Alternative Payment Types - Fraud Library

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Alternative payment solutions are payment methods merchants can offer to their consumers that don't require the use of one of the major credit card associations. There are a number of reasons why merchants and consumers are looking into alternative payment types. Fundamentally the market drivers are cost, security/trust and ease of use.

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Alternative payment solutions are payment methods merchants can offer to their consumers that don't require the use of one of the major credit card associations. There are a number of reasons why merchants and consumers are looking into alternative payment types. Fundamentally the market drivers are cost, security/trust and ease of use.

The most well known alternative payment type is PayPal, which has grown exponentially, and is becoming very much a mainstream payment method. If you research the market their are a lot of providers out there all competing for mindshare and marketshare. The risk for any merchant, is in adopting a payment type that will eventually die on the vine, due to lack of adoption.

Trust & Security

Consumers buying items online overwhelmingly prefer to pay by credit card today, but there are segments of consumers that do prefer to pay using something other than their credit card. Why? For some consumers, they still don't feel comfortable using their credit card to make a purchase online. Or, in some cases they may not feel comfortable giving their credit card information to a particular merchant.

Cost

Merchants pay a lot to accept credit card online, and when you add in the additional burden of fraud protection, these costs can be very significant. So when a merchant is looking at a potential new payment type, that is cheaper than credit cards, or it provides fraud protection, the financial savings can really change the bottom-line.

Ease of Use

More and more consumers are becoming power-buyers on the web, and for these consumers, any new tool that speeds up the checkout process is considered very "cool". Some alternative payment types will allow the merchant to streamline the checkout process, in some cases making it as simple as a logon for the consumer; increasing the stickiness of the site, and the satisfaction of the consumer.

Sample Alternative Payment Types

• electronic checks, ACH
• pay by phone, mobile phone
• pay by utility bill
• electronic wallets, stored value accounts,
• Extended terms, revolving accounts...
• Wire Transfer

Vendors

• Alipay, Amazon, BillMeLater, BSG Clearinghouse, eBillme, Fraud Practice, Google Checkout, PayPal, ebdollar, Xoom, Netcash, Neteller, eGold, Ikobo, Obopay, Paypay, 2CO - 2 Checkout

Articles

The-Rising-Tide-of-Alternative-Payment-Systems

Alternative Payments may Lower your Sales Conversion??

Blog: eBay getting pressure from Austraila on trying to force PayPal only payments

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