Beyond the realm of conventional payments and loans, APMs like Buy Now Pay Later (BNPL) and digital wallets offer a constellation of benefits. Price reduction alerts, personalized rewards, and product tracking redefine the payment ecosystem.
Fremont, CA: The payments landscape is undergoing a seismic transformation, with Alternative Payment Methods (APMs) emerging as a formidable contender. In international marketplaces, APMs have proliferated, prompting their ascent to the forefront of the payment roadmap. Notably, digital wallets have emerged as the preferred mode of payment for e-commerce transactions, propelling APMs into the spotlight.
A Glimpse into Emerging APMs: Leading the Payment Revolution
The Pursuit of Seamless Experiences and Rewards: The pandemic catalyzed a surge in demand for frictionless digital payments, underpinned by enriched experiences and exclusive offerings. Beyond the realm of conventional payments and loans, APMs like Buy Now Pay Later (BNPL) and digital wallets offer a constellation of benefits. Price reduction alerts, personalized rewards, and product tracking redefine the payment ecosystem. Merchant-owned applications amplify online engagement through features like order-ahead services, interactive loyalty points, and streamlined QR code-based checkouts.
Strategic Alignment for Enhanced Profitability: In an era of economic uncertainty and escalating operational costs, merchants seek payment providers who can catalyze revenue growth while optimizing payment acceptance expenses. APMs, particularly those facilitating Account-to-Account (A2A) transfers and closed-loop payments, present a lucrative avenue. By reducing conventional card-based processing costs and expediting merchant funding through novel instant-payment channels, APMs forge a competitive edge.
Diversification of Payment Revenue: The global APM market is a juggernaut, amassing a staggering $19 trillion in payment volume by 2022, with processing costs nearing $250 billion. While a portion of these costs’ fuels wallet funding through cards, the advent of A2A, BNPL, and other emerging methods poses a challenge to traditional revenue streams. Amid regulatory scrutiny and evolving payment preferences, payment providers must craft a diversified revenue strategy while safeguarding existing income sources.
Amid these transformative shifts, banks teeter on the precipice of market relegation, as top APM providers offer banking-like services, threatening brand prominence and market share.
In this context, incumbent banks must act swiftly to avert becoming mere background financiers as APM adoption skyrockets. Embracing novel digital payment alternatives opens doors to novel revenue streams and elevated customer engagement. The fusion of loans, rewards, and personalization within omnichannel frameworks, coupled with payment rail adaptability, promises to redefine the banking and payments narrative.
