers with high
has seen a remarkable industrial transformation. This young spending power.
and high-growth continent is at the cutting-edge of global

consumer behaviour, without the burden of entrenched distribu We are already seeing some major payments developments take
tion channels or legacy infrastructure for entrants to overcome. effect there. Credit card systems are being overhauled with Visa
and Mastercard, no longer captive to First Data and Prisma.
The region has one of the fastest growing middle-class consumer We expect digital banks to prevail and some of the cash-based
markets in the world. Their buying power is significant and methods, like Pago Facil and Rapi Pago, to give into more mobile
they are driving demand for content on mobile platforms. The and digital payments.
explosion in mobile usage is not only important from a consumer
perspective, but, beyond that, it’s extending into payments INDIA

innovation. Expect an even bigger acceleration of India’s payments inno
vation throughout 2018. It’s been over a year since the Unified
Nearly 60% of the world’s active mobile money accounts are Payments Interface launched, and version 2.0 sees the release of
in Sub-Saharan Africa alone, according to Ecobank Research. some game-changing features, like recurring billing. In October
M-Pesa has been hugely successful in Kenya and we expect this 2017 alone, there were over 76 million UPI transactions made,
to be replicated across the board for mobility payments in Africa. up from 30 million in September 2017. If this adoption speed
2018 is going to be an instrumental year for this frontier market. continues, the reality of a cashless economy isn’t far off. It has major
potential to disrupt the way Indian consumers pay digitally.
LATIN AMERICA Expect this to fuel a further shift away from cards and wallets. The
In Latin America, high levels of connectivity are fuelling rapid payments system overhaul has been driven by the government’s
ecommerce growth. The region’s biggest ecommerce market investment in state-of-the-art technology, customer adoption and
– Brazil – is a global digital power within its own right. Latest awareness campaigns. People are excited about the reduction in
trends indicate mcommerce and social media are still the best costs and greater inclusion. ➔
way to reach consumers. Most importantly, local payment
methods are the key to success, with many consumers foregoing
international credit cards in place of local credit cards, pinless
debit transactions and Boletos (bank and cash).

Emergent Payments
SOUTHEAST ASIA
Southeast Asians spend more time on their mobiles than any
Rossini Zumwalt
other market. On average, consumers spend 3.6 hours per day Chief Payments Officer
using mobile internet. Locals are tech savvy and motivated, and Emergent Payments
global technology companies are paying attention to this trend.
Major investment boosts from Chinese companies Alibaba and
Tencent have paved the way for a big year in ecommerce across
Abhishek Banerjee
the region.
Chief Technology Officer
Emergent Payments
In particular, Indonesia is one to watch with the market primed
to grow rapidly. With swift GDP growth and the fastest growing
number of Internet users across the globe (We Are Social and
Hootsuite), Indonesia is ripe for ecommerce.
About Rossini Zumwalt: Rossini has extensive

Quick to establish itself as a mobile-first nation, it presents a experience in setting up strategy and managing
unique opportunity for merchants to introduce digital platforms to operations for ecommerce payments and risk,
further engage tech savvy and motivated consumers. By 2025, both as a merchant and solution provider. She
Southeast Asia’s digital economy is predicted to surge to served as a Senior Director at Symantec and, prior
USD 200 billion, with Indonesia’s digital market to account for to that, as Head of Global Treasury.
nearly half of that (Alphabet Inc. and Temasek Holdings Pte). This About Abhishek Banerjee: Abhishek has a deep
would put the nation third in the region, behind Asian powerhouse background in payments and fraud prevention
markets such as China and India. engineering, along with big data and analytics.
Before joining Emergent Payments, Abhishek was
One of the biggest challenges for ecommerce in Indonesia has the Head of Engineering for payments and risk at
been the low penetration of debit and credit cards. However, there Western Union.
continues to be great potential for alternate payment methods, as About Emergent Payments: A subsidiary
consumers demonstrate their willingness to pay and shop online. of Emergent Technology Holdings, Emergent
Payments offers a total global and local payments
solution for high-growth markets. They serve as
both a payment gateway and payment facilitator
for digital merchants in Asia Pacific, Latin America,
Africa, Middle East and Europe.
www.emergentpayments.net
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Euromonitor International
How the Shift in Retail Drives Card Adoption in China
Nearly one-third of total retailing in China is expected to come population either due to a perceived lack of value from lower-
from online channels by 2022, marking a nine percentage point income consumers or from consumers residing in a rural environ
gain from 2017. This shift has resulted in several non-traditional ment where there was limited access to mainstream financial
financial service providers gaining share by reaching previously institutions.
unbanked consumers through mobile devices and online market
places. With greater competition in the digital payment arena, Alipay’s platform in China focused on enabling quick, reliable
payments are increasingly seen as an additional channel, where and secure payments without disrupting the broader traditional
merchants are able to be more connected to their customers and financial services sector. Starting with only online processing
offer a range of products and services. in Alipay, ANT Financial quickly identified other gaps that were
limiting online retail: basic consumer lending, insurance, credit
scoring and investment services. Alipay was able to leverage

their customer relationships from Alibaba and the brand strength
built from facilitating commerce as a digital payment platform to
offer these additional products and services. As the company
expanded into financial services, it became clear that not only
could they reach a wider consumer base through mobile devices,
but they could also offer financial services at a far lower cost
because they did not have a legacy branch network to support.
Alibaba is not the only company that has made the transition from
online marketplace or social media provider to financial services
and payments in China. Suning, JD.com and Tencent have all
In 2017, there were 277 million more banked consumers in China capitalised on this rapid shift in consumers’ retailing preferences.
than five years ago. Driving this rapid adoption has been the With further growth for the internet retailing sector in China, these
steady transition to online retail from traditional in-store channels. companies are expected to expand offerings both in terms of
The total value of internet retailing in China, as well as its share of products and services, but also throughout the region.
total retailing, are the largest globally and a number of factors have
contributed to the faster adoption rate, including innovation from
technology firms, broad distribution of mobile devices throughout
rural portions of the country and the increased capabilities of
smartphones.
The prime example of a Chinese technology firm adapting to offer
payments and financial services is the payment company asso
ciated with Alibaba, ANT Financial. As the shift towards online
channels became more pronounced in China, the tradition al
financial service sector was unable to provide an effective digital
payment platform to facilitate transactions. Additionally, basic
financial services were not available to a large portion of the ➔

Euromonitor International
With online retail continuing to grow and financial services
becoming widely available, the way consumers pay has also

Kendrick Sands
registered a significant shift over the past five years. Card Head of Consumer Finance
payment value surpassed cash payment value for the first time Research
in 2017. The discrepancy of the growth of payment functions Euromonitor International
is expected to accelerate from 2017 to 2022 with a compound
annual growth rate of 7.8% expected for consumer card payment
value compared to cash with 0.3%. As consumers become
more comfortable using cards for online payments, there is an About Kendrick Sands: Kendrick Sands is the
increased expectation for offline merchants to also accept cards. Head of Consumer Finance Research at Euro
In the end, this makes the payment function more convenient for mon itor International, which he joined in 2010.
consumers. In his current position, Kendrick coordinates Euro
monitor’s consumer finance research, providing
Debit cards drove the majority of card payment value growth from strategic analysis and in-depth coverage of
2012 to 2017; many newly banked consumers had limited access financial cards and payments worldwide.
to credit products due to a lack of credit rating services as well
as the lack of consumer information. About Euromonitor International: Euromonitor

International is the world’s leading independent
From 2017-2022, the driver of card payment value is projected provider of global business intelligence and strate
to shift away from debit to credit cards. Chinese consumers are gic market research. We create data and analysis
expected to generate an additional USD 2.6 trillion on credit on thousands of products and services around
products compared to USD 1.7 trillion on debit cards from 2017 the world. Euromonitor International’s global market
to 2022. research database, Passport, provides statistics,
analysis, reports, surveys and breaking news on
Despite the significant growth, debit is expected to continue to industries, countries and consumers worldwide.
generate more payment value in 2022. Unlike the retail sector,
the card payment landscape has remained consistent among www.euromonitor.com

card issuers. The top four issuers by card payment value – China
Construction Bank, Industrial and Commercial Bank of China,
Agricultural Bank of China and Bank of China – accounted for
61% of total card payment value. On the network side, the
limitation of meaningful competition has resulted in UnionPay
International becoming the world’s largest card network by
payment value. However, the Chinese government has allowed
other companies to apply for a licence to process payments
which could lead to greater competition for the projected trillions Share this story
of dollars of additional card spend generated by 2022.

Payment Operations Group
Purchasing Methods in the United States – Innovatively Static
Payments in the US market continue to multiply; however, few The higher-trafficking wallets have built partnerships, such
options collect enough user-base to claim market-share. Trends as Zelle through online banking, and ApplePay with device
come and go but the main players remain. Most view the card reminders for their wallet. The issues are usage. Some consu
as winner of the US market but there’s a player Visa wants to mers view the ease of purchase inversely proportional to conve
overtake. nience of setup. With the high rate of card replacement in the US,
re-filling wallets with new cards becomes a chore best ignored.
According to the JPMorgan Chase survey “How do you believe you Of course, the P2P apps can be easily bypassed with use of cash
will be accepting/making the majority of your payments 5 years to ‘split the bill’. Wallets continue to spike and retreat with small
from now?” cash is still strong in the US. groups of loyal fans making every wallet basically successful yet
unable to take the market.
Interestingly, only consumers expect cash to remain as strong

as credit cards, while merchants hold hope for credit cards and
digital wallets to rule. However, consumers own spending habits.
Looking within the US, cash must be acknowledged as an impor
tant payment preference. US ecommerce hasn’t built methods for
accepting cash, so cash spending is limited to retail. Why cash,
though?
Many retailers have cash-driven points-of-sale. In restaurants and
service areas, cash still carries weight as tipping drives wages and
revenue. Additionally, Americans use cash as a debt-management
tool. There is no better way to ensure you don’t get into debt than
to spend only cash.
Mobile wallets cater to younger consumers experimenting with
new/trendy payment methods. With every style of wallet concei
vable, US consumers are pushed to pick a favourite and make it
their preferred purchase mechanism. Many of these options have
a strong ‘test’ phase, but don’t stick with the consumer. Two large exceptions are PayPal and Starbucks. Neither wallet,
when introduced, claimed the ‘nifty’ factor but each resonated with
The issue with these spikes is multi-pronged. First off, the target users. When first introduced, PayPal called to security-minded
market is the younger demographic and they are not as faithful, buyers and focused on ecommerce sales yet with expansions,
shifting to the next fad. Brand loyalty may be strong in their processed USD 451 billion in 2017. Starbucks leveraged their loyal
tech or social lives but it is not as strong in their financial lives. customer base in introducing their app and in 2015, 7.5 million
Senior buyers are faithful to purchase methods but they are not purchases went through the app weekly. The Starbucks wallet
enamoured with newer wallets as current card behaviours work was an instant hit and continues to grow. ➔
fine.
Payment Operations Group
Why are these wallets successful? Ease of use, ease of enrolment,
and fulfilling customer needs – not perceived needs. And they are not
Sally Baptiste
slowing down their development. New features are released often Consultant
with a lot of publicity, keeping users engaged. Not to be ignored, Payment Operations Group
credit cards have followers across generations and are expanding
their reach. As attempts to win over the unbanked and under-
banked peaked then fell away, the brands are looking to take
specific markets and force buyers into their fold – but there are
hurdles. Years ago, the brands began offering lower rates to markets About Sally Baptiste: Sally Baptiste has 30+
with growth opportunities. Areas like telco and utilities received years professional experience with both the largest
discounts and the trend continues today with rent and insurance US eCommerce Acquirer. As a leader at Chase
pay-by-card discounts. The brands are deepening the card’s Paymentech, then a Senior Business Manager
usefulness within household spend and growing into historically of payments for AT&T, she was employed as
cash markets. Reducing cash is not this simple, however, as some the payments expert for McAfee. With a Master
consumers tried prepaid cards for online purchases and bill pay of Business Administration degree and Payment
ment, but prepaid cards have initial activation and reloading fees Card Industry Professional certification, she now
that reduce the initial value, not to mention cross-border block co-owns her own consulting group of Payment
ing. With check cashing locations offering money order purchases Experts.
at lower fees, there is little palate for cards. Household markets
are opening to cards but cash transitioning to plastic remains About Payment Operations Group: Payment
problematic. Cards are also challenging wallets in the US by Operations Group is a consultancy of Payment
building their own convenience factor with one-click checkout Professionals with over 40 years’ combined
APIs. The Brands are so sincere about this convenience play, experience in the Payments Industry – from
they are combining to release a One-Click/All-Brands API to acquiring and ISO’s to issuing and merchant
increase appeal. Convenience-only, wallets may be losing their perspectives. Our focus is on educating our
differentiating factors. clients with our end-to-end approach to payment
processing, helping them navigate the complex
Behind all of this manoeuvring, rewards cards have unmatched ecosystem, and strengthening their position in
loyalty in the marketplace with miles/points/cash. Meanwhile, their chosen processes.
debit cards, with little or no loyalty schemes, are growing quietly
in the background. With both merchants and consumers viewing www.paymentoperationsgroup.com

debit as a reliable payment mechanism, only a purchase’s
placement in the household budget moves it into the world of
wallet or credit. Basically, unless a payment type is convenient and
engenders loyalty, it will remain a niche play. Until a new payment
type is more universally appealing than cash or charge, for all Share this story
generations and all buyers, the US market will continue as it is.
With so many new payment types, the US will remain entrenched
until convenience is redefined.
How People Pay in Different
Verticals
Trustly
A Faster Way to Play: No-Registration Gaming Takes Hold
There’s no denying: today’s consumers are impatient. Speed has Once the player’s identity is verified, registration details are pulled
become a hygiene factor across almost all industries. People from the account to fulfill the necessary KYC checks, and the
expect to be able to stream TV shows on demand and have their merchant can establish an account in the background. With the
takeaway orders delivered in less time than it takes to microwave payment provider helping to shoulder some of the KYC burden,
leftovers. The online gaming sector is no exception: players gaming merchants can conserve resources and ultimately provide
expect to be able to play their favorite games and cash out their a smoother player experience.
winnings instantly.
Benefits abound
Similarly, registering at a gaming site has traditionally involved While the benefits of no-registration casinos for players are clear,
filling out lengthy registration forms and then waiting for days there are numerous up-sides for operators as well.
for the online casino to conduct its due diligence. Today, thanks
to products like Trustly’s Pay N Play, it’s becoming possible for 1. Boost ROI on acquisition and reactivation
new users to play instantly on a gaming site without registration, Did you know that around 24% of online gaming registrations are
while still allowing operators to stay compliant with the regula abandoned, likely because of rigorous regulatory requirements
tors, through the monitoring of both transactions and players who and manual processes? (Jumio/Harris research survey of online
show signs of addictive and/or high-risk behaviour. With these gaming customers in 2016) On top of that, only 1 in 3 people who
innovations, there’s been a surge of interest around “no-registration do manage to register actually end up making a deposit within
casinos” from both players and operators alike. 24 hours (Optimove data). Operators spend massive resources to
acquire players, only to lose them during the critical registration
How do “no-registration” casinos work? and deposit steps.
The idea of depositing money to a site that doesn’t require
registration can be unsettling to some players, but just because However, with Trustly’s Pay N Play, players can register and start
they don’t need to register, doesn’t mean they don’t have an actual playing immediately just by making a deposit via their online bank.
account. The “no-registration” model makes it easy for players to This seamless sign-up process drastically reduces drop-off during
get started without needing to provide many details such as full the onboarding flow, significantly lowering acquisition costs.
name, home address, and phone number or to download special In addition, since registration and the initial deposit are linked,
software. Instead, all they need to do is make a deposit using their the chance that players register but never deposit is eliminated,
online bank. ultimately increasing conversion.
For example, players can click “Make a deposit,” enter the 2. Build loyalty through instant withdrawals
amount they wish to deposit, and verify themselves with their Pay N Play helps operators to build loyalty among players
online bank to complete the deposit. The process of verifying through instant withdrawals. According to Trustly’s internal
oneself through the online bank is incredibly safe thanks to strong data, players at Pay N Play sites make 16% more deposits and
two-factor authentication methods, an extra layer of security that have 17% higher transaction values each month, compared to
authenticates users based on something they know (a security traditional gaming operators. ➔
question or username and password, for example) combined
with something they have (a security token or smartphone, for
example).
103 PAYMENT METHODS REPORT 2018 • How People Pay in Different Verticals
Trustly
3. Fulfill KYC regulatory requirements

Once the player’s identity is verified via an online banking deposit,
Samuel Barrett
Trustly pulls registration details from the player’s bank account Director of Gaming
and passes them onto the operator to fulfill the necessary KYC Trustly
checks. The operator can then create a player account on the
player’s behalf.
A future free of registration

As regulators continue to tighten their grips on gaming operators About Samuel Barrett: Samuel Barrett started
through sophisticated legislation, it’s becoming an increasing his gaming career more than seven years ago
drain on their resources to remain compliant. Luckily, payment at Clarion Events, where within three years he
providers are becoming more and more innovative and, going became head of sales and was managing the
forward, they will be able to support operators in their KYC efforts. biggest gaming show in the industry. He has since
held management roles at payments businesses
In-banner betting and beyond including ClickandBuy, Skrill (Paysafe Group), and
So as “no-registration” casinos become commonplace, how can FX brokerage World First before joining Trustly as
operators further differentiate themselves, and where could this Director of Gaming.
technology lead the industry next?
About Trustly: Trustly is a Swedish fintech

Imagine you’re surfing the web, perhaps reading news about your company that makes online banking payments
favorite football team. In a banner to the right, you see an offer to fast, simple and secure. We offer instant deposits
bet on the score of tonight’s match. You click on the banner and, and withdrawals to players across 29 European
without leaving the page, you place a bet on your team. You select countries and our latest product, Pay N Play, lets
the amount you wish to bet, make a deposit by logging into your players skip the sign-up step and start playing
online bank via the iframe, and confirm your deposit. You watch games instantly, while ensuring that operators
the game and it turns out you made a smart bet. When you’re stay compliant.
ready to cash out your winnings, you navigate to the site and
withdraw the money directly to your bank account. www. trustly.com
It’s hard to picture a smoother betting experience, as you never
need to register an account or even leave the website you’re
surfing. The applications of the technology are far-reaching:
it could enable shoppers to buy a pair of shoes directly from a
banner ad, or let music fans purchase concert tickets with greater
ease. It’s a reality we aren’t very far away from and one that stands
to dramatically reshape online gaming and e-commerce as we Share this story

know it.
MuchBetter There are three critical areas of iGaming
payments that need to be fixed: unfair transaction
fees, poor user experience, and high fraud levels.
Paypers interviews Jens Bader, MuchBetter co-founder, The payment experience hasn’t always been great in gaming.
to understand the payments challenges for gaming Mobile gaming is more popular than ever, but unlike many modern
operators mobile apps in other sectors such as Uber, Tinder, Airbnb which
work seamlessly, a lot of the payment processes on gaming

Can you give us a glimpse into the main trends in sites have not yet fully transformed to support a good mobile
the gaming industry? experience. That’s why, with MuchBetter, players can pay with
Market consolidation is a big trend in gaming. Margins are squeezed just their phone and fingerprint, with no passwords or security
and it’s harder than ever to stay profitable, which is why we’re questions to remember.
seeing so much consolidation in the market. Scale is the best
route to success in today’s market. Another big trend is having There is also the bonus abuse – where the gaming operator
to adapt to regulatory change. The US just opened the door to spends a significant amount of money to acquire new customers
sports betting, so there will be a gold rush as operators strive to by offering a bonus. This means that when customers open
cash in on the opportunity there. In stark contrast, other markets deposits, they receive a certain percent of additional money to
are clamping down on gaming operations and changes to FOBT play with. Fraudsters exploit this benefit by creating and funding
limits in the UK will hit physical casinos hard. multiple accounts, also using a new bonus code for each of these
new accounts. The challenge here is that one cannot use the
What are the challenges for gaming operators same credit card or bank account for funding.
with regards to payments and complying with
regulations? And that’s where the wallets come in. For bonus abuse, customers
Before we launched MuchBetter to the iGaming industry, we would create a correspondent new e-wallet for each new account.
identified three critical areas of iGaming payments that we thought Therefore, they have a set of wallets matching the account and
needed to be fixed – then tailored a solution to match. The three then they feed them with bonus codes, do one bet and withdraw
issues we identified were unfair transaction fees, poor user the money. Thus, the operator loses money and ends up by
experience and high levels of fraud. acquiring zero customers. The gaming operator cannot detect the
scam because the wallet is a black box, which means it does not
Starting with transaction fees – the traditional iGaming payments share any information with the operator about the identity of the
model where popular e-wallets are involved, is still built on the account holder or the account’s details.
principle of charging for every transaction, but as transaction
fees have increased through the years, it has put operators in an We also seek to create a trusted environment by employing
untenable position. They either have to pay more and more for technologies like device pairing and device authentication.
the same service, or risk losing players overnight if they drop their When opening a MuchBetter account, one has to download
payment partner. MuchBetter solves this challenge with its net the MuchBetter app and then the next step is verification of the
deposit model, which lets operators pay transaction fees on their phone number. We have three unique elements: the verified phone
winnings only ‘money in’ minus ‘money out’. The fees we charge number, the trusted device and the app and they all have to be
are in closer correspondence with the real value of the player for in one place for the customer to use the account and authorise
the operator and we believe this is a fairer transaction model. the transaction. We also use biometric authentication to overcome
account takeover, Man-in-the-Middle attacks, or chargeback
because nothing can actually be stolen, skimmed or phished. ➔
MuchBetter
What does your company do that gives an upper Jens Bader

hand compared to existing payments methods Co-Founder
catered for the needs of the gaming industry? MuchBetter
MuchBetter certainly benefits from being built for the mobile era,
not retrofitted to suit. We’re also the first payments platform that
was built with gaming operators in mind, to solve the challenges
outlined above. It’s on these issues, transaction fees, fraud and
UX, that we really stand out from the competition. About Jens Bader: Jens has a rich management
background with more than 20 years of experience
We’re also a lot more agile than the incumbent payment options. in the Online and Mobile Payments industry.
This is a major plus given the speed at which things change in this A seasoned commercial leader, Jens recently
industry. It’s hard for big companies to move as fast as regulatory co-founded MIR Limited, an FCA-licensed
change, so you’re seeing a lot of payments companies and FINTECH group that develops and operates
operators simply opting to cease trading in regions that become second-generation electronic money services
problematic. This is a challenge for them, but obviously a great servicing on- and offline merchants. Jens is a
opportunity for us as these markets open for new entrants. frequent speaker on payments and fraud-related
topics worldwide. Jens holds a degree in Interna
Could you give some insights into your company’s tional Business Management.
roadmap?
We will be launching the MuchBetter loyalty and reward engine About Muchbetter: MuchBetter is the new
shortly, which will give all MuchBetter users the chance to win payments app for iGaming. MuchBetter allows
cash prizes and other rewards just from using the service day-to- customers to transfer and receive funds in
day. For operators, this is another great chance to drive customer real-time, combining state-of-the-art mobile
loyalty, without harming their interests. For us, this will help bring technology twinned with a ground breaking
MuchBetter to a wider general-purpose audience. The service has commercial model. MuchBetter is the equilibrium
features that are suited to all online and real-world payments, not between security and customer experience and
just gaming, and we want MuchBetter to become users’ preferred allows gaming operators to generate a significant
payment product for every situation. commercial upside.
www.muchbetter.com
Share this story
MuchBetter
Type of payment method e-Wallet
Active since 2007
Operational Area Worldwide
Industries Gaming, retail, marketplaces, financial services, digital entertainment
How it works Mobile payments app
Potential reach Worldwide
Market Share
Acceptance High
Chargeback Risk Low
Facts
Settlement currency Major European and international currencies
Processing currrency Any
Currency available for consumer EUR, USD, GBP, CHF, PLZ, DKK, SEK, CAD, AUD
Transaction volume Available on request
Implementation requirements None

(non technical)
Reconciliation Merchant reporting portal, csv, xls data sets
Pricing On request
Channels (POS/ecommerce) Ecommerce
AcceptEasy
Paying Attention: Relationship Advice for European B2C Companies
Automatic payments in Europe today are either expensive (credit e-Mandates. Most countries have either adopted cumbersome
card), rigid (direct debit) or non-existent - even though they’re the signing forms, or are condoning insecure methods. Neither
foundation of ideal B2C relationships. AcceptEasy tackles these does much to overcome trust issues inherent in many cultures.
problems, enabling everyone happily paying from their bank AcceptEasy therefore takes each country’s most familiar proof that
account to yours. a customer has access to the IBAN they put up for direct debit:
the local cross-bank online payment method, like iDEAL in the
Almost every B2C brand wants to be in a steady long-term relation Netherlands or Sofort in Germany. Lacking that, customers sign
ship with its customers, underpinned (if not defined) by minimised with BankID scheme or another form of (strong) authentication.
payment friction at minimal cost. For household billers and other In each case, meeting SEPA Rulebook requirements on content,
subscription vendors, the automated recurring payment is the signing and process.
Platonic ideal. For on-demand relationships, it’s consent implied

by the transaction of stepping out of an Uber ride or Amazon SDD flexibility. While it may sound alien to most readers of this
store. The common denominator is convenience enabled by trust: article, more and more people want or need to figure out when
the supplier can take the money from the customer’s source of to pay each bill every month. This does not mesh with most
funds established before the transaction at hand. SDD implementations rigidly collecting on the same day of every
month. Why not allow the customer to choose a default date
The big cut or the short cut? and even easily deviate from that in a given month within certain
Many brands require credit cards for such relationships. This boundaries? Or even better, think along using PSD2’s XS2A?
introduces not only a barrier for those consumers who don’t Being flexible drastically reduces the likelihood of SDDs failing
have one, but also the cost and complexity of middlemen playing for lack of funds, and of customers choosing instead to receive
their part and taking their cut. Credit cards are, and always will individual bills that often need chasing.
be, very expensive for merchants and billers. The main reason
for taking this road anyway is that the other road has not been Exception excellence. An SDD can still fail, be much higher than
good enough. normal, or otherwise warrant an exception. Notifications should
not just be dumb messages, but instead offer the customer
After all, the shortest and cheapest route should be from the cus options to easily approve, challenge or change the upcoming
tomer’s bank account directly to that of the supplier. For this, payment. Better yet, if you let the customer set up a back-up
Europe invented the SEPA Direct Debit scheme. In many member account (or card or other payment method), money can still flow
countries however, it hasn’t taken off for various reasons; we’ll automatically.
get to those shortly. And even in countries like the Netherlands,
where it did peacefully replace its well-established predecessor, Omnichannel messaging. A lot of the above is about the mecha
not meeting customer needs still results in millions of bills and nics of payments. Equally important is the communication and
reminders requiring individual payments. We know, as we facilitate process surrounding it. Do customers sign the mandate during
and optimise such payment requests (links to pre-filled online online onboarding, or from a digital message shortly after? What
transactions) for hundreds of corporates. if the relationship starts from a chat? Similarly, messaging during
the relationship, also for incidental payment requests outside
So, what does an ideal solution for relationship payments in Europe the scope of the e-Mandate, should reach customers in every
look like? As with most relationships, it starts with a good first channel they might use. Including the paper bill you want them
date. to abandon. ➔
AcceptEasy
Clarity. Whether for a mandate or an individual payment,
messages we send on a brand’s behalf clearly change from a

Jeroen Dekker
request to a receipt by visually changing colour and status. They Head of Product & Marketing
do so across instances and channels, so that the portal and the AcceptEasy
contact centre know what just happened through an email or an
app. Whereby all communication channels show the same status
of the payment. We call that cross-channel transaction integrity –
all channels are in sync.
About Jeroen Dekker: Jeroen Dekker heads

Easy and secure implementation. The above requires a combi Product & Marketing at AcceptEasy, following over
nation of skills and tools, especially if multiple countries are 15 years of similar roles bringing new products to
involved, that need to be bolted onto existing billing systems and market (and vice versa) at innovative international
into various communication channels. With privacy and security software companies in financial services, risk
top of mind. We’ve done most of the hard work for that already, management and compliance.
running ISO-certified operations around a cloud-based platform
that’s easily integrated via API and other means. Implemented in About AcceptEasy: AcceptEasy transforms and
a dozen European countries and beyond, we can service local optimizes how consumers and small businesses
deployments as well as shared service centres. can easily pay you everywhere, anytime throughout
the relationship lifecycle. Headquartered near
AcceptEasy built a business by making the best of bad situations: Amsterdam with clients across Europe and in
minimising the hassle for B2C customers to pay whatever could North America, its cloud-based software and
not happen automatically. Along the way, we invented the ideal services deliver superior customer experiences
first date to at least help start (automatic payment) relationships. across channels while saving time, cost and trees.
Our next mission in Europe is to prevent bad situations in the
first place, finally delivering on the real promise of SEPA Direct www.accepteasy.com
Debit for companies looking to make and save a lot of money
through great payment relationships with their customers.
Share this story
PSD2 opens up the possibility for travel
Amadeus companies to offer their own direct payment
methods, to increase loyalty or reduce payment
costs.
The Paypers interviews Jean-Christophe Lacour, Head the world with a single technical integration and a single view of
of Product and Offer at Amadeus’ payments business, their payment transaction data. We also have a consultancy team
to understand the payments preferences and develop comprised of experts with a deep understanding of the global
ments that shape the travel industry payment market. This team sits side-by-side with our customers
and helps them build an effective global payments strategy.

Could you elaborate a bit on the key developments
in Amadeus’s offering since 1987? How did the What payment methods for the airline/travel industry
company develop in portfolio and target markets? does Amadeus see coming up as alternatives for
Amadeus began processing travel payments when we started credit cards? Do you expect any growth in mobile
trading in 1992. By 2012, the payments technology revolution was wallets or in multi-currency cards for travellers?
gathering speed and we had noticed an increase in the number Credit cards are a significant part of the payments ecosystem
of requests from our customers to help them process payments. in travel and we believe they will continue to be, especially in
Therefore, we set up the payments business unit to proactively markets where they already have a strong presence. In these
address these needs. Today, we offer a one-stop-shop smart markets, even when new payment methods are launched, there is
payments hub that helps travel companies with all their payment often a card payment behind. We see alternatives, such as mobile
needs, including processing incoming payments from customers money, gaining the most traction in markets where credit cards
and outgoing payments to suppliers. We process about EUR 100 are less well established today, like China and most of Africa.
billion worth of payments each year from 192 countries.

How do the western markets address the payment
What are the specific payment and fraud challenges needs of Asian tourists, who are highly mobile-wallet
for the travel/airline industry? users?
The travel industry is – almost by definition – global. According to The growth of travel and tourism from Asia – particularly China
our research, over 30% of bookings made on airlines’ websites – to western markets is a key opportunity for travel companies:
come from outside their home country, and 17% of bookings from tourism from China to the European Union has tripled in
outside their home continent. The complexity required to accept the past ten years.
payments from around the world is huge: there are close to 300
different methods of payment around the world and international To fully accommodate Chinese travellers, travel companies need
airlines typically manage over 20 different payment providers. to accept methods of payment such as Alipay or WeChat Pay.
There are indications that it hinders travel companies from However, a one-off integration with just one or two payment
innovating in payments. methods would add unnecessary complexity to a global travel
company’s payment infrastructure. It is critical for travel companies

The changing airline consumer retail behaviour varies to be able to integrate payment methods into a global payment
across geographies; how does Amadeus help in strategy in a convenient way. The travel companies we speak to
tackling the payment needs of travellers globally? are looking for a platform that can provide them with access to
Amadeus helps in two ways. Through our smart payment hub, we worldwide payment methods through a single connection, and
provide fully integrated access to over 250 different methods of access those payments via a single database. ➔
payment so travel companies can process payments from around
Amadeus
What are the challenges of preparing for PSD2/

SCA for airlines? Jean-Christophe Lacour
PSD2 should be welcomed as an initiative to foster greater Head of Product and Offer
innovation and choice in the payments sector. Nevertheless, Amadeus’ payments business
it presents a few interesting questions for those responsible for
payments in travel companies. Travel companies need a way
to distinguish between corporate cards and consumer cards
when applying their surcharge policies. For the main part, their
acquiring banks can help them with this. More complex, however, About Jean-Christophe Lacour: Jean-
is ensuring that they are fully following the local implementations Christophe Lacour, or ‘JC’, is Head of Product
of PSD2. The UK, for example, has banned surcharges on all and Offer for Amadeus’ payments business. The
consumer payment methods, which is a step further than PSD2 core offer is Amadeus’ smart payment Hub, which
that only bans surcharges on consumer cards offered by four- allows travel companies to manage payments
party schemes. across all countries, sales channels and payment
methods. JC joined Amadeus in 2016. Previous
Travel companies are also looking hard at how to implement the to Amadeus JC founded, and was non-executive
Strong Customer Authentication requirement. This is especially director for two different startups; and, before
a challenge in the travel industry where, in many cases, travel that, held a number of senior roles with Visa.
agencies pass payment details through to suppliers who are the
ultimate merchant of record. Amadeus Payments is working with About Amadeus: Amadeus is a leading provider
payment schemes such as Visa and Mastercard to ensure that 3D of advanced technology solutions for the global
Secure can apply to the use case where the traveller purchases travel industry. Customer groups include travel
from a travel agent but the travel supplier is the merchant of providers (e.g. airlines, hotels, rail and ferry
record. In addition, Amadeus Payments plays an active role in operators, etc.), travel sellers (travel agencies and
a travel industry-working group designed to ensure that SCA websites), and travel buyers (corporations and
recognises travel-specific B2B payments between consumers/ travel management companies).
corporate travellers, travel agencies / management companies
and travel suppliers. www.amadeus.com
Finally, PSD2 opens up the possibility for travel companies to www.amadeus.com/en/business-function/

offer their own direct payment methods. It could also be used to payments
increase loyalty or reduce payment costs.
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Glossary
Glossary
A
Access Card Acquirer
A plastic card used in an automated teller machine (ATM) to com A financial institution, Visa or Mastercard licensed member,
plete deposits, cash withdrawals, account transfers, and other which concludes an agreement with merchants for the acceptance
related account functions. of credit cards as a means of payment for goods and services,
and settles card payments for merchants.
Access Control Server (ACS)

Provides cardholder authentication through username and pass Address Verification Service
word and decides if the data is valid or not. ACH sends the signa Checking method for VISA, Mastercard and American Express
ture to the customer’s browser and to the Merchant Plug-in (MPI). to prevent fraud for credit card payments in long-distance trans
Credit card issuers are required to maintain an ACS used to actions in which the numerical address data provided by the
support cardholder authentication. customer is compared with the address data stored at the credit
card company. Card Not Present merchants can use AVS to

Account history accept or decline transactions based on the validity of the billing
The payment history of an account over a specified period, inclu address information provided by the customer.
ding the number of times the account was past due or over the
credit limit. Alternative payments

All the payment methods that are used as an alternative to credit
Account holder card payments and are not running on global scheme networks
Individual(s) responsible for paying the amounts charged to an such as Visa, Mastercard or American Express.
account. A person can be allowed to use a card as an authorised
user but not be legally liable for the debt. American Express (AMEX)
A company that provides credit cards, charge cards and traveller’s
ACH Network check businesses. In December 2017, the company had 112.8
The ACH Network is at the center of commerce in the US, moving million cards in force, including 50 million in the US, each with an
money and information from one bank account to another through average annual spending of USD 18,519.
Direct Deposit and Direct Payment via ACH transactions, including
ACH credit and debit transactions; recurring and one-time payments; American Express SafeKey
government, consumer and business-to-business transactions; A 3-D Secure protocol designed to reduce online fraud by
international payments; and payments plus payment-related infor confirming the cardholder’s identity with an additional password.
mation. Each year, it moves more than USD 40 trillion and nearly
23 billion electronic financial transactions, and currently supports Application programming interface (API)
more than 90% of the total value of all electronic payments in the An API is a set of functions and protocols for building application
US. As such, the ACH Network is now one of the largest, safest software, which defines methods of communication between
and most reliable payment systems in the world, creating value various software components and provides access to data of an
and enabling innovation for all participants. operating system, application, or other service.
114 PAYMENT METHODS REPORT 2018 • Glossary

Glossary
Arbitration Bank-as-a-platform
The process by which card companies determine whether an A strategy used to allow third parties to develop applications and
issuer or an acquirer has ultimate responsibility for a chargeback. services around the financial institution via open APIs. Banks,
Either member initiates his process after the re-presentment as such, become fully-fledged digital players, competing and
process is completed. Pre-arbitration, or second chargeback, collaborating for customer relevance in payment and information
occurs when the merchant disputes the initial chargeback of the services.
cardholder, and the cardholder does not agree with the merchant,
the situation resulting in the chargeback being disputed again. Back-end processor
A third party provider that offers communication and processing
Authentication systems to acquirers. The processing systems connect with the
A security measure designed to establish the validity of a trans interchange systems for clearing and settlement services for the
mission, message, or originator, or a means of verifying an indivi same acquirers. In some cases, the acquirer may act as its own
dual’s authorisation to receive specific categories of information back-end processor.

or transaction approval (in the case of plastic cards or payment
orders). Bank transfer

A payment or money transfer between two bank accounts.
Authorisation
The process of verifying if the cardholder has adequate funds Banking model
available against his/her line of credit. A positive authorisation The diversified means by which a bank helps a customer create
results in the generation of an authorisation code, the respective an operating account, make money transfers, pay pending orders
funds being set aside. The cardholder’s available credit limit is and sell foreign currency.
reduced by the authorised amount.
Banking sector
B The section of the economy devoted to the holding of financial
Bancontact/MisterCash assets for others, investing those financial assets as an advantage

The domestic debit card scheme in Belgium, which allows to create more wealth, and the regulation of those activities by
consumers to pay in real-time and guarantee payment to (online) governmental agencies.
merchants and businesses. Bancontact payments are immediately
debited from the consumer’s bank account, the seller’s account Beacon
being credited the following working day. Today, there are more A small Bluetooth device used by vendors, merchants, banks etc.
Bancontact/MisterCash cards in circulation (15 million) than to send information such as offers, promotions, coupons to the
there are Belgian citizens (11.3 million). No less than 99% of all mobile devices of (potential) customers passing by in close proxi
consumers know Bancontact/MisterCash and 86% of all payments mity.
by electronic card are Bancontact/MisterCash payments.
Bill payment
BIN (Bank Identification Number) Bank provided service that allows customers to receive and pay
The first six identification numbers that appear on a credit card, bills by means of a computer or a smartphone.
assigned by Visa/Mastercard, used to identify the institution issu
ing the card to the cardholder. Also known as Issuer Identification
Number (IIN).

Glossary
Billing and Settlement Plan Chip-and-pin payments

An electronic system designed to facilitate the flow of data and Chip-and-pin is a UK government-backed initiative to implement
funds between travel agencies and airlines. the EMV (short for Europay, Mastercard and Visa) standard for
smart payment cards. The name of this initiative stems from
C the presence of a semiconductor chip and associated circuitry
Card association in the smart card, which is used in tandem with a PIN (personal
A network comprising issuing banks and acquiring banks that identification number).
process payment cards.
In use, the smart card is placed into a PIN pad terminal or modified
Card-not-present (CNP) swipe-card reader, which accesses the chip in the card. The user
A card transaction in which the card is not physically presented enters a 4-digit PIN that is checked against the information stored
to a merchant at the time of the transaction. on the card. If the entered PIN matches the stored value, the
transaction is permitted to proceed.

Card scheme
A payment network directly connected to a payment card. A pay Clearing
ment card is a payment tool issued by the bank or the financial instit The process of submitting transactions to the respective card
ution that is member of the payment network (Visa, Mastercard). company (Visa, Discover, AMEX or Mastercard) for interchange
processing, the fourth in the seven stages of processing. This pre
Card verification value (CVV2) sentment of the transactions is also a request for payment in the
A unique 3-digit check value generated using a secure crypto settlement process.
graphic process that is indent‐printed on the back of a Visa card
or provided to a virtual account holder. Click-and-collect

The process by which the consumer orders online (click) and
Cash-on-delivery collects his merchandise at a local store. It is a compromise
Payment method in which payment (cash or by card) takes place between online and in-store shopping. The main benefits of click-
when goods are delivered. In Belgium, France and the Netherlands, and-collect for the consumer are saving delivery or shipping delays
it is known as ‘rembours’ or ‘remboursement’. and costs. It also saves time and prevents shopping in congested
stores. In some cases, click-and-collect may enable consumers
Chargeback who are afraid of online payment to pay at the collecting point.
A process in which the card issuer can call back a transaction
either in full, or in part. A chargeback often applies if a cardholder Closed-loop card/application

denies having performed a card transaction. In that case, the A credit or gift card that can be used only to purchases from a
issuer files an objection with the acquirer and demands that the single company.
transaction amount be returned from the merchant’s account.
Cloud-based payments
Checkout Enable users to perform NFC card emulation without using a
A checkout page is an ecommerce website page that a shopper hardware Secure Element (SE) in mobile handsets.
sees during the checkout process. Those wishing to purchase a
product/service will move through a series of checkout pages in
a systematic manner until the transaction is finalised.

Glossary
Collecting payment service provider (CPSP) Cross-border ecommerce

A technical intermediary between the seller’s website and one or International ecommerce, when consumers buy online from
more payment schemes, which collects the funds for one or more merchants located in other countries and jurisdictions. Online
payment methods. It takes away the programming complexity for trade between consumers and merchants, which share one
the online seller by only having to integrate with the collector’s common language and border or which make use of the same
payment platform. The collector takes care of the data processing currency, are not always perceived as cross-border by consumers.
to the applicable payment method scheme. In addition, the EU neighbours that speak a common language, united by SEPA,
collector collects the transaction funds for one or more payment are just one example.
methods, and settles the amounts often accumulated into the
merchant’s bank account. Cross-channel

Cross-channel implies merchants who interchangeably use
Consumer account multiple channels to market, sell, and interact with customers.
A deposit account held by a financial institution and established For instance, when a customer uses a merchant platform’s mobile
by a natural person primarily for personal, family, or household app to look at a product but does not complete the purchase,
use and not for commercial purposes. the merchant can use a cross-channel approach to remarket that
product by serving up ads for it even when the customer is on
Consumer behavior another channel or platform (say email or social media).
The process by which individuals search for, select, purchase,
use, and dispose of goods and services, in satisfaction of their Customer due diligence (CDD)
needs and wants. See also consumer decision making. Identification and verification of customers and beneficial owners.
Consumer data analytics Customer loyalty

The systematic examination of a company’s customer information A customer continuing to believe that a certain merchant’s product/
to identify, attract and retain the most profitable customers. service offer is their best option that fulfills their value proposition
whatever that may be. They take that offer whenever faced with
Contactless payment the purchasing decision. Customer loyalty is all about attracting
Payment transaction that requires no physical contact between the right customer, getting them to buy, buy more often, buy in
the consumer payment tool and POS terminal. The user simply higher quantities, and bring even more customers.
waves the contactless card in the proximity of the RFID-enabled
merchant terminal in order to scan the user account information. Customer reach
An estimated number of the potential customers that are possible
Credit card to reach through an advertising medium or a promotional cam
A card indicating that the holder has been granted a line of credit. paign.
It enables the holder to make purchases and/or withdraw cash
up to a prearranged ceiling; the credit granted can be settled in CVV

full by the end of a specified period or can be settled in part, with A unique check value encoded on the magnetic stripe and
the balance taken as extended credit. replicated in the chip of a card or the magnetic stripe of a Visa
card to validate card information during the authorisation process.

Glossary
D
Data Security Standard (DSS) or PCI-DSS Dynamic currency conversion (DCC)
(Payment Card Industry Data Security Standard) Dynamic currency conversion refers to the situation whereby the
A security standard for organisations that handle credit cards shopper is offered a choice to pay in either the home currency
from the major card schemes. The common standard is the result of the merchant or the shopper’s home currency. This offer is
of the collaboration between Mastercard, Visa and other card instantly generated by the PSP platform (often in conjunction
associations with the purpose of protecting cardholder data to with a DCC provider), as the DCC software recognises the home
reduce fraud. currency of the shopper based upon the first six digits of the card,
and results in a conversion wherein a mark-up has been included.
Debit card If conversion can be applied depends on the fact whether the
A plastic card linked to a checking or savings account. Offline- or DCC provider supports currency conversion for a particular
signature-based debit cards work in the merchant environment currency (otherwise the transaction is authorised in the merchant’s
the same as a credit card transaction and are not required to home currency).
be ‘online’ to the account balance. Offline signature-based
functionally work like credit cards; an initial transaction is used Under DCC regulation the mark-up applied (generally between 2
to hold funds and a second to settle or remove the funds from and 4%) should be clearly visible for the shopper and it should
the card balance. Online debit cards or PIN-based debit cards be up to the shopper to make a choice (no opt-out allowed).
ride over the ATM network; they require a PIN and the ability to The DCC mark-up (2-4%) can be shared between the merchant,
authorise against the actual balance of the card in a single step Payment Service Provider, DCC provider and acquirer. DCC
transaction. Prepaid cards fall into the debit category. allows merchants to mitigate processing costs by earning back
some of the commission if the shoppers decide to pay in their
Digital identity (e-ID) home currency.
A collection of identity attributes, an identity in an electronic form
(e.g. electronic identity). Direct carrier billing

It is a payment method for purchased items or services by
Digital single market charging the purchase to mobile phone account. At the time of
It is one in which the free movement of goods, persons, services checkout, the customer selects the mobile billing option on a
and capital is ensured and where citizens, individuals and busi smartphone and follows a two-factor authentication procedure.
nesses can seamlessly access and exercise online activities under After the authentication, the consumer’s mobile account is char
conditions of fair competition, and a high level of consumer and ged for the amount of the purchase, plus applicable taxes and,
personal data protection, irrespective of their nationality or place in some cases, a processing fee. Direct mobile billing does not
of residence. require any previous registration, and it does not involve any
other sources of funding such as credit cards or bank accounts.
Digital wallet
Also called an e‐wallet, is a digital tool (software or app) for consu Direct debit
mers to store their payment methods. It stores credentials of e.g. Pre-authorised debit on the payer’s bank account initiated by the
debit cards, credit cards, and alternative payment methods. Some payee.
e-wallets also store loyalty programs.

Glossary
Dispute transaction (card-based) eCheck

A dispute initiated by the cardholder. In the bankcard industry, An electronic version of a paper check often used to conduct
the dispute can be in the form of a chargeback. transactions over the internet.
Disruptive innovation Ecommerce

It is an innovation that helps create a new market and value net A way of doing real-time business transactions via telecommuni
work, and eventually disrupts an existing market and value network cations networks when the customer and the merchant are in
(over a few years or decades), displacing an earlier technology. different geographical places. Electronic commerce is a broad
The term is used in business and technology literature to describe concept that includes virtual browsing of goods for sale, selection
innovations that improve a product or service in ways that the of goods to buy, and payment methods. Electronic commerce
market does not expect, typically first by designing for a different functions on a bona fide basis, without prior arrangements
set of consumers in a new market and later by lowering prices in between customers and merchants. It operates via the internet
the existing market. using any combination of technologies designed to exchange data
(such as EDI or e‐mail), access data (such as shared databases or
Distributing payment service provider electronic bulletin boards), and capture data (through bar coding
It is a technical intermediary between the seller’s website and one and magnetic or optical character readers).
or more payment schemes. They take away the programming
complexity for the online seller by only having to integrate with e-IDAS
the distributor’s payment platform. The distributor takes care of The European regulation for the electronic identification and trust
the data processing to the applicable payment method scheme. services for electronic transactions. Since its announcement
in July of 2014, the intent of the eIDAS Regulation has been to
Dunning facilitate secure and seamless electronic transactions throughout
The process of insistent demands for the payment of a debt. In the the European Union (EU) by providing a regulatory environment
business context, it refers to the collections process, whereby a that would promote their use.
business communicates with customers who have failed to pay

their bills. e-Invoicing
Electronic invoicing is the exchange of the invoice document
E between a supplier and a buyer in an integrated electronic format.
EBA Clearing Traditionally, invoicing, like any heavily paper-based process, is
A bank-owned provider of pan-European payment infrastructure manually intensive and is prone to human error resulting in increa
solutions. The company was established in June 1998 by 52 sed costs and processing lifecycles for companies.
major European and international banks with the mission to own
and operate EURO1, the only privately owned RTGS-equivalent Electronic banking
large-value payment system on a multilateral net basis. A form of banking in which funds are transferred through an
exchange of electronic signals between financial institutions rather
e-Banking (online banking) than an exchange of cash, checks, or other negotiable instru
A method of banking in which the customer conducts trans ments.
actions electronically via the internet.

Glossary
Electronic direct debit European Payments Council (EPC)

A method in which purchasers issue the merchant with authori The purpose of the EPC is to represent payment service provi
sation to debit funds directly from their account for a cashless ders (PSPs) and to support and promote European payments
transaction (in online trading by confirming the basket of goods integration and development. The EPC is committed to contri
and in POS trading with their signature or PIN). The amount is buting to safe, reliable, efficient, convenient, economically balan
booked automatically from the consumer’s account and credited ced and sustainable payments, which meet the needs of payment
to the recipient’s account. service users and support the goals of competitiveness and
innovation in an integrated European economy.
Electronic funds transfer (EFT)

The paperless transfer of electronically recorded payment data with E-wallet
a monetary value in a specific currency, accepted by a customer/ See Digital wallet.
contractual merchant or a bank instead of cash as a means of pay
ment. F
Faster Payments
Electronic payments A UK banking initiative to reduce payment times between
Payments that are initiated, processed, and received electronically. different banks’ customer accounts from three working days
using the long-established BACS system, to typically a few
EMV hours. Many other countries are now adopting a similar model.
The international smart card standards group made up of Europay
International, Mastercard International, and Visa International. Financial inclusion

The ability of an individual, household, or group to access
European Banking Authority (EBA) appropriate financial services or products. Without this ability,
A regulatory agency of the European Union headquartered in people are often referred to as financially excluded.
the UK. It concerns itself primarily with banking regulation, but
has a mandate to develop technical standards for the security of Fintech (financial technology)
internet payments. New technology and innovation that aims to compete with
traditional financial methods in the delivery of financial services.
European Central Bank (ECB)

The central bank for Europe’s single currency, the euro. The ECB’s G
aim is to maintain the euro’s purchasing power and price stability General Data Protection Regulation (GDPR)
in the euro area. The General Data Protection Regulation (GDPR) was promulgated
by the European Commission in 2016, and comes into force on 25
EMA (Electronic Money Association) May 2018. The regulation is meant to strengthen and unify data
A European trade body representing electronic money issuers protection for individuals within the EU.
and other payment service providers. Members include elec
tronic money institutions (EMIs), payment institutions (PIs), banks
and payment schemes.

Glossary
I
iDEAL
iDEAL is an internet payment method in the Netherlands, based Today, only competition rules limit the fees set by banks and
on online banking. Introduced in 2005, this payment method payment card schemes, which are hidden from the consumer
allows customers to buy securely on the internet using direct and neither retailers nor consumers can influence.
online transfers from their bank account.
Interchange Fee Regulation (IFR)

In-app payments The European Parliament and the Council adopted the Interchange
Payments made from within mobile applications in order to pur Fee Regulation (IFR) on April 29, 2015. Many provisions are to
chase dedicated content like digital money, services or even take effect on different dates, arguably, the biggest change, the
products. interchange fee cap, came into effect on December 9, 2015.
Installment payments Interchange network

The payments whereby the cardholder is able to split a payment An electronic network maintained by the card companies that
into smaller transactions spread over an agreed period of time. exchanges data related to the value of card sales and credits
among issuers and acquirers.
Instant payments
According to the Euro Retail Payments Board (ERPB), instant pay International Bank Account Number (IBAN)
ments are electronic retail payment solutions available 24/7/365, Standardised international bank account number, consisting of
resulting in the immediate or close-to-immediate interbank clear account number, sorting code and prefix, for international pay
ing of the transaction, and crediting of the payee’s account with ment transactions.
confirmation to the payer (within seconds of payment initiation).
This is irrespective of the underlying payment instrument used Interoperability

(credit transfer, direct debit or payment card) and of the under A situation in which payment instruments belonging to a scheme
lying arrangements for clearing (whether bilateral interbank may be used in other countries and in systems installed by other
clearing or clearing via infrastructures) and settlement (e.g. with schemes. Interoperability requires technical compatibility between
guarantees or in real-time) that make this possible. systems, but can only take effect where commercial agreements
have been concluded between the schemes concerned.
Interbank
A transaction or exchange operated between banks. Issuer
Public and private companies that enter direct contractual relation
Interchange fee ships with consumers and/or businesses to maintain and service
When a customer pays for a purchase in a store using a credit such relationships through the issuance of one or more plastic
or debit card, the bank that serves the store (the acquiring bank) cards.
pays a fee to the bank that issued the payment card to the
consumer (the issuing bank). A so-called interchange fee is then Issuing bank
deducted from the final amount that the store merchant receives The financial institution member of the card companies that has
from the acquiring bank for the transaction. the responsibility of issuing credit, prepaid, corporate, charge
and debit cards to a consumer.

Glossary
L
Loyalty card Merchant bank
A brand – specific or retailer – labeled card that has cardholder A bank that is licensed as a member of Visa/Mastercard to pro
benefits tied to purchase amounts, usage, membership, or num vide merchants with an account and therefore allows them to
ber of visits. Benefits typically include coupons or discounts for accept credit cards.
future services.
Merchant identification number

M A unique number assigned to a merchant account to identify it
Market fragmentation throughout the transaction process.
Separation of a market that is relatively uniform into different seg
ments that have different preferences and demand patterns, each Merchant services provider (MSP)
requiring different marketing approaches.
A service provider that sets up an account on behalf of the mer

Marketplace chant and provides processing and report tools for accepting
An online marketplace/online platform is a type of ecommerce online payments. Each transaction is facilitated by the MSP on
website where product and inventory information are provided behalf of the merchant.
by multiple third parties, whereas transactions are processed by
the marketplace operator. Online marketplaces are the primary MetaToken

type of multichannel ecommerce. In an online marketplace, con A token that stays constant for a particular card number (PAN).
sumer transactions are processed by the marketplace operator MetaTokens give access to merchants who do not want card
and then delivered and fulfilled by the participating retailers or holder data in their system but they still want to maintain a relation
wholesalers (often called drop shipping). ship with the card for data analytics. These MetaTokens allow
merchants to analyse card usage for the life of the card. The same
Merchant account MetaToken will be returned each time a specific card is used
A type of bank account through which businesses can accept whether it is for a purchase, credit return, card-on-file, bill-backs,
debit and credit card payments. The merchant account is the recurring membership/subscription payment etc.
outcome of an agreement between an acceptor and a merchant
acquiring bank. Micropayment

A small amount of payment (under USD 20) that is particularly
Merchant aggregator popular for the sale of information and content online and consi
Is a service provider for ecommerce merchants that helps them dered a market for prepaid and stored‐value cards.
process their payment transactions. Under this arrangement, the
merchant can accept credit cards and bank transfers without Millennials
setting up a merchant account with a bank or card association, A name given to the generation born between 1982 and 2004.
the merchant being paid by the aggregator. The Millennial generation follows Generation X (1960-1980)
in order of the demographic cohorts. This generation is often
associated with technology and social media. Also known as
Generation Y.

Glossary
Mobile banking Mobile wallet

A financial service provided by a bank or a financial institution for A payment service that enables users to receive and send money
its customers using a mobile device (smartphone or tablet). The via mobile devices. For consumers, all the credit and debit card
software behind it (the app) offers the mobile banking service on information is available in one place. Mobile users then activate
a 24-hour basis. their mobile wallet on their mobile device by downloading the
provider’s corresponding app.
Mobile payments
Also referred to as mobile money, mobile money transfer and Mail Order/Telephone Order
mobile wallet. It generally refers to payment services operated The purchase of goods or services, with the purchase order issued
under financial regulation and performed from or via a mobile by phone or in writing by fax or using an order card.
device. Mobile payment is an alternative payment method. Instead
of paying with cash, check, or credit cards, a consumer can use M-Pesa
a mobile phone to pay for a wide range of services and digital or A mobile payments system based on accounts held by a mobile
hard goods. operator and accessible from subscribers’ mobile phones.
The conversion of cash into electronic value (and vice versa)
Mobile network operator (MNO) happens at retail stores (or agents). All transactions are autho
A telecommunications service provider organisation that provides rised and recorded in real-time using secure SMS.
wireless voice and data communication for its subscribed mobile
users. MNOs are independent communication service providers MyBank

that own the complete telecom infrastructure for hosting and MyBank is an e-authorisation solution that enables safe digital
managing mobile communications between the subscribed payments and identity authentication through a consumer’s own
mobile users with users in the same and external wireless and online banking portal or mobile application.
wired telecom networks. MNOs are also known as carrier service
providers, mobile phone operator and mobile network carriers. N

NACHA
Monetisation Abbreviation for National Automated Clearing House Association,
To monetise is to convert an asset into or establish something as an association that manages the development, administration,
money or legal tender. The term ‘monetise’ has different meanings and governance of the ACH Network, the backbone for the elec
depending on the context. It can refer to methods utilised to tronic movement of money and data in the US.
generate profit, while it also can literally mean the conversion of
an asset into money. For example, the US Federal Reserve can National Retail Federation (NRF)
monetise the nation’s debt; this involves the process of purchasing The world’s largest retail trade association, with membership
debt (treasuries) which in turn increases the money supply. This that encompasses all retail formats and distribution channels,
essentially turns the debt into money (monetisation). including department, specialty, discount, catalogue, Internet, and
independent stores as well as the industry’s key trading partners
Mobile point of sale (m-POS) of retail goods and services.
A smartphone, tablet or dedicated wireless device that performs
the functions of a cash register or electronic point of sale.

Glossary
NFC
A short-range wireless connectivity standard (Ecma-340, An overlay OBeP – third party (the overlay provider) who sits
ISO/IEC 18092) that uses magnetic field induction to enable between the payment network and the consumer. The provider
communication between devices when they are touched together, requires the consumer to share their online banking credentials
or brought within a few centimeters of each other. Jointly with them in order to have access to the consumer’s bank account
developed by Philips and Sony, the standard specifies a way for and to initiate the credit transfer to the merchant. Examples:
the devices to establish a peer-to-peer (P2P) network to exchange SOFORT banking (Germany), Trustly (pan-European).
data. After the P2P network has been configured, another wireless
communication technology, such as Bluetooth or Wi-Fi, can be Omnichannel

used for longer range communication or for transferring larger Omnichannel retailing is concentrated more on a seamless
amounts of data. approach to the consumer experience through all available
shopping channels, such as mobile internet devices, computers,
O brick-and-mortar, television, radio, direct mail or catalogue.

Online Banking e-payment (OBeP) scheme Retailers are meeting the new customer demands by deploying
The Online Banking e-Payments (OBeP) scheme is a type of specialised supply chain strategy software. Retailers using an
payments network designed to facilitate online bank transfers. omnichannel approach will track customers across all channels,
In an OBeP scheme, the consumer is authenticated in real-time not just one or two. In the brick-and-mortar channel, digitally
by the consumer’s financial institution. The availability of funds savvy consumers are entering stores already well-informed about
is validated in real-time and the consumer’s financial institution a product’s features and prices and expect store employees to
provides guarantee of the payment to the merchant in case the know more than they do.
payment is made as a credit transfer (push payment): i.e. the
consumer/buyer initiates the payment. The merchant receives Online Banking

a real-time guarantee so he can continue with the fulfilment See e-Banking.
process. The actual funds arrive later (D+1), according to the
SEPA Credit Transfer Scheme. Online payment

In the context of Internet commerce, it is a financial transaction
There are three types of schemes: between a buyer and a seller resulting from an Internet purchase
A mono-Bank OBeP scheme entails that a seller or Payment where the buyer has selected its payment method online goods
Service Provider has a separate connection to each participating and services are purchased over the Internet (whether through a
financial institution. browser or in-app).
Multi-Bank OBeP scheme – entails that a seller or Payment Service Online payment method
Provider has one single connection to the OBeP network in order It refers to the ways shoppers can pay for their purchases over
to accept payment from any participating financial institution. the Internet. Online payment methods rely on one of the five-
Brands: iDEAL (Netherlands) GiroPay (Germany), MyBank (EU), core payment instruments used to ensure the money flows from
ePS (Austria) and Bankaxess (Norway). buyer to seller: card payments, bank transfer payments, direct
debit payments, cash payments, and cryptocurrency payments.

Glossary
Online shopping (online retailing)

A form of electronic commerce that enables consumers to buy Qualification Requirements applicable to employees of PA-QSA
goods or services from a seller over the internet without an Companies that will conduct PA-DSS Assessments.
intermediary service. An online shop, e-shop, e-store, internet
shop, webshop, webstore, online store, or virtual store evokes the Payment Card Industry Data Security Standard
physical analogy of buying products or services at a bricks-and- (PCI DSS)
mortar retailer or shopping centre. The process is called business- Common security standards for merchants and third parties
to-consumer (B2C) online shopping. reached by Mastercard, Visa and other card associations with
the goal of protecting payment and card account data. The PCI
P Standard is mandated by the card brands and administered by
Pay-as-You-Go the Payment Card Industry Security Standards Council.
An unbanked, credit-poor, or noncredit customer who mostly
deals with cash. These consumers are targets for a prepaid card. Payment Card Industry Security Standards Council
(PCI SSC)
Pay later Originally formed by American Express, Discover, JCB, Mastercard,
A type of payment that refers to the fact that the money is collected Visa, its goal is to manage the continuous development of Payment
from the consumer later, usually after a statement is rendered. Card Industry Data Security Standard.
Payee Payment brand

Party (beneficiary) to whom a bill of exchange (such as a check or A payment brand refers to a consumer-facing brand that is directly
draft) is made payable. linked to one of the five Meta payment instruments, for example
Mastercard (card payments), ELV (direct debit payments) and
Payer Bitcoin (crypto-currency payments). When a shopper selects
A person or a party that makes a payment for products or services a payment brand, they instantly select one of the five payment
received to another person or party. instruments to complete the online purchase.
Payment Application Data Security Standard Payment flow

(PA-DSS) The clockwise transfer of money in payment for the counter-clock
A global security standard created by Payment Card Industry wise physical flow of goods and services. The payment flow
Security Standards Council. It aims to prevent payment applica is the monetary payment for goods and services received by
tions for third parties from storing prohibited secure data, such as the household sector from the business sector through product
magnetic stripe, CVV2, PIN. markets and the monetary payment for resource services obtained
by the business sector from the household sector through factor
Payment Application Qualified Security Assessor markets.
(PA-QSA)
Organisations that have been qualified by the PCI Security Payment gateway
Standards Council to perform PA-DSS Assessments for PA-DSS A mix of hardware and software which gives merchants the ability
Program purposes. PA-QSA Employees are individuals that are to perform authorisations from a website over the internet. It is the
employed by a PA-QSA Company and have satisfied all PA-QSA link between a merchant website and the processor.

Glossary
Payment instrument PIN (Personal Identification Number)

Payment instruments are an essential part of payment systems. A unique number used as an authentication method by the card
Payment instruments are used to ensure the money flows from holder when using debit cards at an ATM, point-of-sale or for
buyer to seller. online payments. Also used with some credit cards.
- Card payments
- Bank transfer payments Peer-to-peer payments

- Direct debit payments An online technology that allows customers to transfer funds from
- Cash payments their bank account or credit card to another individual’s account
- Crypto-currency payments via the Internet or a mobile phone.
- Direct Carrier payments
Point of sale (POS)

Payment method Point of sale (POS) or checkout is the location where a transaction
A generic way in which a payment method is carried out, for instance occurs. A “checkout” refers to a POS terminal or more generally
by PIN card, credit card, internet banking, COD, premium SMS. to the hardware and software used for checkouts, the equivalent
When a payment method is not generic but specific, it is called a of an electronic cash register.
payment product.
Point-to-Point Encryption (P2PE)

Payment page (checkout) A standard set up by PCI Security Standards Council, which
A Web-based payment page for simple and secure acceptance encrypts payment card data to prevent fraud.
of various payment methods. End customers input their data into
a website hosted by Wirecard to make online payments. The Pay Prepaid card
ment Page enables merchants to accept credit cards and other Stored-value card used to pay for goods and services, mainly
national and international means of payment such as direct debits, as an alternative to cash. Can be open loop or closed loop.
giropay, iDEAL, eps, paybox, paysafecard and others in a fast, Prepaid cards are sometimes disposable after the stored value is
secure manner with PCI compliance. exhausted or reloaded.
Payment processor Processing fees

A company (usually a third party) contracted by a merchant to The processing cost does only relate to the processing of data
handle transactions from various channels such as credit cards originating from the merchant’s website to the applicable financial
and debit cards from merchant acquiring banks. institution or acquirer after each transaction. Most often, they
charge a fixed fee per processed transaction between EUR 0.10
Payment service provider (PSP) and EUR 1.00. Depending on the Payment Service Provider, they
Service providers that enable web- and offline transactions for could charge for approved transactions, declined transactions,
merchants. PSPs aggregate various payment methods from vari authorisation or transaction reversals and refunds, for example.
ous acquirers into one contract and one technical interface for
merchants.

Glossary
Provisioning Reconciliation
Storing card data in NFC-enabled smartphones in order to be A message generated by an acquirer or an issuer, an originator or a
able to make payments using the mobile phone. The card data receiver, or a terminal and a processor of an electronic transaction
is stored on the SIM card or in a secure area of the smartphone. that advises the receiver of settlement information regarding
transactions processed between the sender and the receiver.
PSD (Payment Service Directive)

The Directive on Payment Services (PSD) provides the legal foun Recurring billing transaction
dation for the creation of an EU-wide single market for payments. A recurring payment that the merchant initiates automatically for
The PSD aims at establishing a modern and comprehensive set services or goods at a prearranged schedule. To initiate a recurring
of rules applicable to all payment services in the European Union. billing transaction, the merchant requires the cardholder’s per
The target is to make cross-border payments as easy, efficient and mission upfront only once.
secure as ‘national’ payments within a Member State. The PSD
also seeks to improve competition by opening up payment mar Recurring payments

kets to new entrants, thus fostering greater efficiency and cost- The payments whereby the merchant is able to charge the
reduction. customer’s credit card without involvement of the cardholder or
the need for the cardholder to re-enter credit card details when
PSD2 checking out. Recurring payments can service two business
The European Commission adopted a proposal for a revised purposes: to facilitate recurring billings (e.g. subscription based
Directive 2007/64/EC on Payment Services (‘the PSD2’) on 24 payments and utility bill payments) and to simplify checkouts for
July 2013. The main objectives of the revision are to promote returning customers.
better integration, more innovation and more competition in the
market for payment services within the EU. Returns

A sales return is merchandise sent back by a buyer to the seller,
Q usually for one of the following reasons: excess quantity shipped,
QR codes excess quantity ordered, defective goods, goods shipped too

A type of 2D bar code that is used to provide easy access to late.
information through a smartphone. There are static quick response
codes, which are used to disseminate information to the general Risk management
public and dynamic codes, which offer more functionality, such as The process concerned with the identification, measurement,
editing the code at any time and targeting a specific individual for control, and minimisation of security risks in information systems
personalised marketing. and payment systems to a level commensurate with the value
of the assets protected. Good risk management in the merchant
R programme requires meeting the challenges of reducing the
Receipt exposure to risk and responding quickly when risk arises.
A hard copy of the transaction given to the consumer. Also called Monitoring merchant activity with preset parameters allows the
sales draft receipt. transactions to be rejected for examination before potentially
incurring a loss.

Glossary
S Settlement bank
SCT Scheme A bank, including correspondent or intermediary banks, that is
The SCT scheme is an inter-bank payment scheme defining a authorised to execute settlement of interchange on behalf of the
common set of rules and standard procedures for credit transfers member or the member’s bank.
in euro.
Screen scrapping
SecureCode The process of collecting screen display data from one application
A Mastercard authentication solution for online payments. Part and translating it so that another application can display it. This is
of the 3-D Secure protocols, it standardises data infrastructure normally done to capture data from a legacy application in order
for passing cardholder authentication information among the to display it using a more modern user interface.
merchant, acquirer, and issuer.
SME
SEPA Direct Debit Mandate Small and medium-sized enterprises (SMEs) are non-subsidiary,
It is a payment method through which a merchant, authorised by its independent companies that employ less than a given number
customer, can collect future payments from its Euro bank account. of employees. This number varies across countries. The most
frequent upper limit designating an SME is 250 employees, as in
Single Euro Payments Area (SEPA) the European Union.
This is the vision, directive and goal of the European Commission
meaning that citizens and companies within the European Union Supply chain
have to be able to pay with a single set of payment instruments. The network created amongst different companies producing,
This set is the combination of a bank account and instruments handling and/or distributing a specific product. Specifically, the
like money transfer, direct debit and cards. SEPA signifies the supply chain encompasses the steps it takes to get a good or
end of international payments within Europe. service from the supplier to the customer.
SEPA payment schemes Surcharge

Simplified, the term scheme refers to a set of common rules In debit card usage, additional fees assessed to cardholders
and standards. In Europe, this is known as the SEPA payment by merchants and ATM providers. Merchants are sometimes
scheme. The SEPA Credit Transfer (SCT) and SEPA Direct Debit charged additional fees for nonqualified interchange transactions.
(SDD) Rulebooks contain sets of rules and technical standards
for the execution of SEPA payment transactions that have to be T

followed by adhering payment service providers. These rulebooks Transaction
can be regarded as instruction manuals that provide a common An act between a merchant and a cardholder that results in a
understanding on how to move funds from account A to account paper or an electronic representation of the cardholder’s promise
B within SEPA. to pay for goods or services received from the act.
Settlement Transaction number

The process of transferring funds for sales and credits between A unique password issued by the card-issuing bank, which is used
acquirer and issuers, including the final debiting of a cardholder’s in addition to the PIN as extra security to confirm a transaction in
account and the crediting of a merchant’s account. internet banking.

Glossary
Tokenization Velocity check

Is often used in credit card processing. The PCI Council defines A frequency check in which payment transactions are reviewed for
tokenization as “a process by which the primary account number repeating patterns within a defined (short) period. The check can
(PAN) is replaced with a surrogate value called a token”. be performed based on various data for a payment transaction
(e.g., if a certain pattern repeats during a period, or even appears
Turnover in clusters).
Sales volume net of all discounts and sales taxes registered on a
yearly basis. Verified by Visa

A Visa program to increase security and reduce fraud risks for
U online purchases. One of the 3-D Secure protocols, it works by
Unbanked connecting the merchant’s website to Visa in order to obtain
An umbrella term used to describe diverse groups of individuals the specified fields at the time of purchase. The values are then
who do not use banks or credit unions for their financial trans submitted with the authorisation request to verify whether it is an
actions. authentic cardholder purchase.
Underbanked Virtual assistant

Consumers either having a checking or savings account, but also A person who helps someone else – usually a business owner or
relying on alternative financial services. small business - with a variety of tasks from a remote location.
Universal Wallet API Virtual terminal

A digital wallet software developed by CardinalCommerce that Internet-assisted user interface for payment acceptance (inclu
allows merchants to use multiple digital wallets in their ecommerce ding via MOTO), which is used, for example, in call centres.
operations. Allows direct payment acceptance without signature by the pay
ing party. Risk management checks are performed in the same
V way as for online payments.

Value chain
A value chain is the whole series of activities that create and build W
value at every step. The total value delivered by the company is White label
the total sum of the value built up all throughout the company. White label refers to a product or service that is purchased
Michael Porter developed this concept in his 1980 book ‘Compe by a reseller who rebrands the product or service to give the
titive Advantage’. impression that the new owner created it. White label products are
often produced via mass production.
VAT
Consumption tax added to a product’s sales price. It represents a
tax on the “value added” to the product throughout its production
process.

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Innovations in the Way We Pay

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benefit from using crypto.

3 PAYMENT METHODS REPORT 2018 • MANAGEMENT SUMMARY

become more than just a platform for ecommerce payments.

around purchasing and re-purchasing can have important benefits.

used to bring frictionless experiences in store. ➔

4 PAYMENT METHODS REPORT 2018 • MANAGEMENT SUMMARY

US is dealing with the changes in the payment space.

payments hassle for B2C customers.

5 PAYMENT METHODS REPORT 2018 • MANAGEMENT SUMMARY

8 (Alternative) Payment Methods in Focus – Trends and Developments

33 Zooming into e-wallets – An East/West perspective

53 Innovations in the Way We Pay

6 PAYMENT METHODS REPORT 2018 • TABLE OF CONTENTS

62 Payment Methods Basics and Overview of How People Pay in Different

7 PAYMENT METHODS REPORT 2018 • TABLE OF CONTENTS

Trends and Developments

payments is just as important as the growth of e-payments.

payments landscape in the coming years.

contribute more to the growing economy.

services has never been stronger.

PSD2 and SEPA Instant Credit Transfers.

9 PAYMENT METHODS REPORT 2018 • (Alternative) Payment Methods in Focus

along with PSPs from Belgium, Malta, Portugal, and Sweden.

smartphones, without having to enter credit card details.

bank transfers, using e-mandate. ➔

10 PAYMENT METHODS REPORT 2018 • (Alternative) Payment Methods in Focus

phone is all they need to pay and interact with merchants.

summary and results are also enclosed.

the selected countries. ➔

11 PAYMENT METHODS REPORT 2018 • (Alternative) Payment Methods in Focus

how it can be in the future.

and the payments landscape remains as dynamic as ever.

Credit and debit cards

consumer didn’t update the details.

payments via connected devices.

12 PAYMENT METHODS REPORT 2018 • (Alternative) Payment Methods in Focus

computers and mobile devices.

money to their prepaid card.

pay on ecommerce websites by entering their username and password.

13 PAYMENT METHODS REPORT 2018 • (Alternative) Payment Methods in Focus

caused e-wallets to be the most popular online payment method in China.

higher transaction volume than e-wallets.

Government out of concerns for national security.

Online Banking ePayments (OBeP)

consumer’s account and initiate payments on their behalf.

infrastructure will be more accelerated. ➔

14 PAYMENT METHODS REPORT 2018 • (Alternative) Payment Methods in Focus

of OBeP as a payment method across Europe.

method with credit cards.

payments in the US.

15 PAYMENT METHODS REPORT 2018 • (Alternative) Payment Methods in Focus

by charging lower fees or by providing value-added services.

Invoice and Pay Later Solutions

merchant against bad credit).

processing capabilities in place to take advantage of the oppor

About ACI Worldwide: ACI, the Universal Pay

sentry. As digital authentication methods become more mainstream