Payment Methods Report 2020 Whats New in The Way People Prefer To Pay

Insights into Payments
Payment Methods Report 2020

What’s New in the Way People Prefer to Pay
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Payment Methods Report 2020
What’s New in the Way People Prefer to Pay
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Management Summary
The fifth edition of our annual Payment Methods Report brings out to our readers an extensive overview of what’s new in how people pay in the
most relevant ecommerce markets, while focusing on innovation and the latest trends – such as Account-to-Account payments, the upgrades
of e-wallets, the rise of super apps, buy now pay later (BNPL) and instalments solutions, click to pay for a new interoperable checkout, and
the acceleration of contactless payments driven by the COVID-19 pandemic.
With ecommerce growth being accelerated by the pandemic, it is key to get the right payment now more than it has ever been. According to
a Baynard study, in 2019, the average cart abandonment rate was 69%, while as per a Trustly report, 6% of shoppers report that they
abandoned an intended purchase because there weren’t enough payment methods.
So, what’s key in creating an optimised checkout to improve conversion rates? There are several aspects that every merchant or PSP needs
to consider for checkout optimisation and customer conversion. As Peter Moedlhammer from ACI Worldwide states, apart from a fast and
responsive website, merchants are urged to consider the guest checkout, as well as one-click payments or in-app payments, and ultimately,
alternative payment methods. Moreover, the 3DS 2.0 initiative is also key to streamlining the checkout process, through a frictionless consumer
authentication, thus driving conversion.
We’re dealing with a demanding generation that has its own criteria and expectations. Having in mind the generational shopping expectations
and the payment behaviours of Gen Z and Millennials, one can work on a payment strategy to tailor a high-converting checkout.
‘The Payment Methods Report offers relevant and progressive payment trends, helping professionals learn, benchmark, and adapt to industry
changes for future success.’ – Julie Fergerson, MRC CEO
By delving into this report, our readers will find:
• insights into A2A payments, Request-to-Pay, and Open Payments;
• how the COVID-19 pandemic influenced the payment behaviour with regard to BNPL, social commerce, cash, digital payments;
• best practices for a high-converting checkout;
• why the future of payments is digital-first: super apps, payment apps, and beyond;
• disruptive payment technologies and solutions that shape the way people pay;
• a countries’ research overview of payment methods and the latest developments.
Insights into A2A payments, Request-to-Pay, and Open Payments

Online Banking e-Payments are becoming increasingly important throughout Europe, not just in Sweden or the Netherlands, but all over the
continent, due to client demand, the availability of instant payment infrastructure, and regulatory support. As Ciaran O’Malley of Trustly illustrates
in his interview, consumers have started to see transactions beyond traditional banking, with neobanks and Personal Financial management
apps that facilitate seamless payments. For this reason, merchants should definitely consider solutions that offer A2A payments.
Request-to-Pay (RtP) pushes payment instructions from a biller to a payer and into the payment flow, making it easier to pay, and enables
accurate matching later, offering the appropriate online payment options – cards, e-wallets, [BigTech] Pay, as well as Online Banking e-Payments
such as iDEAL, EPS, Sofort, or PayWithMyBank. According to Jeroen Dekker of Serrala, PSD2 and Open Banking will also bring pay-by-bank
to other countries, with an RtP connecting a source system to the payer to their bank’s API. ➔
3 Payment Methods Report 2020 | MANAGEMENT SUMMARY

Management Summary
Open Payments are A2A payments initiated by a PSP directly from the customer’s bank account (with the customer’s consent) and credited to
the merchant’s account. An Aite Group research commissioned by Token – The Road to Open Payments – shows that there is great interest
from PSPs to offer PIS and enable financial institutions and merchants to offer Open Payments to end users. Large banks and acquirers report
that they will launch PIS in 2020.
How COVID-19 pushed digital transformation forward

The COVID-19 impact has shifted customer preferences, especially with regard to the use of cards, consumer lending, social commerce, and
digital transformation at large.
In-store, contactless cards seem to be the way to go from a customer perspective, but with new cashierless pay points and retailers offering
various benefits via mobile apps, mobile payments are clearly here to stay as well. As Guido Vermeent and Stijn Van Brussel of Payconiq state
in their interview, consumers and merchants will experience irreversible changes during and after the pandemic, with the payment experience
being more integrated into the customer purchasing journey, maybe even becoming invisible.
Ant Group adapted to the pandemic by employing ‘zero contact’ loans, digital coupons, or job-seekers mini-programmes. The rapid digital
transformation will accelerate the adoption of mcommerce and social commerce, with consumers looking for digital-first experiences and
merchants being urged to strengthen their omnichannel capabilities.
The pandemic has also made consumers find new ways to accommodate their budgeting and finances, and thus embrace even more the
benefits of BNPL options. We observe the spending trend has changed, and now consumers left plane tickets and vacations aside and started
to buy retail products, such as electronics or clothing and apparel. AfterPay’s research into the effects of the pandemic on ecommerce reveals
that the number of online purchases was up to 41% in the Netherlands, +22% in Norway, and +13% in Germany by the second half of July
2020, with fashion as the fastest-growing category since the start of the pandemic. What’s more, Gen Z is driving the popularity of BNPL
further – as a demanding generation, they look to avoid high-cost and long-term debts.
But where does cash stand in all this environment that gears toward increased adoption of cashless payments? The safety measures imposed
by the pandemic might determine significant gains in the legislative arena for contactless payments, as it already happens in the Nordics or in
India. On the consumer side, 57% of Germans use debit and credit cards now more than they did before the pandemic. A move to digital
payments is also noticed in Brazil or Italy, countries where cash was a top preference for in-store payments. On the business side, times are
challenging for small merchants. For small businesses and local providers, a move toward online payments is costly, which means that they
may not be able to keep pace with the current dynamic.
‘The future of payments is digital-first’

This is what Yannis Larios of Viva Wallet says, while explaining what technologies and solutions are needed to enable a cashless streamlined
environment. Wearable payments will be widely used in the future, powerful smartphones and tablets will become the NextGen POS, also
embedding tools for measuring customer satisfaction and customer loyalty schemes. The ‘digital-first’ disruption in payments will be the result
of the disengagement from legacy card terminals, with smartphones and tablets as the main devices for card acceptance. The digital-first
experience relies heavily on the payment apps, and if we take a look at the Asian market, we understand why these apps turned into super
apps. Their success is explained by the partnerships they make that enabled them to expand their offerings beyond the core services. Several
relevant examples are Grab’s integration with Hooq, a local video-on-demand service, Gojek’s agreement with major local production houses
to include entertainment services on its core-ride hailing platform, or Ant Financial’s partnership with Vanguard to bring investment advisory
services to retail consumers in China. ➔

Management Summary
Disruptive technologies and solutions that make innovation happen
The experiences provided by invisible, cashless payments rely on a powerful combination of expertise and technology. Discover Global
Network illustrates how the company engages with its fintech partners to ensure seamless and secure transactions through their payment
rails and platform.
Technological developments are enabling more convenient online payments that are also more secure. A good example is the ability for users
of Google Chrome, who store their card details in Google Pay, to verify their payment card details via face or fingerprint scanning. This is
made possible by the addition of FIDO on-device biometric authentication. Andrew Shikiar also points out that storing biometric data on the
user’s device and requiring incontrovertible proof of device possession will allow the payments industry to take advantage of the positive user
experience and security attributes of biometrics and move toward a passwordless future.
The PSD2’ SCA implementation is likely to drive increased adoption of biometrics – and considering the smartphone penetration in ecommerce
and banking, companies are rapidly leveraging biometrics for payments and money transfers. The in-store payments innovation is pushed
by card issuers that are further exploring fingerprint recognition for biometric cards, which is also a significant advantage for retailers, as they
don’t have to upgrade their terminals.
The global overview of payment methods and the latest developments

Local payment methods such as bank transfers, e-wallets, cash-based payments, and domestic cards are the dominant payment methods
globally, used in more than 70% of all consumer transactions. International credit cards only have a market share of around 23% worldwide.
We all know iDEAL in the Netherlands, but if an online shopper is from Germany, it would be recommended for the merchant to add Sofort,
Giropay, and a Pay by Invoice option to the checkout page.
It is, therefore, essential to know which are the preferred and local payment methods in a country you plan to expand to, in order to create
a smooth customer experience, increase conversion, and drive loyalty. To keep our readers informed in this area, we have dived deep into
specific markets worldwide, from the Americas and Europe to Asia-Pacific and Africa, to reveal the popular payment methods and the latest
developments from each country. Our readers will have the opportunity to learn, for instance, about the latest payment regulation from Sweden
that encourages consumers to rely less on credit cards and spend more via debit options. Our readership might be interested as well in what
triggers the rise of in-app payments in India, thus an emerging mobile-first society being formed.
This report has gathered the most recent trends, of which any player in the payments industry should be aware. The changes happening in the
current ecosystem cannot be missed, so we kindly invite you to augment your knowledge with opinions provided by great experts in the field.
We are those that take the pulse in payments and look beyond that. So, let’s have a look together!
Anda Kania | Senior Editor | The Paypers

Table of Contents
3 Management Summary
8 Payment Methods Featured – Latest Trends and Developments

9 Payment Methods: What’s New and What’s Next | Anda Kania, Senior Editor, The Paypers
13 Zooming Into Account-to-Account Payments

14 Request-to-Pay: From Real-World Solutions to Holy Grail | Jeroen Dekker, Solution Architect, Serrala
16 The Development of Online Banking e-Payments | Interview with Ciaran O’Malley, Head of Commercial Strategy, Trustly
19 iDEAL Innovation Made Easy With PSD2 | Rob Hoitink, Product Manager, iDEAL
22 Is This the End of the Card Payment? | Sarah Kocianski, Head of Analysis and Research Manager, 11:FS
24 The Road to Open Payments | Ron van Wezel, Senior Analyst, Aite Group
26 Digital Wallets – Shaping the Digital Consumers of the Future | Hianyang Chan, Senior Consultant, Euromonitor
28 The COVID-19 Pandemic – An Influencing Factor Into Ways People Pay

29 The Success of Pay Later Solutions and Consumers’ Preferences Across Europe | Interview with Johan Rönnerman,
AfterPay Leader, Arvato Financial Solutions, a Bertelsmann Company
32 The ‘Irreversible’ Changes that Consumers and Merchants Experience During the Pandemic | Interview with
Guido Vermeent, CEO & Stijn Van Brussel, COO, Payconiq
35 How Alipay Is Working with European Partners to Further Digital Payments Post COVID-19 | Jonathan Quin,
Head of Europe Strategy, Ant Group
37 Has the COVID-19 Pandemic Helped Increase Consumer Lending and Buy-Now-Pay-Later Payment Options? |
Mark Beresford, Director, Edgar, Dunn & Company
39 The Warp Speed of Mcommerce and Social Commerce Adoption During the COVID-19 Crisis | Grégoire Toussaint,
Director & Sophie Rassendirane, Manager, Edgar, Dunn & Company
41 Cash Usage Trends – A Method Under Siege in the Coronavirus Era | Ryan Tuttle, Consumer Finance Consultant,
Euromonitor
43 A New Era in Payments – Canada’s Digital Transformation During the COVID-19 Pandemic | William Keliehor,
Chief Commercial Officer, Interac
45 Responding to the Pandemic: Future Trends in Global Payments | Wei Zhihong, Market Director, UnionPay International
48 Checkout Optimisation and Customer Conversion

49 Moving With the Times – Best Practices to Keep Pace With Changing Payment Behaviour | Peter Moedlhammer,
Director Product Management, ACI
51 Customer Behaviour per Generations – What to Consider for an Optimised Checkout | Isil Ugurlu, Head of Payment,
elumeo
53 What Makes a High-Converting Checkout? | Andy Mulcahy, Strategy and Insight Director, IMRG
6 Payment Methods Report 2020 | TABLE OF CONTENTS

Table of Contents
55 The Digital-First Era – Payment Apps, Super Apps and Beyond
56 The Future of Payments is ‘Digital-First’ | Interview with Yannis Larios, VP Strategy & Business Development, Viva Wallet
58 Anatomy of a Super App in APAC – Factors Shaping Its Evolution | Joshua Chong, Analyst, Kapronasia
60 Digital Payments: A Strategic Evolution in the Context of Globalization | Andréa Toucinho, Director Studies,
Prospective and Training, Partelya Consulting
62 Disruptive Technologies and Solutions Shaping the Way People Pay

63 Global Networks and Fintech: The Future of Emerging Payments | Soumya Dev Chakrabarty, Director,
Business Development, Discover Global Network
66 Biometrics Can Be the Future of Securing Online Payments – If We Get It Right | Andrew Shikiar,
Executive Director and Chief Marketing Officer, FIDO Alliance
68 Developments in Biometric Authentication and Biometric Cards | Úna Dillon, Managing Director, MRC Europe
71 Payment Methods and Latest Developments – The Global Overview

72 Introduction
Europe
75 France
76 Germany
77 The Netherlands
78 Poland
79 Sweden
80 Spain
81 UK
Eurasia
82 Russia
83 Turkey
Americas
North America
84 Canada
85 US
Latin America
86 Brazil
87 Mexico
Asia-Pacific
88 China
89 India
90 Japan
91 Singapore
Africa
92 Kenya
93 Nigeria
7 Payment Methods Report 2020 | TABLE OF CONTENTS

Payment Methods Featured –
Latest Trends and Developments
New features of payment solutions have emerged and created not only a seamless experience for
consumers, but also a flexible option to pay. Request-to-Pay, Account-to-Account, and open payments
have empowered people to choose when and how they want to make a transaction – the benefits are
depicted in this chapter, along with the impact that these services may have over the whole industry.
As well, the COVID-19 impact has shifted customer preferences, especially with regard to the use of cards,
consumer lending, social commerce, and digital transformation at large.
The Paypers
Payment Methods: What’s New and What’s Next
About Anda Kania: Anda is doctor in Political Sciences, currently exploring her research skills to
discover the latest trends in the payment and commerce industry. Anda has used her position of
senior editor at The Paypers to analyse the hottest topics, and to discuss them with thought leaders
in order to get the pulse of the payments environment.
Anda Kania Senior Editor The Paypers
Apart from disrupting everyone’s lives, the COVID-10 outbreak Being able to leverage digital identity with state-of-the art identity
has also disrupted the payments industry, bringing a sea change authentication and verification techniques is a key aspect of invisible
among customers’ behaviour, while also making businesses to payments.
adapt immediately to something that one calls it ‘the new normal’.
Yet, even before the pandemic, the dynamic industry brought out Consumers want to be able to make purchases at the click of a button.
new trends in payments that have the greatest potential to shape However, they also want to be assured their payments are secure
the way people buy goods and services online and offline, gearing and their details are safe. In store, we are likely to see an increase
towards an increased adoption of cashless payments. in scan and go systems using an app on the mobile phone of the
consumer. In this paragraph we will list some of the methods.
In order to stay abreast of all the recent developments that also set
the scene for the payments’ future, a thorough overview is provided. Card-on-file
The noteworthy payment shifts illustrate the market reality as follows: Mastercard introduced the Mastercard card-on-file indicator in
• invisible payments convenience (purchases at the click of a button): 2018, for identifying transactions performed using stored payment
QR code payments, click-to-pay, card-on-file, biometrics; credentials. A similar action was implemented by Visa one year
• e-wallets turn into multifunctional services; before. This is a convenient way to pay for customers that don’t want
• the ‘buy not pay later’ (BNPL) option is submitted to new spending to insert their payment details every time they shop online either via
trends; mobile or desktop. With the great rise of card-not-present trans
• bank payment rails disrupt card networks; actions, this solution is very timely now to offer both secure and
• the future drivers of digital payments: convenience, cost, and reach. seamless payments.
Invisible payments The Click to Pay option

Food delivery and taxi services such as Uber and Gett are great Four card networks – American Express, Discover, Mastercard,
examples of invisible payments in the market today. By simply storing and Visa – have simultaneously implemented Click to Pay, accor
personal and financial information on an app, consumers can get ding to the new EMV Secure Remote Commerce (SRC) industry
from A to B, knowing they will be billed for this service. In these standard. What does this mean? For merchants, it means an efficient
scenarios, the shopping experience is not about money, but about checkout solution that offers multiple card brands for digital checkout
identity. The consumer ‘pays’ with his identity while checking in. in one integration. This option facilitates one-click payments for the
Whereas in the traditional model the consumer pays (card/cash) guest checkout. Consumers can enrol and register by entering
while checking out. their email address and phone number, with no need to setting up
an account. ➔
9 Payment Methods Report 2020 | Payment Methods Featured – Latest Trends and Developments
This feature aims to remove friction at checkout, especially for E-wallets become multifunctional
recurrent customers. For consumers, it means fewer steps at The FIS 2020 Global Payments Report predicts that e-wallets will
checkout, regardless of their payment choice, and the elimination of represent half of global ecommerce sales by 2023, while Juniper
laborious key-entry of personal account numbers and information. Research has found that by 2024, 50% of the world’s population
Several merchants such as Papa John’s, Rakuten, Tickets.com, will use e-wallets. Widely adopted by Gen Z and Millennials who
and more are among those offering consumers the new Click to look for cutting-edge digital features like around-the-clock access
Pay option. and personalisation, e-wallets are now improved with new features,
advancing the development of frictionless payments. Of hundreds
QR code payments of e-wallets worldwide, the most popular are Apple Pay, Google Pay,
This payment option was initially developed in Asia, with Tencent PayPal, and Samsung Pay, and of course, the super apps Alipay,
and Alipay making it available on the market, and had a tremendous WeChat Pay, Grab, and Paytm, which are well-known worldwide
success among Asian consumers. However, scanning a barcode and popular in Asia. So, what’s new about e-wallets?
to make payments in China could soon be a thing of the past, as
technology giants such as Tencent are now studying the use of Apart from constantly expanding their footprints, we have observed
facial and fingerprint recognition for such transactions. some patterns among the e-wallets mentioned above. These
companies have noticed that cryptocurrencies have a long-term
In any event, QR code payments have ‘travelled’ around the world, potential in the market, and for the sake of diversity, and in order
and many apps have now a QR code payments feature imple to keep people in their ecosystem, most of them entered the
mented, illustrating a wide adoption and demand. There is a recent cryptocurrency world, by enabling users to pay via this method.
use case to have a closer look at in Mexico. CoDi, a merchant pre Spend, a multicurrency digital wallet, integrated Apple Pay, and
sented QR code, was developed by Banco de Mexico and is directly more recently, Opera browser allowed US users to purchase
linked to the Interbank Electronic Payment System (SPEI), the cryptocurrencies via Apple Pay. Coinbase and Google joined forces
Mexican version of a real-time payment clearing system. With the to enable Google Pay users to make cryptocurrency payments,
growth of digital wallets in Mexico, this system might work, although while Visa card platform Swipe partnered Samsung to allow
smartphone penetration is rather low. Samsung Pay users to make payments from their cryptocurrency
debit card balance. Moreover, there were some rumours that PayPal
Biometrics and Venmo partnered to buy and sell cryptocurrencies, yet no
A report from Research Nester published, as global lockdowns confirmation followed them. However, according to official news,
began in February, forecasts that the worldwide market for biometric PayPal published a letter to the European Commission revealing its
payments will grow by 36 times from by 2027, surpassing USD plans of integrating cryptocurrencies.
15.5 trillion. Biometrics are a good element of convenience, hence
a good option for a seamless authentication. To name a few Furthermore, in a bid to increase loyalty and grow the customer
recent biometrics use cases: in 2018, BBVA launched a payment base, these wallets upgraded (or plan to) their services by rolling
method based on biometric technologies for restaurants that allows out payment cards. Apple Card was launched in the US; PayPal
customers to reserve a table, eat, and leave without even asking announced the launch of Venmo credit card; Samsung Pay Card
for the bill; Mastercard and Visa certified contactless biometric was announced in partnership with Mastercard and Curve; and
payment cards; Touch ID and Face ID biometrics are employed on Google launched a debit card payment function in Brazil through
Apple Card as well; Alipay upgraded its ‘Smile to Pay’ service to Google Pay. WeChat Pay has also integrated American Express
make the facial-recognition process more accessible to merchants credit card, the card network being the first foreign company to
and customers. receive this type of license. ➔
Super apps, which are a convenient way to pay with an all-in-one In any event, there is a variable that has changed amid the pande
experience, may also be included in the e-wallets category. This mic: the spending trend. If consumers used to take advantage of
trend is going on for several years. After an impressive kick-off the instalments to buy vacations and plane tickets in the past, now,
in Asia, supper apps, like Alipay, are now reaching European consumers spend more on retail products, such as electronics
markets. However, their success at a global level is now a question or clothing and apparel. What’s more, the Gen Z is driving the
mark, as Alipay and WeChat Pay, for instance, ‘migrated’ overseas popularity of BNPL further – as a demanding generation, they look
due to the travellers’ demand, but now with tourism downgraded to avoid high-cost and long-term debts. Therefore, if handled well,
amid COVID-19 pandemic, the payment behaviour is likely to this option could be a good budgeting instrument for them.
change in this matter. In any event, recent studies predict that the
super app revenue opportunity could reach USD 23 billion by 2025 According to Worldpay’s Global Payments Report: The pathways
In Southeast Asia. of people and payments, BNPL players will earn nearly 3% of
global ecommerce spend by 2023. In the last 12 months, several
Looking forward to European super apps, Klarna seems to strive companies launched: Laybuy, in the UK, ClearPay in Australia, and
to potentially become one – it started as a ‘buy now, pay later’ Alma in France. One shall see if the new players will be part of the
solution, and now it has a bank license, a marketplace style app aforementioned positive statistic, as clearly players like Klarna,
allowing users to shop at multiple merchants, and it recently entered AfterPay, or Affirm are likely to be.
into the savings market, focusing more and more in becoming
a consumer brand, while targeting both US and Europe-based Bigtechs have noticed the potential of BPLN so they also enabled
consumers. Revolut launched its ‘financial super app’, yet its the option for their users. Apple Card rolled out an instalments
functionalities stick to helping customers manage their finances, financing programme for Apple products purchases, Amazon has
and it doesn’t go into other aspects of people lifestyles (yet), like launched Amazon Pay Later in India, and Google Pay partnered
the other payment apps do. Regardless, if at some point super apps with Australia-based company Afterpay in the US.
will rise in Europe, it is likely for a digital bank to be the trendsetter,
as they have the right target group and infrastructure. So yes, BPLN options are here to stay, but not for spending splurge.
Considering a crisis that is likely to come along with the pandemic,
The BNPL options are here to stay consumers need ways to accommodate their finances, just as
Paying by invoice was initially a popular method in the DACH region, merchants need strategies for customer retention. But consumers
especially in Germany, with the ‘try first, pay later’ option offered by might be tempted to exploit this service and take on more debt they
catalogue merchants. Payments via instalments have been and still can handle, which might highlight a blind side of BPLN. Swedish
are an effective way to pay for goods in LATAM and Turkey. authorities, for instance, have noticed the overspending habit of
the consumers and voted a new legislation that forbids the pre-
At present, the adoption of this payment option now known as ‘buy selection of a credit option in the checkout if other non-credit options
now, pay later’ varies by country and region, depending mostly on two are available. ➔
factors: the solution providers that manage to dominate a specific
market and encourage consumers to use ‘pay later’, as Klarna does
in Sweden, or the customer behaviour driven by a developing
economy, like it happens in many countries from Latin America.
The way bank payment rails disrupt card Where cash used to be king, now is slowly fading. In Germany,
payments for instance, cash was ‘dethroned’ by cards after the COVID-19
European regulators’ initiatives fuel the rise of A2A payments, with outbreak, as 57% of Germans use debit and credit cards now more
Open Banking and instant payments driving the developments of than they did before the pandemic. A change to digital payments is
this payment method. also noticed in Brazil, India, or Italy, countries were cash was a top
preference for in-store payments. At some point, in-store shopping
In recent news, Worldpay has enabled A2A payments via an Open will bounce back, so even the smallest kiosk might need to have a
Banking Hub that allows consumers to pay for goods and services payment terminal.
directly from their bank account in real-time, without needing to
share their account details with a third party. This might lead to a However, we do know for certain that the winners will excel on the
new trend where the adoption of A2A payments might also be driven following three success factors:
by the Open Banking regulations that allow third parties to initiate Convenience. Payments become part of the mobile-first experience,
these payments on behalf of a customer, thus enhancing the custo and online payments are increasingly authorised from mobile phones.
mer experience. Now convenience goes beyond simple frictionless payments:
the concept is perceived as mixt-used services done smoothly.
The development of these projects is noticeable, as they plan to Solutions for recurrent customers are likely to emerge, to enable
disrupt the current ecosystem where credit card schemes play an consumers to store their payment credentials in their mobile wallets
important role. Several A2A payments methods worldwide have for easy access and less friction. Under SCA requirements, biome
already overpowered the cards services, like iDeal did in the trics-based payments are likely to rise, with banks supporting a
Netherlands, Swish in Sweden, Mobile Pay in Denmark, and Trustly seamless authentication with 3D Secure 2.0.
that is offering one integration to enable online banking e-payment
acceptance in multiple countries. Therefore, one needs to watch Cost. Money movement solutions will be further explored as a lower-
how card schemes will adapt to a new payment flow, as well as to cost and transparent alternative for processing payments and
what extend the consumers will embrace A2A payments in other as a revenue opportunity. This may also make card networks to
countries from Europe. reconsider their pricing structure and lower their fees, to keep a
traditional system that relies on card schemes. And with the rise of
If we look beyond Europe, in emerging markets there is a strong digital payments, businesses will look to embed affordable emerging
push for finding affordable solutions for underbanked consumers. solutions, such as online banking e-payments, also known as A2A
Government and central banks are building cost-effective infrastruc payments. On the other side, there is also a matter of cost versus
tures to facilitate instant payments as an alternative payment method. conversion – if a solution is expensive but converts better, that is
Good examples are PIX in Brazil – a system created by the Brazilian the option to go with.
Central Bank, and UPI in India – an instant real-time payment system
developed by the National Payments Corporation of India facilitating Reach. Payments represent a two-sided market, as providers need
inter-bank transactions. to be able to reach both merchants and consumers. Banks, GAFA,
credit card schemes, super apps seem to be best positioned here.
What drives digital payments further? Bottom line, consumers are reconsidering the way they pay, just like
In a world that has been brought to a point where we don’t even payment providers are reconsidering their services. Yet as bright as
know what the present holds, it’s challenging to have an accurate the future of digital payments might look, the world economy should
view on the future of digital payments, besides being sure that they shine like a star, so all these payment methods can stay relevant.
will continue to shape the payment behaviour.
Zooming Into Account-to-Account
Payments
• Request-to-Pay
• The Development of Online Banking e-Payments
• The Road to Open Payments
Serrala
Request-to-Pay: From Real-World Solutions to Holy Grail
About Jeroen Dekker: Jeroen Dekker manages the Solution Architect function for Serrala’s
Request-to-Pay and EBPP solutions. In this role he defines, articulates and delivers new and existing
capabilities and use cases to customers and the market at large. Jeroen is a career professional at
innovative international b2b software companies like NetEconomy, Fiserv, eVision and most recently
AcceptEasy, which joined Serrala in February 2020 after a decade of delivering Request-to-Pay
solutions to corporates.
Jeroen Dekker Solution Architect Serrala
Request-to-Pay (RtP) pushes payment instructions from a biller to authorised and money is on its way. Several populations benefit,
a payer and into the payment flow. This makes it easier to pay and including:
enables accurate matching later. Standards, networks, features, • Cash Management – has more and faster visibility into cash coming
channels, and payment methods aside – that is the essence of the in, which is key to optimising liquidity;
buzzword you have been seeing. We know, as we have been preaching • Operations (sales, fulfilment) – can offer faster service, releasing
and practicing it since 2008, starting in the Netherlands. This article orders and shipping goods as soon as confirmation comes in;
discusses the benefits, use cases, flavours, and success factors • Credit Management – can enable speedy service to small busi
for using this powerful and versatile concept that the industry nesses without credit;
is waking up to. • Dunning & Collections – avoids unjustified chasing and discussions
about the proverbial check being in the mail.
Reasons to adopt the core concept

RtP benefits everyone involved, from bean counters and customer Automated matching
success people to recipients. Crucially, pushing the source system’s unique reference (like an
invoice number) into the payment enables automated and success
Customer experience ful matching. That is almost a given with individual account-based
Instead of creating a bank transfer from scratch or writing a check, payments, but often it requires systems integration if a PSP takes
the payer simply authorises the predefined payment. From their bank care of the payment.
account or mobile wallet, whether the RtP landed there directly or
through an email or conversational inbox – no typing, no mistakes, Process automation & efficiency
just a few familiar taps or clicks with additional options like delay The basic concept already streamlines a lot, however codifying
or split, if enabled by the biller. common exceptions further eliminates scenarios previously handled
by phone calls and emails: asking for extra time, a payment plan, or
More payments faster objecting to the bill. Arming the RtP with a due date also enables
The convenience makes payers more likely to pay straight away, timely digital reminders.
and therefore not forget about it. In finance terms, this means lower
DSO, more cash flow, better working capital. Examples and use cases
Corporates in insurance, utilities, telco, automotive, housing, online
Real-time visibility retail, consumer finance, education, and more use our vendor
Done right, an RtP tells the biller in real time that the payment was version of RtP. Starting from ERP, CRM, AR, Customer Contact, ➔
14 Payment Methods Report 2020 | Zooming Into Account-to-Account Payments

or Accounting systems, they generate and deliver payment requests PSD2 and Open Banking will also bring pay-by-bank to other
for many purposes, such as: countries, with an RtP connecting a source system to the payer
• bills and invoices – via email and portal/app for the growing per to their bank’s API. If the EPC and Pay.UK initiatives succeed,
centage of people disliking the rigidity and lack of control of direct bank and other PISP apps become inboxes to directly receive and
debit or card-based autopay; pay requests from billers – whether those are corporates, small
• reminders – for unpaid bills or failed direct debits offering conve businesses, or individuals.
nient alternatives, clear due dates, and other options;
• customer contact – use cases for on-the-fly payments, whether Keys to success
in Customer Service (changes, upgrades, repairs) or Collections That last incarnation requires mass adoption by companies to
(promises to pay); deliver them directly into PISP apps, and by people to want them
• ecommerce – can leverage the direct account-based payments there. What comes first?
that the EPC RtP initiative is aiming for, while the broader concept On the biller side, the key ingredients to leverage any generation of
of reaching people with a payment link sees use cases like buy- RtP remain the same:
on-invoice, following up abandoned shopping carts, layaway 1. Source system integration: The RtP river starts in systems that
purchases, or asking for a down payment before shipping high- know Who needs to pay What, and by When. Can a company
value goods; effectively generate, deliver, and track batches of bills, invoices,
• touchless POS – has become more important because of COVID- reminders, or on-the-fly transactions during a conversation or
19, as whether by proximity (QR, NFC) or messaging (email, SMS, online purchase, at scale as an end-to-end process?
WhatsApp), an RtP reaches the consumer’s device without the 2. Choice and orchestration: PayPal from an email, Apple Pay from
need to touch anything else. a chat, pay-by-bank in a portal or directly into and from the bank
app. People have preferences, so corporates need something
The RtP evolution to offer customers choice and orchestrate across channels, use
First came the paper invoice, and then its digital equivalent (email / PDF). cases and payment providers.
Making the details scattered across the page usable for the 3. Trust and need: New ways to do things only get adopted if people
actual payment came with the payment link we popularised. The trust and need them on both sides. Does it solve a problem? Is
destination URL offers the appropriate online payment options – the solution secure? This requires technology, of course, but also
cards, e-wallets, BigTech Pay, but also local cross-bank account- education and communication.
based payment methods like iDEAL, EPS, Sofort (now Klarna) Request-to-Pay is available today to deliver most of the benefits
or PayWithMyBank. The process involves direct transfers, with touted by industry initiatives. Implementing it today also puts corpo
increasingly fixed fees,, which are irrevocable from the place where rates in prime position to quickly join network initiatives when they
most folks receive and keep their money. reach critical mass.
About Serrala: Serrala is a global B2B fintech creating more secure payments capabilities for every enterprise.
The company provides unparalleled end-to-end services from inbound to outbound payments. With offices around the
world and over 700 employees, we are proud to be a trusted solution provider to over 2,500 customers across industries.
In February 2020, Serrala acquired Dutch SaaS-provider AcceptEasy and its market-leading Request-to-Pay platform.
www.serrala.com

Trustly
Ciara O’Malley, Head of Commercial Strategy at Trustly, reveals the trends around Account to Account payments and their role in
improving the customer experience
About Ciaran O’Malley: Ciaran is the Head of Commercial Strategy at Trustly since 2016. He leads
teams responsible for value proposition, distribution strategy, pricing, and technical pre-sales
support. Alongside this, he has been involved in Open Banking in the UK and other industry
initiatives such as SWIFT’s Pay Later API standard. Prior to Trustly, Ciaran worked in investment
banking – firstly, at Credit Suisse as a Derivative Quant working on the implementation of CRD IV,
and laterally in Financial Institutions Mergers & Acquisitions at SocGen and Nomura.
Ciaran O’Malley Head of Commercial Strategy Trustly
Online Banking e-Payments are becoming increasingly more Moreover, customers are beginning to view banking as more than
important throughout Europe, not just in Sweden or the Netherlands, the bank or branch, as Neobanks and Personal Financial manage
but all over the continent Online Banking e-Payments have become ment apps are expanding how we interact with banks. Consumers
a preferred payment option for many consumers. We asked Ciaran are now familiar with using their bank account for other services,
O’Malley from Trustly, who provide Online Banking e-Payments a.k.a. such as Trustly. Thus, every merchant we speak to today is conside
Account to Account payments, about the development of Online ring a solution that offers Account to Account payments.
Banking e-Payments.
There are staggering drop-off rates at the checkout
What trends have added to the relevance of Account page of online stores: last year a Baymard study
to Account payments in recent years? showed that 7 out of 10 customers abandon the
There are two underlying trends driving the growth of Account to checkout process at the final step. How does Trustly
Account payments: convenience, and customer interactions with ensure a smooth customer interface that yields higher
banks. Convenience drives conversion, and a payment experience conversion?
with Trustly is secure and only requires a single fingerprint. This boosts Let’s dwell on abandonment: merchants invest so much to get a
conversion on checkout and satisfies the need for a better debit customer through the purchase process –advertising, promotions,
payment solution. UX optimisation, and a great product. Yet poor checkout conversion
damages the return on all these investments. If we compare the
experience of paying with Trustly with cards there are 2 stand-out
areas: new customer conversion, and frequent repeat customers.
Every merchant we speak

With cards, I need to enter my 16 digits, security pin, expiry, and perhaps
to today is considering a solution an additional billing address. I need to do this for every merchant.
that offers Account to Account Then I may need to enter a SMS OTP or fingerprint to confirm the
payments. payment. Whereas if I have used Trustly before with any merchant,
I simply select my account and fingerprint to confirm. This avoids
manual entry, which is crucial to achieve high conversion for mobile
payments. ➔

Furthermore, if customers need to update their card details, they Besides, you have to resource a maintenance team to keep up to
may well just abandon. With Trustly, your bank account doesn’t date with banks’ changing APIs or MCI to ensure reliable payments.
expire, so you will always be able to make that payment.
Moving on to backend processes, it is important to note that bank
Finally, it is also important to consider the impact of refunds on APIs alone are not a full payments solution like cards. They only allow
checkout conversion. Our research shows 65% of customers you to initiate a payment, what happens after initiation is outside
actively consider the refund experience when choosing where to of their domain. Two primary backend areas merchants should
buy. Therefore, with Trustly instant refunds, merchants can satisfy consider are refunds and reconciliation.
the customer’s need and increase conversion, without affecting
their cash flow. In order to facilitate refunds, you need to build your own automated
system to collect the bank account number and make a refund pay
With PSD2 and Open Banking in place, larger mer ment. Regarding reconciliation, bank payments don’t have a simple
chants and PSPs could potentially opt to develop settlement process and reconciliation like cards. This means that
their own Account to Account payment. Can you walk settlement times can be faster than cards, but the high amount of
us through the considerations of buying versus making variation between banks can cause issues. You need to build an
your own solution? integration into your own corporate accounts –which frequently
This is a dilemma faced by many merchants and PSPs. The logic don’t have an API – to be able to reconcile the payments and then
is seemingly sound: you build a direct integration to the APIs once maintain these.
and you have very low-cost payments. Unfortunately, there is quite
a lot more to offering a great Account to Account solution. Finally, bank payments aren’t guaranteed, so you need to build
a system to manage the risk of an initiated payment not settling.
There are 3 areas of additional investment: Unfortunately, there is no way to know which types of payments or
1. full bank coverage and maintenance; banks will have this risk until it happens. Merchants need to build up
2. backend processes; an understanding based on real losses, which may not be palatable.
3. payments risk. Furthermore, these lost payments cause reconciliation problems
and expose merchants to active customer fraud.
Firstly, many European banks will require integrations via the
Modified Customer Interface (MCI), which are significantly more Solving these questions is critical to extracting the benefits of
costly and require frequent maintenance. If you don’t offer all the Account to Account services. It requires specialist expertise, upfront
bank options, you will have lower conversion rates. investment, and maintenance beyond integrating the bank APIs.
About Trustly: Trustly is a Swedish fintech company that makes online bank payments fast, simple, and secure. Today, it
covers 29 European countries and the US. Trustly’s payment solutions attract global merchants in ecommerce, travel,
financial services, and more.
www.trustly.net
Click here for the company profile

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, United States
Industries Ecommerce, Travel, Financial Services, Digital Goods, Subscriptions, Online
Gaming
How it works You can pay with Trustly in 2 simple steps: 1. Select your bank account saved
with Trustly. 2. Confirm your payment by authenticating with your bank, using your
preferred method.
Potential reach All banked consumers across Europe and the USA
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, CZK, BGN, HUF, RON
Processing currrency EUR, SEK, NOK, DKK, GBP, PLN, CZK, BGN, HUF, RON
Currency available for consumer EUR, SEK, NOK, DKK, GBP, PLN, CZK, BGN, HUF, RON
Transaction volume 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
Link to the APM Database for more details https://thepaypers.com/company/trustly/104
Channels (POS/ecommerce) Online

iDEAL
iDEAL Innovation Made Easy With PSD2
About Rob Hoitink: Rob has over 20 years of experience in payments. At Currence, he is responsible
for iDEAL and eMandates.
Rob Hoitink Product Manager iDEAL
The combination of iDEAL and PSD2 could be a match made These earlier improvements required lengthy projects, taking a huge
in heaven: a strong digital payment brand leveraging the latest amount of effort from stakeholders.
regulatory standards for payment initiation to rapidly meet customer
demand for new payment options. One prominent improvement that consumers and merchants asked
for is a solution to schedule an iDEAL payment – especially for
iDEAL brand owner Currence teamed up with Online Payment invoices with a due date in the future, consumers want to schedule
Platform (OPP) to use the PSD2 APIs from Dutch banks for a new the payment date themselves. Implementing this solution in the
option to schedule iDEAL payments on a future date. OPP was the iDEAL protocol and migrating all stakeholders to this new protocol
first Dutch PSP to acquire a PSD2 license for payment initiation. was originally estimated to cost millions of euros and take years
to implement.
The launching merchant for this new iDEAL scheduling option was
the Central Judicial Collection Agency (Dutch acronym: CJIB). Faster iDEAL innovation with PSD2
When you get a speeding ticket in the Netherlands, the CJIB makes PSD2 allows third-party providers (TPPs) such as OPP to initiate
sure you pay it. It is a government agency with extensive experience payments from a bank account, with permission from the account
with iDEAL payments. holder. One of the options provided by most Dutch banks in their
PSD2 APIs for TPPs is the scheduling of an SCT payment. iDEAL
Continuous demand for innovative new iDEAL and OPP could leverage this option in the Dutch PSD2 APIs to
payment options rapidly develop iDEAL Scheduling, without changing the existing
iDEAL is the most successful payment method in Dutch ecommerce. iDEAL scheme and protocol and without the need for other iDEAL
An iDEAL payment is a single SEPA Credit Transfer (SCT), backed stakeholders to migrate their systems.
by a real-time payment guarantee. The brand has been established
in October 2005 – thus, in 2020 we celebrate its 15th birthday. We The pilot for iDEAL Scheduling was agreed between iDEAL, OPP,
are growing faster in 2020 than we did in the previous decade. and CJIB in December 2019. In early May 2020, the CJIB launched
iDEAL Scheduling on its website. Customers started using the
Furthermore, iDEAL is continuously improved, notably with mobile new option from day one. Without any PR worth mentioning, we
payments and QR codes, as over 80% of our payments are currently processed 10,000 transactions in the first three months. I think the
authorised using a mobile banking app. Therefore, iDEAL QR codes trusted iDEAL logo was all the PR we needed. ➔
allow users to initiate iDEAL payments in every environment and
every channel, providing a mobile payment experience.

What did we learn? In theory, with the mandatory PSD2 APIs from banks, other PSPs
We are currently evaluating the pilot with OPP and CJIB. These are could easily develop and launch a payment method similar to iDEAL,
our first learnings: without the burden of aligning stakeholders. There are currently over
70 PSD2 Payment Initiation Service Providers registered at the
1. Consumers like the solution, as 8 out of 10 users indicated they Dutch National Bank that could challenge iDEAL, but so far none
would use iDEAL Scheduling again. of these have launched a successful initiative. I guess the iDEAL
2. PSD2 APIs differ significantly between banks, and it takes quite some brand is so rock-solid that the resources and investments required
work to align the transaction states and flows needed to report to build a new competing brand are too much of an obstacle at this
a coherent status to the merchant that initiates the transaction. time. Nevertheless, iDEAL intends to accelerate its innovations and
3. Initially, the overall conversion rate was low, slightly above 60%, strengthen the brand to stay ahead of the pack.
far below the standard conversion rate of iDEAL.
4. Some PSD2 APIs require the payer to provide manually typed
credentials as they would with online banking in a web browser.
Consumers dislike this cumbersome authentication method in
comparison with the convenient mobile authentication they are
used to for other iDEAL payments.
Next step
Because users like iDEAL Scheduling so much, we intend to include
this option more rigorously in the existing iDEAL scheme and proto
col, bypassing the PSD2 APIs. We expect the conversion rate will
improve when consumers get used to iDEAL Scheduling – and with
a more convenient authentication.
Conclusion
PSD2 APIs provide the opportunity to quickly develop and launch
new functionality for iDEAL and test it in the marketplace. In the
long run, we want to evolve beyond the PSD2 APIs, as the iDEAL
scheme requires better control of the customer experience and
standards for messaging.
About iDEAL : iDEAL is the most successful omnichannel payment method in The Netherlands. The scheme management
of iDEAL is vested with Currence, product owner of iDEAL, iDIN, and eMandates.
www.ideal.nl/en

Type of payment method Online Banking e-Payment with SEPA Credit Transfer
Active since 2005
Operational Area Worldwide for merchants; consumers with a Dutch bank account
Industries All B2C industries and P2P
How it works After selecting iDEAL and their bank, consumers authorise the pre-filled payment
in their online banking portal or their mobile banking app. The merchant instantly
receives a payment guarantee. The funds are irrevocably credited by SEPA Credit
Transfer.
Potential reach 14 million consumers
Market Share 61% of all ecommerce payments in the Netherlands. No data available on other
industries.
Acceptance 126,000 merchants worldwide (in 60 countries)
Chargeback Risk No chargeback risk. Refunds can be easily initiated by the merchant.
Facts iDEAL is the digital payment method of choice for Dutch consumers. Starting in
ecommerce, it is now the payment method for all online payments, P2P payments,
ticketing, e-invoicing, charity donations, top-up, and others.
Settlement currency EUR, other multi-currency through specific payment service providers
Processing currrency EUR
Currency available for consumer EUR
Transaction volume 667 million transactions/EUR 53 billion
Implementation requirements Corporate bank account, Chamber of Commerce registration (at a minimum)
(non technical)
Reconciliation - Data field format (owner)
- purchaseID: maximum 35 characters (merchant)
- transactionID: 16-digit number (acquirer)
- amount: number with 2 decimals (merchant)
Pricing iDEAL is available via licensed payment service providers,
see https://www.ideal.nl/en/partners/acquirers-and-cpsps/
Link to the APM Database for more details https://thepaypers.com/company/ideal/100
Channels (POS/ecommerce) Ecommerce, mcommerce, app2app, paper-based, POS via QR

11:FS
Is This the End of the Card Payment?
About Sarah Kocianski: Sarah is responsible for generating unique, engaging, and insightful
research on subject areas across the finance and tech industries. She’s a regular host of 11:FS
podcasts, and frequently presents at global fintech conferences and events.
Sarah Kocianski Head of Analysis and Research Manager 11:FS
Card payments, either debit, credit or prepaid, are one of the most because fewer parties take a cut. They can be from one individual
ubiquitous global payment mechanisms. In few countries there is no to another (Peer-to-Peer or P2P), or between an individual and a
infrastructure for making card payments at all, yet in many others, business.
they are the most common way to pay.
The infrastructure underpinning A2A payments differs between coun
New payment mechanisms are already tries and regions. In many countries, national rails (or in the case of
encroaching the Eurozone, multinational rails) are in place to enable domestic P2P
As technology has developed so have payment mechanisms. payments. These can be used by individuals to pay merchants, but
In Europe we’re familiar with the concept of contactless payments for larger organisations, receiving A2A payments involves a complex
made via devices and NFC readers. In some parts of Asia and process, making such transfers unattractive.
Africa, payment methods relying on stored value accounts held
by and accessed through mobile phone networks have come to However, in some countries, the benefits of A2A payments have
the fore. Meanwhile, in Latin America, systems that involve digital spurred bank-owned schemes to simplify the process. In the
vouchers, cash, and groups of small retailers are widely used. Netherlands, the iDEAL payment system enables A2A transfers
between customers of participating banks and retailers, and it
None of these are as internationally recognised as payment cards already dominates the ecommerce sector. In Sweden, a similar
because in many cases they have evolved intricacies to suit the system called Swish, initially developed for P2P payments, has
specific needs of the region or country in question. And while the expanded to include commercial transactions. The drawback of
acceptance of individual card schemes may vary from place to bank-owned schemes is that they tend to be national or restricted
place, the concept of a plastic card that allows the transfer of value to use in a narrow region. Privately owned payment companies
is globally understood. have spotted the gap and stepped up – Trustly offers A2A payments
across the Nordics, select other European countries, and the US, for
However, there is another payment mechanism, already widely example. However, such offerings are relatively new, and traction so
adopted in some places, which has the potential to quickly achieve far is largely in countries where A2A is already widely used.
the same levels of international recognition as cards: Account-to-
Account (A2A). Why is now the turning point for A2A adoption?
Technology
What are A2A payments? Trustly and similar companies are enabled by the increasing
A2A payments are made directly from one bank account to another, use of external APIs that allow third parties to plug into financial
with no intermediary involved. That means lower cost transactions companies’ systems. ➔

These third parties deliver valuable services to bank customers Those third parties then need to get merchants and consumers
including moving money from their bank accounts on their behalf, using them.
using a more secure technology than alternatives like screen scraping.
APIs also allow financial institutions to gather valuable data about their It should be an easier sell to merchants as ecommerce booms
customers from other sources. globally and COVID-19 accelerates the trend. They have an impera
tive to enable online sales, and given economic conditions, to do
Regulation so cheaply.
In Europe, regulators recognised the increased competition and
greater value these third-party services could bring to customers, Customer adoption will be trickier as old habits die hard, so the
and so stepped in to enforce the creation of such APIs. The second benefits of A2A payments vs other methods have to be clearly
phase of the EU’s Payment Services Directive (PSD2) requires banks demonstrated. If the user journey is executed properly, the checkout
to build APIs that allow regulated third parties to access customer should be quicker and easier.
accounts and, crucially, initiate payments with the customer’s per
mission. Many other countries around the world are in the process Using A2A payments could also be cheaper for the customer, if
of bringing in similar rules. merchants pass on a percentage of the savings made by not paying
fees to schemes as an incentive. Banks and larger A2A payment
Economic circumstances providers could offer rewards to customers using A2A too.
As I write, the COVID-19 pandemic is ongoing. Consumers’ behaviour
and habits have changed dramatically, financial companies’ stability Ease of purchase and price are arguably two of the biggest drivers
is being tested, and many merchants are being forced to adapt behind whether a customer chooses a particular merchant over a
or die. Outlining the long-term impacts and consequences would comparable one, so these two combined factors will drive adoption.
involve an extended approach, but through the narrower lens
of this article the key points are that all parties will need to save Of course, there are countries where the percentage of people who
money, and remote commerce will be more important than ever. have accounts at formal financial institutions is low, presenting a
A2A payments can help everyone achieve these goals. hurdle to A2A adoption. Yet things can be facilitated in this matter,
by the continuing spread of technology-enabled solutions that offer
What’s next? financial accounts with more innovative providers.
As rules enforcing the creation of open APIs by financial services
companies come into force, we will see more third parties seizing Considering all the above, there’s every reason to believe A2A
the opportunity to build payment solutions on top of them. payments will become the next globally ubiquitous payment method.
About 11:FS: 11:FS is the challenger firm defining and building truly digital financial services. We’ve assembled the world’s
top banking, fintech and insurance leaders to transform traditional financial services from within, and build new truly
digital services from scratch. We field interdisciplinary teams bringing the best designers, product experts, consultants,
researchers, technologists, and domain specialists together to deliver tangible outcomes at speed.
www.11fs.com

Aite Group
The Road to Open Payments
About Ron van Wezel: Ron van Wezel is a senior analyst for Aite Group’s Retail Banking &
Payments practice. His research covers market and regulatory trends in the payments space, with
a focus on Europe.
Ron van Wezel Senior Analyst Aite Group
The digitalisation of commerce continues to drive customer demand • Financial services, e.g., money transfer, credit card repayments:
for new payment solutions that are faster, more transparent, less One promising use case is to combine PIS with AIS to obtain a
risky, and cost efficient. In Europe, payment initiation services (PIS) real-time credit score on a customer and provide instant loans at
will enable banks and other PSPs to offer open payment solutions the POS (POS finance).
to their corporate and SME clients. Open payments are account-to-
account payments initiated by a PSP directly from the customer’s Recent Aite Group research commissioned by Token (The Road to
bank account (with the customer’s consent) and credited to the Open Payments) shows that there is significant interest from PSPs
merchant’s account. Open payments are expected to take an to offer PIS and enable financial institutions and merchants to offer
increasing share of European payment volume as a result of trends open payments to end users. Large banks and acquirers report that
in client demand, the availability of instant payment infrastructure, they will launch PIS in 2020. The research also includes PSPs that
and regulatory support. are already actively offering PIS in business-to-consumer and/or
business-to-business applications (Figure 1). ➔
Open payment use cases can help companies to provide better
payment experiences, not only for ecommerce but also in other Figure 1: Bank and PSP plans to offer PIS
online environments – to replace legacy payment methods such as
bank transfers and checks. Examples include the following:
• High fee environments, e.g., travel industry/airlines, luxury goods:
Open payments enable high-value purchases (no risk), eliminate
chargebacks, and reduce cost.
• Repeat businesses with high velocity and returning customers:
Such businesses can offer loyalty programmes to convert
consumers to open payments.
• G aming/gambling industry: Clients are more used to a wider
choice of payment methods, as issuer risk policies limit the use
of cards. Open payments fit very well to the needs of this industry.
• Companies with an online presence that only accept debit payments
such as bank transfers, debit card payments, and checks: Using open Source: Aite Group interviews of 15 banks, PSPs, and payment
payments will improve the reconciliation of receivables, as the payment solution providers in Europe, January to March 2020
reference is automatically included. An example is property/rental
payments in countries such as the UK.

Outlook for open payments Figure 2: Provider view on strategic importance of open
Open payments is an emerging space right now. A number of factors payments
need to be addressed by the market to achieve adoption of open
payments, from both the demand and the supply side:
• Bank APIs are not standardised and technically not fully ready,
which makes it difficult to provide a consistent customer expe
rience for PIS providers. One PSP reports that it sees conversion
drop by as much as 50% when using APIs. In practice, this
means that existing PISPs continue to use direct access or screen
scraping rather than using bank APIs.
• How to educate consumers and influence a change in behaviour –
the user experience for open payments has to improve to reach
adoption at scale.
• There is no open payment scheme. Open payments would benefit
from a Pan-European brand and experience, rather than each Source: Aite Group interviews of 15 banks, PSPs, and payment
provider or merchant having its own brand and payment expe solution providers in Europe, January to March 2020
rience.
Ten out of 15 respondents indicate that delivering open payment
However, banks and other PSPs believe that these market inefficien solutions is strategic for them, serving large clients and developing
cies will be addressed over time and that open payments will reach new payment rails. Others are taking a more tactical approach by
mass adoption in three to five years (Figure 2). working with partners to develop PIS or add open payments as a
payment method to their gateway. Data also suggest that the large
banks, acquirers/PSPs, and payment networks are driving new
open payment initiatives, not the fintech startups. European banks
report that the demand from fintech companies to develop open
payments/PIS using bank APIs for end users (consumers, small
businesses) is low. This could lead to a scenario in which the existing
fintech providers of open payments (Klarna, Trustly) will get strong
competition from the large incumbents – a rather ironic outcome
given the intent of the PSD2 to support new players to compete with
the banks. 2020 will be a telling year in which this story plays out.
About Aite Group: Aite Group is an independent research and advisory firm focused on business, technology, and
regulatory issues and their impact on the financial services industry. Headquartered in the US, Aite Group works with its
clients as a partner, advisor, and catalyst, challenging their basic assumptions and ensuring they remain at the forefront of
industry trends.
www.aitegroup.com

Euromonitor
Digital Wallets – Shaping the Digital Consumers of the Future
About Hianyang Chan: At Euromonitor International, Hianyang is responsible for the research
output and client support for the services and payment cluster across the Australasia region, which
includes retailing, consumer finance, digital consumer, and food service. Hianyang continues to
write and present on the industries he covers in various publications.
Hianyang Chan Senior Consultant Euromonitor
The introduction of pre-paid, store, debit, charge, and credit cards Asia-Pacific leads the digital wallet revolution
represented sweeping changes that transformed the payments space. Asia-Pacific, except for Japan, contributes to the highest number
However, the era of plastic payment cards may be coming to an end, of active mobile users, according to Euromonitor International’s
as digital payments options gain popularity among consumers. Digital Consumer Survey. China, in particular, is leading the cashless
future. Key reasons explaining the popularity of their digital wallets
Only one-third of connected consumers globally report having include increased security, ease-of-use, convenience, wide
not used a digital wallet, according to Euromonitor International’s acceptance by merchants, government support to build an internet
Digital Consumer Survey, which was taken by 20,000 connected banking infrastructure, high smartphone penetration, and limited
consumers in March and April 2020. For purposes of this survey, a infrastructure and support for credit cards.
digital wallet was defined for respondents as a platform that securely
stores users’ payment information and relevant personal details to In the US and Europe, there is still a general reluctance to shift to
enable quick purchases. In the 20 countries fielded, digital wallet digital payments and some of the reasons to widespread adoption
usage among respondents was higher among emerging market include a long history of using plastic cards as the preferred pay
consumers, with 74% reporting having used one, as opposed to ment method, a slow uptake from merchants, and a lack of trust
52% of advanced market consumers. due to privacy and security concerns. It will be an uphill battle for
digital wallet operators to convince consumers to switch.
In emerging markets that were largely unbanked, high growth in
the smartphone penetration rate, the development of internet and However, the adoption of digital wallets is set to increase as there
mobile network infrastructure, and low barriers to financial information have been many technological developments to remove friction
and services have facilitated the transition from cash to digital wallets, from the shopping experience and reduce the pain points of existing
often bypassing the plastic card revolution. In contrast, plastic cards payments processes. Moreover, there is a generational shift that will
remained ingrained in the culture of many developed market consumers. help drive adoption rates in the Western markets. ➔
While there was a reluctance to switch, a growing, digitally adept
generation and improvements in speed and convenience – which
were demanded by consumers coupled with the advancements of
technology – have boosted digital wallet adoption.

While cost and legacy systems are some of the inhibitors to trans
formation, financial institutions, fintech startups, and technology
giants are re-thinking and re-inventing the global payment model
and incorporating it into their digital wallets to keep up with what
consumers want. Every operator would like to become the dominant
global payment solution, but that is unattainable and idealistic.
The COVID-19 pandemic has accelerated the adoption of digital
payments due to widespread fears of handling cash and touching
Source: Euromonitor International’s Digital Consumer Survey, surfaces such as PIN pads and touch screens. While habits of
March and April 2020 card usage are notoriously difficult to break, especially in Western
markets, this is rapidly evolving as consumers turn to digital wallets.
Changing consumer needs is giving way to In Asia, the pandemic has also allowed super apps such as WeChat,
new payment methods Alipay, Grab, and Gojek to further strengthen their foothold in the
In general, the changing needs of customers are demanding a shift payments space. Continual market campaigns and public education
in dynamics across how people pay. Within the consumer payments will be essential to help drive a permanent shift towards digital
industry, the younger consumers are turning away from credit and wallets.
opting for next-generation solutions such as buy-now-pay-later
platforms and super apps, for example. Given the increasing volume of shopping across borders, we can
expect companies across the entire payments process to not only
Increased mobility, resulting from globalisation, and constantly compete against each other but also create partnerships to leverage
changing technology have made the world more interconnected each other’s strengths to meet demands for faster and cheaper
than ever before. However, the ability to transact globally, also payment solutions. Alipay and WeChat Pay are some examples of
known as cross-border payments, is still an area that is lagging. companies doing that. While they have solidified their positions in
Cross-border payments are the foundation of global trade and their home market of China, they began exploring opportunities by
are increasingly a key factor in succeeding in the interconnected accelerating their international expansion strategy through partner
ecommerce market. ships with UK’s Barclaycard and selected overseas retailers to
expand their digital wallet to other markets.
About Euromonitor: Euromonitor International is the world’s leading provider for global business intelligence, market
analysis, and consumer insights. Our research solutions support decisions on how, where, and when to grow your
business. With offices around the world, analysts in over 100 countries, the latest data science techniques, and market
research on every key trend and driver, we help you make sense of global markets.
www.euromonitor.com

The COVID-19 Pandemic – An Influencing
Factor Into Ways People Pay
• Emerging Trends
• The Evolution of Buy Now Pay Later Payments
• The Future of Cash
AfterPay
Pay Later solutions are becoming increasingly popular: consumers are more likely to opt for ‘try first- pay-later’ solutions and like
to have the option to split payments. We spoke with Johan Rönnerman of AfterPay to learn more about consumers’ preferences
across Europe.
About Johan Rönnerman: Since 2018 Johan spearheads AfterPay’s journey from a local Dutch
payment hero to an international challenger. He holds over 20 years of international experience
working in the intersection between commercial, tech, and innovation. Starting his career within
Virtual Reality and robotics while spending the last two decades within digital and ecommerce for
retail, insurance, and banking.
Johan Rönnerman AfterPay Leader Arvato Financial Solutions, a Bertelsmann Company
Which trends are driving the growing popularity of (2) being able to return products before payment and (3) being able to
Pay Later solutions? Do you see any differences per postpone and split payment. Currently, around half of online shoppers
age groups? express at least one of these three needs. These needs are signifi
Key drivers for Pay After Delivery’s growth are consumers’ need to cantly larger among younger and progressive online shoppers, which
feel secure when shopping online, along with consumers’ need for means that these needs will likely increase over the coming years.
simple and convenient payments. The importance of security is also
underlined in our consumer research, where we see that it is online What has been the impact of COVID-19 on Pay Later
shoppers’ most important need. In fact, it is so important among online solutions and ecommerce as a whole?
shoppers that we call it a ‘hygiene need’. Drilling down into the concept COVID-19 has positively impacted the drivers for online shopping.
of ‘security’ reveals that the concept is two-fold: it is about offering Convenience is now the most important reason to make purchases
trustworthy payment methods as well as reliable delivery. online; and as consumers experience more uncertainty in their daily
environment, aspects of trust and security are getting even more
important. So, being able to use Pay After Delivery services – get
the products, try them and pay for them later – gives consumers
even more confidence. And of course, this also has a positive effect
on our business.
In our research regarding the effects of the pandemic on ecommerce,
we see that the number of online purchases is up +41% in the
Netherlands, +22% in Norway, and +13% in Germany, by the second
half of July. One can find these insights in analyses and forecasts on
our blog, AfterPay Insights. As of August 2020, we have surveyed
more than 31,000 consumers, and we continue to do so bi-weekly.
In which countries have you recently seen most growth?

And do certain verticals stand out?
In our Insights work, we obviously see that the travelling and ticketing
sectors are heavily impacted. On the other hand, online fashion is the
Characteristics of Pay After Delivery also tap into the overall needs that vertical that has grown the most since the start of the pandemic. ➔
online shoppers have: (1) the ability to try products before payment,
29 Payment Methods Report 2020 | The COVID-19 Pandemic – An Influencing Factor Into Ways People Pay
This growth has mainly come from consumers shifting from offline The trend of globalization in ecommerce is ongoing. More merchants
to online. No other category has shown a similar inflow of new aspire to serve the same consumers and this has for years driven
consumers: in the second half of March, 18% of online shoppers in up the consumer acquisition cost and the necessity for brands
The Netherlands and Germany had made at least one online fashion to shift from an acquisition focus to more of a loyalty approach.
purchase in the past two weeks, growing to 29% in the Netherlands At AfterPay, we are committed to helping merchants facilitate
and 25% in Germany by the second half of July. These findings are their brand experience and consumer relationships by building a
comparable to what we experience on a transactional level. complete journey, including payments, that supports their brand
values and positioning. How we do that? We put the merchant’s
brand in the driver’s seat, and we have the expertise and capa
bility to adopt processes for demanding merchants. This also
impacts the way we build a professional support organisation around
the merchants and how we drive innovation. In line with the more
international ecommerce landscape, reach is relevant. Due to the
regulatory differences for pay after delivery among European countries,
we currently do not see many providers that can operate in multiple
regions. AfterPay is active in nine markets, and we have a clear ambition
to expand. We are a business unit within Arvato Financial Solutions
that operates in 20 markets, and thus, has a strong track record in
operating internationally.
What is on your roadmap for the next two years?

Since 2010 we have been committed to helping consumers separate
the moment of purchase from the moment of payment. We enable
consumers to pay at the pace of life. This commitment stands and
We also see that ‘Heavy Shoppers’ drive a large share of ecommerce fuels the innovation pipeline of our 300+ team members who operate
growth: heavy shoppers make up 10% of all online shoppers, but from 13 different sites in Europe. The trend in which payments
they stand for about 40% of all online purchases. Another interesting and lending blend into banking continues, as well as the one
fact is that along with food and groceries, online purchases for pet regarding consumers and merchants wanting to reach payment
food have increased massively as well. parity, regardless of touchpoint and channel. The way we define
pay after delivery and how that experience plays out will continue
Due to the pandemic, we see more providers offering Pay to evolve fast.
Later solutions. How does AfterPay differentiate from

other solutions out there?
About AfterPay: AfterPay, a business unit within Arvato Financial Solutions, enables merchants to offer their consumers a
convenient and safe way of paying – AfterPay enables consumers to pay at the pace of life. Their Pay After Delivery product,
available in Central and Northern Europe, comes with five different payment options: the 14-Day Invoice, Campaign Invoice,
Consolidated Invoice, Fixed Instalments, and AfterPay FLEX.
www.afterpay.nl
Type of payment method Pay after delivery - pay on invoice, instalments, SEPA direct debit, aggregated
invoices e.g. monthly invoice
Active since 2010
Operational Area Central and Northern Europe: Germany, The Netherlands, Sweden, Belgium,
Austria, Switzerland, Norway, Finland, and Denmark
Industries All retail including travel and transportation
How it works Consumers complete their purchase, while not yet paying for the goods – this
can be done later when the consumer is certain to retain the products. AfterPay
then sends payment instructions to the consumer. They can pay via the
consumer portal/APP or via classical bank transfer. Consumers also have the
flexibility to pause a payment or convert it to an instalment plan.
Potential reach Over 100 million consumers across the nine markets
Market Share NL: 34% of shoppers have used a PAD solution in the past 6 months (and 18%
of all online purchases are made using PAD). 48% of shoppers express an
explicit PAD related need.
DE: 31% of shoppers have used a PAD solution in the past 6 months (and 10% of
all online purchases are made using PAD). 53% of shoppers express an explicit
PAD related need.
Chargeback Risk AfterPay carries the consumer risk if goods/services are delivered in line with
delivery and fraud policy.
Settlement currency Like for like (EUR, NOK, SEK, DKK, CHF)
Processing currrency Local currency (EUR, NOK, SEK, DKK, CHF)
Currency available for consumer Local currency
Implementation requirements Direct integration or integration via partners (PSPs or ecommerce platforms)
(non technical)
Reconciliation With each settlement, a reconcillation file is created that includes all references
needed for an automated reconciliation process.
Pricing Per-transaction processing fee (fixed amount) plus processing fee (variable
amount on the basket amount before or after returns). No setup fee.
Link to the APM Database for more details https://thepaypers.com/company/afterpay/163
Channels (POS/ecommerce) ecommerce (web and mobile), POS
Payconiq International
The Paypers interviewed Guido Vermeent and Stijn Van Brussel, Payconiq CEO and COO respectively, to discuss the
‘irreversible’ changes that consumers and merchants experience during the pandemic.
About Guido Vermeent: Guido Vermeent became CEO of Payconiq International in July 2020. He has
over 10 years of experience, leading the digitalisation of the banking and telecom payment industries.
Guido Vermeent CEO Payconiq
About Stijn Van Brussel: Stijn van Brussel became COO in June 2020. Stijn has over 10 years of
experience in product and project management, operations management, business development,
strategy, and leadership in the financial services sector.
Stijn Van Brussel COO Payconiq
With the use of cash dropping due to the COVID-19 Stijn Van Brussel (SVB): Many consumers have started looking for
pandemic, how have payment habits changed? alternatives to both cash and card payments out of personal health
Guido Vermeent (GV): Payment trends are strongly connected concerns. They found that mobile payment solutions with strong
to the shopping experience our consumers are after. There was customer authentication and biometric confirmation of payment
a significant push towards digital, as more people relied on offer a safe, yet smooth experience. What we’ve also seen in the
e/mcommerce channels during lockdown. These new behaviours Benelux area was an unexpected increase in money transfers to
they’ve developed during the pandemic are irreversible. They will family and friends during the lockdown. Although our consumers
keep using ecommerce for more of their small and regular trans had no more restaurant bills to split, they’ve started leveraging our
actions, which are simpler when coupled with mobile payment mobile payment solution in paying back neighbours for groceries
solutions. and sending money to loved ones in need.
GV: The demand for digital services will not slow in a post-COVID-19
world – on the contrary. Consumers expect even more value-added
The demand for digital services, innovation, security, and control in the way they pay.
services will not slow in a

How does Payconiq support consumers and merchants
post-COVID-19 world – on the
and add extra value for them in this competitive market?
contrary. Consumers expect GV: The beauty of our QR code-based payment app is that it’s
even more value-added services, available to everyone who has a smartphone and a bank account. It’s
simple, convenient, and secure. Moreover, because many consumers

innovation, security, and control
are reluctant on downloading and using payment apps, we even
in the way they pay. went a step further and made Payconiq directly available in several
mobile banking apps. ➔
We are already in the KBC and ING banking apps in Belgium, soon SVB: In Europe we have a long history of using cards. Contactless
we’ll launch ING and Rabobank in the Netherlands, and we have cards offer an excellent in-store user experience. Of course, with
similar projects for Luxembourg as well. It’s also part of our mission the self-checkout, grab-and-go use cases and retailers increasingly
to help the banks stay relevant in the payments sector. converging their online and in-store offerings through mobile apps,
this will change, and people will start seeing the true benefits of
SVB: When it comes to merchants, especially with the shift towards using mobile payments.
ecommerce, we help build smooth and convenient shopping
experiences across all channels (in-store, online, or on invoice). We With the wave of digitalisation currently sweeping
have recently concluded several partnerships with large European through so many industries, what are your predictions
payment service providers who will connect us to their retailer for 2020-2021 when it comes to the mobile payments
network, for a maximum coverage in the Benelux area. space?
SVB: From what we see, it will be the year of QR codes and their
GV: Indeed, because another element that consumers are wide adoption not just for payments, but for many more uses.
increasingly demanding is inter-operability between platforms We already see restaurants, for example, in Belgium and the
and mobile payment systems – and this is what we’re doing in the Netherlands, that minimise human contact with their clients by
Benelux area, through our own apps or partnerships based on APIs. sticking QR codes on the tables. The client scans the QR code to
We have built a strong payment platform that could connect the dots check the menu, then place the order and, at the end, pay the bill.
for the fragmented European market. With these evolutions Europe follows in the footsteps of Asia, where
this is already commonplace.
Which are the main barriers when it comes to mobile

payments expansion in Europe? GV: My expectation is to see the payment experience more inte
GV: Consumer behaviour and local habits vary across countries grated in the customer purchasing journey – maybe even becoming
and even within a country sometimes. Some markets fully embrace invisible.
technology, others are more conservative and cash loving. We
have countries that have been building their own national payment
methods, others that are completely dependent on cards providers.
Consumer and merchant adoption are closely linked, and they
equally influence the success of a payment method.
About Payconiq: With the support of major European banks, Payconiq streamlines mobile payments through an open-API
approach and omnichannel solutions. Today 75,000 merchants trust our secure, plug-and-play payment platform. Over
1.5 milion consumers use our apps for peer-to-peer, invoice, in-store, or online payments. Integrations in bank apps and
partnerships with international acquirers give Payconiq access to an even larger customer base.
www.payconiq.com
Type of payment method Omnichannel digital mobile payments
Active since 2014
Operational Area Belgium, Netherlands, Luxembourg
Industries Mobile payments/fintech
How it works Payments app, Integration in mobile banking apps
Potential reach N/A
Market Share N/A
Acceptance Merchants, P2P
Chargeback Risk N/A
Facts N/A
Settlement currency EUR
Processing currrency EUR
Currency available for consumer EUR
Transaction volume N/A
Implementation requirements Bank account, smartphone
(non technical)
Reconciliation N/A
Pricing N/A
Link to the APM Database for more details https://thepaypers.com/company/payconiq/102
Channels (POS/ecommerce) POS, ecommerce, invoice, P2P, in-app, app2app
Ant Group | Alipay
How Alipay Is Working with European Partners to Further Digital Payments Post COVID-19
About Jonathan Quin: Jonathan Quin is Ant Group’s Head of Europe Strategy. He was founder
and previously CEO of WorldFirst, a high-growth fintech that is making it faster, easier, safer and
cheaper for businesses and individuals to move money around the world. Jonathan co-founded
WorldFirst in 2004, after spending the earlier part of his career at Citibank and RBS. In February
2019, WorldFirst became part of the Ant Group.
Jonathan Quin Head of Europe Strategy Ant Group
COVID-19 has had a devastating impact on the world we live in, and These developments included SME lending, money market funds,
as we reflect on the pandemic’s catastrophic effects on human life, health insurance, and even an online program called Alipay Ant
the profound and long-lasting changes it will bring to economies Forest that encourages people to reduce their carbon footprint.
and industries are also coming into sharper focus.
‘Zero contact’ loans

One area where we can expect accelerated transformation is in Amid the coronavirus outbreak in China, we also introduced a series
the field of payments, and more broadly, financial services, as of technology-powered initiatives through the Alipay platform, to
social-distancing measures become a part of daily life. In Europe help small businesses and individuals who were among the worst-hit.
for example, payment habits have changed to become more digital
due to COVID-19 and these changes are likely to be permanent. One example was ‘zero contact’ loans which MYbank, an online
private commercial bank under Ant Group, launched in partnership
Transactions with mobile wallets in Europe doubled to 14% in with 100 Chinese banks to support 10 million SMEs, individual
the first three months of 2020 compared to 2019, and about businesses, and farmers across China. These AI-powered loans
three-quarters of Europeans surveyed don’t plan to give up their take three minutes to apply for on a mobile phone, approvals can
‘contactless’ usage even after the pandemic, a recent survey be given within one second, and the process can be completed
showed. In China, where digital payments were ubiquitous long with zero manual intervention (hence the ‘310’ name for Alipay’s
before the outbreak, e-wallets such as Alipay are becoming a lending model).
greater part of users’ digital lifestyle.
In February, Alipay’s online mutual aid platform Xiang Hu Bao, which
I believe the key to the successful adoption of mobile payments provides health pay-outs for 100 types of critical illness, added
and a digital lifestyle lies in smart applications of technology – be COVID-19 to its coverage and used blockchain technology to
it artificial intelligence, blockchain, or even the humble QR code. speed up payments while preventing fraud.
Technology can both improve an existing service or extend that
service. Improvements can make the payment process faster, easier, Other innovations included digital coupons, issued through the
and safer. Alipay app to help boost consumption as more businesses emerge
from the shutdown; as well as job seekers’ mini-programs, which
In a January report, Harvard Business Review described how are like mini-apps within the Alipay app through which those who
AI-powered software helped companies such as Ant Group expand have lost employment due to the pandemic can search for part-
its services beyond payments. time jobs. ➔
Understanding consumer preferences providers to serve consumers since 2012, including partnerships
How are these developments relevant for those of us in Europe? In the with Adyen and Klarna to provide payment solutions through the
midst of the COVID-19 lockdown in Europe this May, I joined an online ecommerce platform AliExpress.
panel, where we discussed how the pandemic is changing the global
payments landscape and how that will affect the future of financial This year, we also launched the Alipay Europe service as one of the
services in Europe. payment options available on AliExpress, to further enhance the
user experience when shopping online.
The panel moderator, author and fintech blogger Chris Skinner,
had also conducted a study on the topic, which concluded that Partnering in Europe
Europe’s payments market is still a fragmented one, providing In June 2019, we also started working with six payment partners,
significant potential for innovation and development. including Bluecode and Vipps, to develop a compatible and inter
operable QR-code format for users of these European e-wallets
– estimated at five million people.
Separately, Alipay has been working with local partners to connect
European merchants with Chinese tourists to enable seamless
payment experiences, as well as helping merchants increase sales.
Among the first was in Finland, where we partnered with local payment
provider ePassi and the country’s national tourism board Visit Finland,
in 2018, to enable local merchants to accept mobile payments.
Alipay partnered Finland’s national tourism board and local

payment provider ePassi to connect merchants in the Northern While global travel has been badly impacted by the outbreak,
European country with Chinese tourists hopefully, demand will eventually return – and Europe remains one
of the most attractive destinations for global travellers, especially
This means that companies need to be innovative in their solutions, those from Asia. After all, in past crises, tourism remained resilient
make sure they understand the preferences of European consumers, and quickly recovered, according to the World Tourism Organization
create products that best suit their needs, and, as mentioned above, of the United Nations.
make sure that they either improve the existing process or extend
the services available. For this reason, it is likely that businesses in Europe will soon reopen
and welcome global visitors again. Responsible technology companies
That understanding of local users’ needs is one of the reasons why can play an important part in that recovery, by introducing innovative
Alipay’s core strategy has been to work with local partners wherever payments and other digital services, bringing a better experience to
we operate. In Europe, we have been working with local payment consumers, as well as the merchants and SMEs that serve them.
About Ant Group: Ant Group is a leading provider of financial services technology and parent company of Alipay, China’s
largest mobile payments business. Founded in October 2014, Ant Group is also the organiser of the INCLUSION Fintech
Conference (www.inclusionconf.com/en), a world-leading fintech event held in Shanghai.
www.antgroup.com
Edgar, Dunn & Company
Has the COVID-19 Pandemic Helped Increase Consumer Lending and Buy-Now-
Pay-Later Payment Options?
About Mark Beresford: Mark Beresford is a Director at Edgar, Dunn & Company (EDC) and has
over 25 years of strategic consulting experience in the payments sector. He is responsible for the
company’s practice working with omnichannel merchants and payment service providers across the
globe.
Mark Beresford Director Edgar, Dunn & Company
The World Bank has warned that the coronavirus pandemic has In April 2020, the second month after COVID-19 containment
triggered the most widespread global economic meltdown since measures were implemented by most EU Member States, the
at least 1870, and it risks fuelling a dramatic rise in poverty levels seasonally adjusted unemployment rate was 7.3%, up from 6.5%
around the globe. Edgar, Dunn & Company (EDC) has a working in February 2020 (pre-lockdown). The EU unemployment rate was
hypothesis that there will be a larger increase in total consumer 6.6% in April 2020, up from 6.4% in March 2020.
debt, and we could be heading for a new financial crisis of crippling
consumer debt. What does this mean for consumer lending in the post-pandemic
world? Pre-crisis, we had seen a growth of instalment payments

Emerging from the lockdown, there are three main segments of and buy-now-pay-later options appearing across a wide range of
customers. The first segment consists of customers that have been retail sectors, from fashion, travel, to big-ticket household products.
able to remain employed and continue to work from home. The lack This was partially a result of readily available credit to consumers.
of family holidays, lack of commuting – and with a shift in spending Companies such as Klarna, Affirm and Afterpay are some of the
to essential items only – has meant that many households have leading players in this space. The following graphic only illustrates
been able to redirect available funds and repay their credit card a sample of the companies that allow consumers to buy goods
debts and other unsecured loans. or services from merchants and pay off those purchases in fixed
monthly payments over longer periods. The benefit of using one

The second customer segment is the group that was furloughed of these payment options is they don’t always charge late fees,
and saw a drastic fall in their household income. This segment has service fees, prepayment fees, or any other hidden fees. On the
to keep an eye out on their outgoings, ensure their household bills other hand, some providers will charge a fee if a payment is late or
are covered, and budget diligently. The need to take a mortgage if a repayment is missed. The APR loan interest rates range from
payment holiday or skip one or two full payments of their credit card 10% to 30%. ➔
balance would be predictable behaviour by this segment.
The third and final segment of customers were made unemployed
as a direct result of the pandemic, forcing businesses to shut down
or go into bankruptcy. This third segment consists of the financially
challenged.
Reduced disposable income of many individuals who have been
furloughed or unemployed and payment holidays taken on credit
cards and loans may have shifted some household spending to
credit cards. Countries with a lower average revolving credit before
the pandemic are expected to experience less change in consumer
behaviour, as shown by Italy, Spain, and Germany.
EDC has found the availability of buy-now-pay-later options has
significantly increased in most Western European markets, including
the UK, France, and Germany. Understanding customer spending
behaviour and holistically reviewing all the payment acceptance
arrangements, regardless of the payment method, and making sure
each element of your payment processing partners is working for
Providers, such as Afterpay and Klarna, are touted as a new way your unique business requirements are fundamental for any type
to pay and different from traditional credit products, such as a of merchant.
credit card. This is particularly appealing to younger consumers
who don’t have or want a credit card. By selecting these payment
methods, the consumer has a set period to pay back the amount
in three to four instalments, with no interest. Costs only incur if
the consumer fails to make repayments on time. Some of these
providers, including Afterpay, do not check the credit history before
the consumer applies, but they still reserve the right to report
defaults to credit reporting bureaus such as Experian or Equifax.
For merchants, struggling to encourage shoppers out of lockdown
and into their stores and to spend what they may not have, exten
ding consumer credit is an interesting proposition, allowing for sales
to drop straight to the bottom line whilst effectively outsourcing the
debt to third-party specialist providers.
About Edgar, Dunn & Company: Edgar, Dunn & Company (EDC) is an independent global payments consultancy, the
company is widely regarded as a trusted adviser, providing a full range of strategy consulting services, expertise, and
market insights. EDC expertise includes M&A due diligence, legal and regulatory support, fintech, mobile payments,
digitalisation of retail financial services, and ecommerce.
www.edgardunn.com
Edgar, Dunn & Company
The Warp Speed of Mcommerce and Social Commerce Adoption During the
COVID-19 Crisis
About Grégoire Toussaint: Grégoire Toussaint is a Director at Edgar, Dunn & Company with
responsibility for the Paris office and co-leads EDC’s Travel practice globally. Grégoire has more than
15 years of consulting payments experience with EDC in business strategy for financial services
clients in Asia, Europe, Middle East, and the Americas.
Grégoire Toussaint Director Edgar, Dunn & Company
About Sophie Rassendirane: Sophie Rassendirane is a Manager at Edgar, Dunn & Company
based in the Paris office. Sophie has more than 8 years of strategic and management consulting
experience, focusing on payments and financial services with a wide range of organisations,
including international card networks, banks, acquirers, large merchants on a variety of projects.
Sophie Rassendirane Manager Edgar, Dunn & Company
The COVID-19 crisis has expedited significant changes in Moreover, the pandemic has been a catalyst for the demise of
consumer behaviour. Mobile commerce and social commerce are cash payments, as social distancing measures have boosted
no exception, as the number of users has increased considerably the use of contactless payment methods in-store, via cards and
in only a few months. mobile wallets such as Apple Pay or Google Pay. In addition, many
countries have increased contactless card payment thresholds,

Initially considered a sub-segment of ecommerce, mobile commerce such as the Netherlands, where the limit doubled – from EUR
or mcommerce leverages the use of mobile phones and tablets to 50 to EUR 100. In France, contactless card transactions saw
purchase products and services online, and it has now become a an increase of 45% in June 2020 (compared to 2019), and
principal sales channel for merchants. The increased development Mastercard indicated that 78% of all transactions across
of innovative apps has paved the way for more mobile users of Europe were contactless in April 2020. This change in behaviour
social commerce, allowing merchants to leverage social media towards cashless payments has also benefited mcommerce and
platforms to promote and sell goods. Social media platforms (such social commerce, as consumers are more at ease with using their
as Facebook, Instagram, WhatsApp, and TikTok) and super apps card and/or phone to complete transactions.
(such as Line, Baidu, PayTM, and Chinese players Alipay, Tmall,
and WeChat) are major social platforms that have integrated social Merchants have also been forced to innovate and strengthen their
commerce capabilities. omnichannel capabilities. They have been required to rethink their
strategy to create new points of interaction, address consumers’

The COVID-19 pandemic has created an unprecedented global concerns, and facilitate a safe customer journey. Customers are
context that has encouraged innovation and enabled mcommerce indeed looking for a new experience online or in-store (click and
to strengthen its market position. The restrictions imposed to curbside pickup, for example). This is especially important in a
prevent the spread of the pandemic have promoted online context where limited physical interaction is becoming a new
ecommerce (although overall consumption has decreased), norm. ➔
creating growth opportunities for mcommerce. In certain countries,
such as the UK, mcommerce sales are expected to overtake
ecommerce retail sales by end of 2020.
Case study: social shopping across different which they can directly make purchases. This is an example of
platforms impulse buying directly linked to videos, which has potential to
Facebook introduced several options within its different be a successful future use case. Technological improvements
platforms to make purchases leveraging artificial intelligence will create innovative use cases
that merchants can build on to develop new strategies and sales
channels.
Mcommerce offers many benefits to both merchants and custo
mers. For example, merchants can target specific mobile centric
customer segments such as Millennials and Gen Z. It is also a
channel that merchants can use to provide additional convenience
to consumers, allowing them to purchase where and when they
desire, with a range of payment methods that meet their needs.
Source: Facebook Therefore, enhanced online experiences could challenge in-store
services (in-app customer service in Messenger of WhatsApp
• Facebook shops enable merchants to create an online shop vs. face-to-face customer service, for example). However, with
accessible within Facebook or Instagram with the look and feel the rise of digital payments, merchants will also face specific
of their brand. Customers can browse products, save carts, constraints, and they must comply with data protection
order, and pay – all within the app. and customer authentication measures. After the COVID-19
• Instagram also provides access to shoppable stories and posts crisis, the biggest change will not be what merchants, payment
with stickers, enabling customers to browse products and be service providers, and technology vendors have achieved in the
redirected to a merchant’s mobile website to finalise purchases. last few months. There has been a transformational change in
These examples illustrate how social platforms are supporting consumer behaviour as a result of the pandemic. This normally
commerce, leveraging their large customer base and the significant takes years, and in some cases it can take a generation to change
time spent on their platforms. Consequently, social commerce customer behaviour. What we have seen in the last few months
is expected to take an increasing share of ecommerce and mcommerce is a change in consumer behaviour – and the ‘new normal’ is
in the coming years. digital transformation. Customers will now increasingly expect
a digital-first and mobile-first customer experience, from
Alipay launched a livestream programme product search to self-service checkout. Social commerce is
Alipay has launched a programme that enables merchants to expected to develop at meteoric pace – and as more consumers
offer different incentives such as coupons or discounts during subscribe to platforms, such as TikTok, which has reportedly been
livestream advertising. Therefore, Alipay users can watch the downloaded over 2 billion times worldwide, entirely new customer
livestream advertising on the Taoboa channel via their app, during behaviours will emerge.
About Edgar Dunn & Company: Edgar, Dunn & Company (EDC) is an independent global payments consultancy.
The company is widely regarded as a trusted adviser, providing a full range of strategy consulting services, expertise,
and market insights. EDC expertise includes M&A due diligence, legal and regulatory support, fintech, mobile payments,
digitalisation of retail financial services, and ecommerce.
www.edgardunn.com
Euromonitor
Cash Usage Trends – A Method Under Siege in the Coronavirus Era
About Ryan Tuttle: Ryan Tuttle is a Consumer Finance Consultant at Euromonitor International.
His work at Euromonitor focuses on global trends and developments in cards, payments, and
lending. He has spoken at several industry conferences in recent years, including the Bank
Customer Experience Summit in Chicago and the Payments Summit in Phoenix, Arizona.
Ryan Tuttle Consumer Finance Consultant Euromonitor
2020 will likely go down as a watershed year for cash. While recent that is expected to play out across much of the globe, particularly
years have seen disruptive moments such as the Indian demoneti as consumers become more familiar with payment methods that
sation effort and the explosive growth of electronic payment platforms they may not have frequently used prior to the pandemic.
such as WeChat Pay and Alipay in China, the economic changes
wrought by Coronavirus (COVID-19) are poised to usher in a new epoch In addition to behavioural changes brought about by spread
for payments, one which simultaneously entices new users for cas concerns, social distancing shutdowns will unfortunately spell the
hless payments, while creating a more hostile environment for cash death knell for many small businesses and local service providers.
payments. Consolidation under larger corporate brands is likely to winnow out
a number of businesses that only accept cash, increasing the usage
COVID-19 concerns and disruption of the of card payments throughout economies. Coupled with the rapid
status quo uptake of online retailing and delivery services that have amassed
As COVID-19 began to take root outside China, news headlines new customers as a result of the pandemic, the opportunities for
trumpeted the potential for cash to serve as a carrier of the virus. using cash are expected to dwindle in many developed markets.
Efforts by Chinese authorities to disinfect cash and other nations to
quarantine inbound cash contributed to a growing public perception COVID-19 and the cash legislation clash
that cash may be unsafe for use – the science on this is heavily Prior to the pandemic, legislative and merchant efforts surrounding
contested and it is not immediately clear if cash does present a cash payments had already begun to clash in various jurisdictions.
legitimate threat of contagion. Regardless of the veracity of the Some retailers have launched cashless-only operations, which have
claim, governments, businesses, and individuals around the world simply done away with cash acceptance altogether. Meanwhile,
have increasingly taken steps to limit their exposure to physical several Nordic nations, as well as India, have instituted policy initia
currency out of an abundance of caution. tives that aim at easing a transition toward digital payments.
A critical market to track in determining the ultimate effects of These cashless initiatives have proven controversial in some markets.
COVID-19 on cash usage will be Germany. Notoriously reticent to Legislative backlashes have sprouted amidst the turmoil as cities
use card payments, Germans present a clear outlier in Europe, with such as Philadelphia and New York City mandate that merchants
26% of all consumer payment transactions in the country conducted must accept cash in their markets. Even among merchants, some
in cash in 2019 – against 21% conducted via cards. COVID-19 has have backed away from the cashless-only model amidst criticism.
prompted a rapid increase in the usage of contactless cards, with High-profile examples include the US restaurant chain Sweetgreen
surveys suggesting that the number of Germans making use of debit as well as the Amazon Go cashierless shopping system developed
cards has increased markedly during the pandemic. This is a trend by Amazon. ➔
The contagion concerns prompted by the virus may however serve as
a new theatre in the battle over cashless payment models. With local
governments increasingly active in mandating business practices to
limit the virus spread, it is possible that the push for contactless and
card payments will make significant gains in the legislative arena.
Contactless and digital payments at a crossroad

The general upheaval of day-to-day life in much of the globe has also
presented a major opportunity for digital and contactless payments.
PayPal for example unveiled a new QR code acceptance system for
merchants in May 2020 that is reminiscent of the highly successful
approach being adopted in parts of Asia. Printing a QR code
that allows consumers to pay without any physical interaction
is an attractive model in the COVID-19 era and is cheaper than
purchasing additional hardware.
COVID-19 also may prove to be a turning point for contactless card
and device payments. Many countries have raised the maximum
transaction value for contactless payments in the wake of the
pandemic. Notably, in the US, where contactless payments adoption
has been stubborn, the pandemic offers a significant opportunity for
growing usage. Merchants are already focusing significant attention
on contactless payment in their stores, educating both consumers
and employees on the technology. This awareness or education has
been a critical barrier to adoption in the past, as few consumers or
cashiers were aware of contactless capabilities. Initial results have
been significant, with networks reporting tremendous growth in
contactless payments in the first quarter of 2020.
About Euromonitor: Euromonitor International is the world’s leading provider for global business intelligence, market
analysis, and consumer insights. Our research solutions support decisions on how, where, and when to grow your
business. With offices around the world, analysts in over 100 countries, the latest data science techniques and market
research on every key trend and driver, we help you make sense of global markets.
www.euromonitor.com
Interac
A New Era in Payments – Canada’s Digital Transformation During the COVID-19
Pandemic
About William Keliehor: William Keliehor leads the commercial strategy at Interac. This includes
product management and strategy, payments solutions P&L, domestic and international client and
business development, fraud mitigation and strategy, product and brand marketing, communications
and government relations, and policy strategies.
William Keliehor Chief Commercial Officer Interac
Crisis situations are known to compress innovation timelines, and a new normal, with 40% more Canadians 65+ using the platform
COVID-19 hit at a pivotal moment in Canada’s digital transformation. between 17 March and 6 May 2020, compared to the same period
With foundational elements like digital access, merchant adoption, in 2019.
and issuer interoperability firmly in place, the physical distancing
restrictions and non-essential business closures that accompanied The shift away from cash and cheques is also reflected in the
COVID-19 accelerated a new era in payments, driven by the changing double-digit growth of Interac Debit for In-App and In-Browser
needs of Canadians and Canadian businesses. Payments since mid-March 2020 and the 5% increase in contactless
Interac Flash transactions since the initial spending dip for the
Crisis drives innovation, consumer expectation same period. Interac Debit for In-App and In-Browser continues to
accelerates it surpass forecast growth, largely driven by food delivery services
Interac data shows that since COVID-19 was declared a pandemic and restaurant take-out options as Canadians shift their behaviour
by the World Health Organization on 11 March 2020, Canadians in an effort to physically distance themselves.
have increasingly opted for secure digital solutions over cash and
cheques – and many for the first time. First-time Interac e-Transfer Businesses recognised the need to adapt to customer expectations
users grew 43% more when compared to user growth during the before the intense physical distancing recommendations came
same time in 2019, and the average number of transactions per user into effect during COVID-19. Once non-essential businesses were
in April 2020 grew by 9% over the year prior. forced to temporarily shutter their doors, that adaptability became
critical to survival. Those able to pivot and embrace customer needs
This increased usage contributed to a historical monthly high in remained in business. Suddenly, offering a frictionless experience
April with over 61.3 million transactions, cementing the Interac took on a whole new meaning.
e-Transfer platform as an essential means to move funds in near-
real-time for Canadians moving forward. As some emergency orders Now, customers are looking for more than just convenience. When
remain in place, traditional use-cases like splitting dinner tabs or trip making an online grocery order it must be fast. When paying for
reimbursement have been replaced with splitting grocery shopping it, it must be secure, contactless, and seamless. Retailers need
responsibilities with friends and neighbours, sending financial to embrace the disruption of this global pandemic and innovate
support to loved ones, or everyday small business payments. quickly to address Canada’s changing transaction habits. Even as
The growth in usage has been coming not only from the younger economies begin to open, Canadians are adjusting how they shop
demographics but also from seniors aged 65+ as they adapt to and discovering new payment channels such as mobile. ➔
A retailer offering a safe, quick, and omnichannel shopping Digital shift key to economic recovery
experience is likely to gain market share, while those retailers stuck There’s no doubt that COVID-19 is accelerating a digital-first
in pre-COVID-19 in-store experiences may be left behind. A swift payment ecosystem in Canada and beyond. We are in a leading
shift from retailers is in the interest of our overall economic recovery. position to transform based on our secure interoperable banking
infrastructure, digital penetration, and market readiness. We have
The changing role of good-fund transactions a chance to exemplify how a digital economic framework based on
With more than six billion transactions annually, Interac Debit is real-time, good funds can strengthen our economic recovery efforts:
a key part of the way Canadians transact, and we know that the businesses can operate faster and more efficiently, consumers have
consumer experience bleeds from one channel to the next. If a seamless experiences when transacting with businesses large and
consumer likes to pay a certain way in-store, they are more likely to small, and micro businesses can grow because of easy access to
choose that method of payment when shopping online or through ecommerce.
mobile, where available. Compound this with the current crisis and
overall economic uncertainty, good-funds transactions like Interac All of this adds up to an economy that is creating more value per
Debit and Interac e-Transfer become increasingly important to both capita. This is not an unexpected shift, and Interac has been building
consumers and merchants as a means to manage cashflow. the foundation for it. Our roadmaps have prioritised foundational
good-funds digital payment solutions like ecommerce and money-
Our analysis shows that small businesses have been receiving 35% movement solutions alongside contactless payment methods like
more Interac e-Transfer transactions than expected, suggesting Interac Flash and Interac Debit on mobile. Digital payments are
that the platform offers a convenient solution that allows them to an integral means to economic recovery in Canada and we will
adapt to the digital economy. For a business owner, the ease of continue to support Canadians and Canadian businesses on this
requesting, sending, and receiving money from anyone in Canada in journey through the digital use of their own money.
near real-time, as the Interac e-Transfer platform makes possible, is
an important component of maintaining a strong cash flow. It allows
payments to go straight to the account in near real-time, offering
immediate access to funds. This allows business owners to put their
money back to work for the business right away.
About Interac Corp.: Interac Corp. operates an economical, world-class debit payments system with broad-based
acceptance, reliability, security, and efficiency. Today, Interac solutions are chosen an average of 18 million times daily to
pay and exchange money. Interac has a diverse group of shareholders and nearly 300 financial institutions are connected
to our network.
www.interac.ca
UnionPay International
Responding to the Pandemic: Future Trends in Global Payments
About Wei Zhihong: Wei Zhihong graduated from Graduate School of the People’s Bank of China
with a PhD Degree of Economics, after he earned two Master Degrees at Loughborough University
and Southwestern University of Finance and Economics, as well as a Bachelor’s Degree in at Shanxi
University of Finance and Economics.
Wei Zhihong Market Director UnionPay International
Introduction
The spread of COVID-19 has created unimagined challenges for These measures not only help minimise the impact of the pandemic
societies around the world with businesses having to adapt to serve on people’s lives, but also bring customers to businesses.
their customers. As countries emerge from lockdown, it will be
important for payment companies to acknowledge the challenges Custom control procedures have been introduced in countries
merchants will face over the coming months. around the world, in addition to severe international travel restric
tions. Customers who are unable to travel abroad and make pur
Adjusting to the new reality chases while away, have switched to ecommerce platforms or
The reduction of in-store foot flow has significantly affected the individual online stores to meet their purchase needs. We expect
physical business and the economy in the European market. cross-border shopping habits and the demand for overseas
Industries more dependent on offline channels are having a harder products to achieve significant growth in the next few months as
time, however many businesses are actively adjusting to, if not customers become more comfortable with making purchases above
embracing, the new reality. In the long run, the pandemic is likely and beyond necessary essentials.
to be the impetus for these businesses to accelerate the integration
of online and offline payments, speed up digital transformation, The lockdown has also boosted demand for indoor entertainment
strengthen online promotion and apply new technology tools as with consumers spending more time and money on online video,
well as enhance their customer data resources. audio, and gaming platforms. For instance, transactions made
with UnionPay cards at the world’s top online game stores have
The stay-at-home orders required most consumers to purchase multiplied several times during the pandemic.
food, personal toiletries, and other daily necessities through online
channels. This has prompted many merchants to shift their sales As many countries ease restrictions and we return to more ‘normal’
channels online. Online transactions in areas such as food delivery times, offline shopping, especially in Europe, is very likely to remain
and public utility payments have also grown rapidly. dominant for many merchants as they seek to re-coup costs lost
during the pandemic and attract customers into their stores.
To meet consumers’ growing demand for online purchases, payment
companies are actively expanding their online network, allowing Yet it is important for businesses prioritising the high street to
customers to use their credit cards or electronic wallets with more examine the trends we have seen during the most severe lockdowns
merchants. For example, we have enabled more ecommerce and use that experience to embrace new technology, in order to
merchants to accept UnionPay, including partnering with Glovo, a create immersive online shopping experiences. ➔
fast-growing on-demand delivery service provider in Europe.
This might include re-adjusting their business strategy to create new We may also see the rapid expansion of electronic payments among new
experiences through content creation, VR (virtual reality) product groups of consumers such as the elderly, who have had to adjust to new
display, one-to-one online shopping appointments, and VIP delivery types of payments in lockdown. Once new habits are formed, the elderly
services. After all, merchants will have to focus on customer demand are likely to be loyal users of electronic payments.
and strive to meet the needs of new and returning customers to
improve their shopping experience. The retail industry will also more readily embrace new technology.
In China, for example, a large shopping centre enabled consumers
The longer-term impacts on business and society to buy from the merchants located within the mall using its official
Several new payment trends will emerge as a direct result of COVID- app. Shoppers could then access all the brands they wanted as well
19, including the rapid spread of cashless payments. Nations are as benefiting the merchants who were able to sell through the app.
reducing the use of cash or banknotes and promoting online and
mobile payments. Conclusion

COVID-19 has undoubtedly necessitated a hurried shift to every
Contactless payments, already common in markets like Australia thing that is digital and we have witnessed this also within the
and Europe even before COVID-19, are gaining steam in many payments industry. As countries start to emerge from lockdown,
more markets since the outbreak, in some cases with increased more consumers and merchants will embrace contactless and online
spending limits to boost their utility. For public transport in particular, payments. Payment companies will need to work with consumers
electronic payments such as contactless are likely to become not and merchants, striving to innovate and provide new digital and
only the preferred method of payment for consumers, but also technological solutions to ensure that we can continue to meet the
for transport operators, with many only accepting contactless changing needs brought about by the global pandemic.
payments to ensure front line workers avoid close contact with
transport users. In China, for example, metros of 34 cities and
buses of over 1,700 cities/counties accept UnionPay mobile
payments. UnionPay contactless payments is also accepted by
public transit networks in Russia, Southeast Asia, South Asia and
many more markets. In the short term, this helps prevent the spread
of COVID-19, and in the long term becomes much more efficient
for the operator.
About UnionPay International: UnionPay International (UPI) is a subsidiary of China UnionPay focused on the growth and
support of UnionPay’s global business. In partnership with more than 2000 institutions worldwide, UnionPay International
has enabled card acceptance in 178 countries and regions with issuance in 61 countries and regions. UnionPay International
provides high quality, cost effective, and secure cross-border payment services to the world’s largest cardholder base, and
ensures convenient local services to a growing number of global UnionPay cardholders and merchants.
www.unionpayintl.com
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Checkout Optimisation and Customer
Conversion
What’s key in creating an optimised checkout to improve conversion rates? We’re dealing with a demanding
generation that has its own criteria and expectations, and all these are revealed in this chapter. Having in
mind the generational shopping expectations and the payment behaviours of Gen Z and Millennials,
one can work on a payment strategy to tailor a high-converting checkout. Moreover, we discovered this
generation is digital first and looking towards the most convenient ways to pay, so experts reveal how the
industry can create unique experiences.
ACI
Moving With the Times – Best Practices to Keep Pace With Changing Payment
Behaviour
About Peter Moedlhammer: Peter, in his role as Director, Product Management at ACI, is
responsible for defining, positioning, and launching the company’s Secure eCommerce payments
solution. Bringing many years of product management experience in ecommerce and payments
to ACI, Peter’s primary focus is on how merchants and merchant intermediaries interact with ACI’s
ecommerce tools, platform, and value-added products (via the API) to create value and drive
business growth globally.
Peter Moedlhammer Director Product Management ACI
In 2019, we saw a few key trends that have shaped the ecommerce of the YouGov survey’s participants did more groceries online as a
and payments landscape: there has been an increase in mobile result of the pandemic.
commerce and payments, as well as cross-channel commerce.
Furthermore, we have seen that the rise of alternative payment Alongside more online shopping, consumers have adopted other
methods continued throughout 2019, creating a demand for mer shopping methods as well: according to the National Retail
chants to offer more payment methods. In 2020, the global pandemic Federation, 50% of consumers have tried Buy Online, Pickup In
has made it even more important to be able to quickly respond to the Store (BOPIS) as a result of the pandemic, and 90% prefer to have
changing market requirements on various levels: a service provider the option of curb side delivery.
needs to offer merchants the most relevant payment methods,
have a robust anti-fraud environment, and provide a seamless check The increase of online shopping goes hand-in-hand with an increase
out experience for the customer in order to drive conversion and in alternative payment methods, as we saw significant increases in
increase sales. the use of methods like PayPal, Klarna, ‘buy now, pay later’, and bank
transfers to pay online. Offering the right payment methods is key
Changing payment behaviour to increasing conversion: according to our research, 59% of
Payments have become increasingly digital for years now, and the customers abandon if their preferred payment method is not offered.
pandemic has acutely accelerated this trend: in July 2020, YouGov
surveyed 2081 UK adults about their shopping behaviour, and Thus, it is up to the payment provider to offer a broad enough spect
found that 63% of their participants have used more electronic rum of payment methods for merchants to be effective.
payments as a result of COVID-19. 63% of participants used
more card payments in general, and 80% used more contactless Fighting bad actors with minimal friction
card payments. Mobile payments are also on the rise: 24% of The growing ecommerce industry also brings with it new fraud-
participants indicated that they used more mobile wallets, such as related challenges: through data breaches and developing
PayPal and Apple Pay. technology there has been a long-ongoing increase in account
takeover fraud, and we saw that through the increase in popularity
Not only are customers using digital payments in-store, they are also of click-and-collect as a shopping method, as this type of fraud was
increasingly moving to ecommerce for their shopping. 2019 saw a the fastest growing fraud trend in 2019. The rapidly changing
15% increase in ecommerce payments value compared to 2018, shopping and payment landscape warrants a dynamic and multi-
and COVID-19 is further driving people to buy more online, as 21% layered approach to fighting fraud. ➔
49 Payment Methods Report 2020 | Checkout Optimisation and Customer Conversion

Machine learning (ML) models can be a key aspect of a modern anti- Thirdly, we have seen that enabling one-click payments through
fraud solution: as a merchant, you need to know who your shoppers card on file and tokenization for recurring customers, as well as
are and many anti-fraud mechanisms cause a lot of friction for the in-app payments can be highly beneficial for any online business.
customer. ML models can learn the difference between a good and Finally, it can be incredibly useful to offer a customer an alternative
a bad customer incrementally from historic data and thus provide payment method after their initial choice fails for some reason.
a smoother experience for shoppers, while not compromising Anything that you can do to retain the customer will be a good
security, which makes it one of the most promising technologies investment – improving the checkout to be more seamless can
out there. result in a 35.26% increase in conversion, according to research
by the Baymard Institute.
When selling to European consumers, there is another challenge on
the horizon: as of 31 December 2020, the PSD2/Strong Customer In conclusion, during a time where the shopping and payment land
Authentication requirement will apply, which will make merchants scape changes faster than ever, it is key to increase conversion by
liable for maintaining low fraud rates. It is the service provider’s offering the right payment methods, providing reliable authentication
task to enable the merchant to do this effectively and have a SCA- and anti-fraud services, and making the checkout as seamless as
compliant solution in place that utilises 3DS 2.0. 3DS 2.0 aims to possible.
reduce a lot of the friction brought about by its predecessor, and it
can be integrated with a variety of devices, thus driving conversion. For further information on how to offer a seamless check-out expe
In sum, the digital landscape provides interesting opportunities as rience and offer the most relevant payment methods, please contact
well as challenges for merchants. Service providers will have to us, and our payment expert will answer your questions.
support merchants by providing dynamic and multi-layered anti-
fraud solutions.
Seamless checkout
Finally, we cannot stress enough how important it is for online con
version to offer a seamless experience to your customers. There are
a number of things of which merchants and service providers need to
be mindful. Firstly, the website needs to be responsive and fast: lacking
this, the website will frustrate the customer and they will abandon.
Secondly, a merchant needs to provide the option of a Guest check-
out – having to create an account is a major reason for customers
to abandon.
About ACI: ACI, the Universal Payments (UP) company, is a leading global provider of real-time, any-to-any electronic
payment and banking solutions. 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 we enable the industry’s most
complete omnichannel payments experience.
www.aciworldwide.com

elumeo
Customer Behaviour per Generations – What to Consider for an Optimised Checkout
About Isil Ugurlu: Isil Ugurlu is currently working as Head of Payment at elumeo SE. She has
furthermore taken over an additional role as Money Laundering Reporting Officer in 2019. She has been
an active member of European Women Payment Network (EWPN) since 2018, fostering the network’s
presence in the German Fintech industry. She is initiating partnerships with leading organizations and
organizes meet-ups which cover not only the latest industry topics but also focus on matters like
diversity. After completing her Bachelor’s degree at Freie University Berlin with a focus on Business
& Managerial Economics, she completed a Master’s degree at Berlin School of Economics and Law,
focusing on Anti-Money Laundering regulations and recent developments in Europe.
Isil Ugurlu Head of Payment elumeo
Why convenience varies and matters invisible to many consumers, such as through reduced handling
One thing every retailer, especially in ecommerce, needs to costs on the retailer’s end followed by price reductions and/or
understand is the interpretation of convenience by their customers. additional sales. Considering newer publications by the German
Throughout different clusters of consumers, convenience has a Federal Bank, the importance of cost factor for payment selection
variety of definitions. Generation X customers (born between 1965 should not be overlooked. Interestingly, using cash in stores is still
and 1980) prefer sticking to traditional payment methods depending the fastest way of settling payment amounts of up to EUR 100 (ECB,
on local customs, such as invoice or cash in the GSA region, or 2015). Above that amount, card payments prove to be slightly faster
credit and debit card payments in France and the UK. Middle-aged in processing.
adults tend to adopt newer payment solutions. Studies show that
certain incentives such as discounts or waived delivery costs may In Germany, around three-quarters of retail transactions (15.6 billion)
allow additional convenience for short-term payment behavioural are settled in cash. This leaves average cash transaction costs at
change, and subsequently, allow for permanent behavioural change. just under EUR 0.24, while girocard and SEPA direct debit have
transaction costs of EUR 0.33 and EUR 0.34. Compared to these

However, as stated by the European Central Bank (ECB), noticeable ‘cost-efficient alternatives’ card payments with signature amount
effects on consumer payment behaviour, such as the adoption of to EUR 1.04 respectively. Given these statistics, retailers’ readiness
new payment solutions, would require a much stronger incentive. to digitise and adapt newer solutions will vary.
One example of this is the shift towards contactless payments
during the 2020 COVID-19 pandemic, in which customers were When it comes to convenience, however, change and optimisation
prompted to avoid traditional cash payments, therefore potentially remain crucial topics. A broader perspective beyond payment is
altering payment behaviour in the long run. crucial to a longer lasting and effective retail strategy when aiming
for a better customer experience. A research from 2018 shows

Regardless of demographics, speed, and payment security that customers’ shopping experience is not only influenced by the
remains important to retail consumers’ decisions to adopt and selection of payment options. To many, free returns are essential:
use payment solutions. Nevertheless, factors such as convenience 50% of customers state that lack of free return service is the most
and cost will most likely always be at the centre of consumers’ annoying issue in their shopping experience and 60% said they
payment decisions. Factors such as indirect costs may remain would avoid shopping at a retailer with such policy. ➔

While offering goods and services to a variety of customers, retailers Therefore, an online retailer’s strategy should not only be shaped
should bear in mind that generational issues not only apply to custo by the pre-selection of payment service provider’s standardised
mer’s shopping behaviour but also affect their expectations for a agreement, but by the individual needs of their customers.
checkout flow. Baby Boomers (born between 1944 and 1964) are less
trusting and harder to please. On the other hand, Gen Z (born after In this day and age, considering the variety of generational shopping
1997) is more receptive to marketing messages as well as more social expectations and individual payment habits, the payment landscape
and impulsive. For example, social media purchases are more appealing has moved beyond simple cash or card transactions. ‘The customer
to them. Furthermore, Millennials (Gen Y; born between 1980 and 1997), is always right’ statement can be translated today as ‘the customer
now making up the largest consumer generation, demand payment has the final say in however retailers maintain their payment accep
options that fit with their digital lifestyle. Retailers must adapt to tance’. Hence, innovation is channelled by customers and their
these rapidly changing shopping habits. Further studies show, individual needs.
while 39% of people between 25-34 years old can imagine opening
a fully digital bank account rather than banking traditionally, this The secret recipe for a successful payment strategy must lie in
perspective is shared by only 7% of consumers over 65 years old. streamlining customer experience in online checkout procedures.
Similarly, the successful checkout rate of retailers will rely on different The personalisation of custom-fit offers and services advanced by
variables such as payment security and general convivence of the better use of data is the way to a highly functional and appreciated
experience (see Eurostat’s recent Europe-wide research below). customer experience in online retail.
About elumeo: elumeo is a leading European company specialising in the production and sale of a wide range of gemstone
jewelry. Founded in 2008, it combines the tradition of age-old handcraft with the cost benefits of electronic sales channels
www.elumeo.com
About EWPN: EWPN is a not-for-profit organisation dedicated to building a community for women in cards, fintech & payments
in Europe. As the first and only Pan-European community for women, EWPN strives to create more opportunities for women
and minorities, as well as being a champion for a more diverse and inclusive industry for all. EWPN does this by organising local
networking evenings, workshops, annual events, awards and research, which all are welcome to be involved in.
www.ewpn.eu

IMRG
What Makes a High-Converting Checkout?
About Andy Mulcahy: Andy has worked at the heart of the online retail industry since 2010 –
researching and producing reports on trends and developments affecting the sector. During that
time, Andy has developed strong knowledge in multiple areas, with particular expertise in Black
Friday.
Andy Mulcahy Strategy and Insight Director IMRG
Ecommerce teams work very hard to ensure site visitors don’t The structure tended to vary greatly – while some have single-page
come up against any unnecessary barriers in their progress towards checkouts, others have as many as six pages – but there were
completing a purchase. From the point that they land on the site, points of consistency.
there is a huge number of options for them to consider around
functionality and layout. Plus, there is no universal solution – it’s a For example, most checkouts opt for a dedicated page for capturing
real game of trial and error. payment information. Offering multiple payment options may be one
element that aids conversion (i.e. getting the mix right for your target
Once the customers actually make it to the checkout, we’d all like to demographic) but we thought it might be interesting to get a view
think that their job is done – the visitors had a successful browsing of the actual payment method usage – as to what percentage of
experience, found something they like, added it to their basket, and sales are made using each option.
made it to the final hurdle, which should be straightforward enough
to clear. Except, of course, it seldom is. When we got that additional information, the results were quite striking.
For a lot of retailers, there tended to be three dominant methods –
At IMRG we track the conversion of site visitors once they have Visa, Mastercard and PayPal – while Amex was a bit stronger for
arrived at the checkout and while there is some variation throughout more premium brands, and Klarna a big chunk for a couple of
the year, it tends to hover around the 60% mark. This means that retailers.
over a third of people who reach the checkout with an item in hand –
demonstrating no small degree of intent to purchase – don’t end up What was most apparent though was how few retailers seem to
completing it (at that visit, at least). have a full view of their payments spread. Only a few were able to
give us that 100% breakdown, as for the most there were gaps in the
There is a huge array of possible reasons for this, and it’s important understanding. For example, some retailers were not able to identify
to state that the above number is an average. Some retailers have which payment method was used for around 20% of the total sales
much stronger conversion than that, some much lower. But what they made.
are the key factors influencing higher or lower conversion rates at
the checkout? Therefore, it was difficult to say whether offering alternative payment
options is a positive driver of conversion yet. ➔
Payment options
In order to answer this question, we got a more granular view of
conversion from 45 retailers. Instead of relying on conversion at
the checkout overall, we got rates for each page on the checkout.

Delivery options Appearance
The browsing and purchasing processes are only one part of the This doesn’t mean that it’s all a matter of science when it comes to
experience – getting connected physically to the order is a further structuring the checkout and deciding what functionality to include/
consideration that is fraught with challenges. omit. It’s important to note that some of the less tangible elements
can also exert an influence.
At the checkout, can the conversion be influenced by the number
of delivery options customers are able to choose from? As an experiment, we took three checkouts – one that had a relatively
high conversion, one average, and one low – and showed them to a
In our sample, we had 20 retailers who had a page on the checkout room of people. We then asked them to rank them in order of how
specifically dedicated to selecting delivery options (economy, next- they thought they would convert. It was interesting to note that in
day, click-and-collect etc). As a simple exercise, we counted the general, they did manage to get them in the correct order.
number provided and lined them up in order of conversion at that
stage – which means the percentage of visitors who reach that page As part of this exercise, we specifically asked them to focus on
on the checkout and click the call-to-action, usually a button saying the look and feel of the checkout rather than anything related to
‘next step’ or something similar. functionality – what payment/delivery options were available etc.
It seems that something as simple as the font type/size used and
We then drew a line down the middle, and it became apparent general layout can be important factors in driving conversion.
that there was a tendency for those with higher conversion (some
at 99%, incidentally) to offer a greater variety of options. For the And that reveals something that is often overlooked in user expe
bottom half, the average number offered was 2.5, while for the top rience – the basics. We can sometimes get too bogged down in the
half it was 2.9. technical detail and forget to ensure that it looks good. Sometimes
you can do a lot worse than stand back and ask yourself – would
There is no magic bullet for getting people across the line – the top I buy from there?
performer only offered two options, for example – but there are
certain patterns we can identify with some elements on the checkout.
About IMRG: IMRG is the UK’s online retail association – a membership community offering neutral and unique resources
for online retailers. We help our members understand and improve their online retail performance through a busy programme
of performance benchmarking, data analysis, insight, best practice-sharing, and events.
www.imrg.org

The Digital-First Era –
Payment Apps, Super Apps and Beyond
• Solutions Needed to Enable a Cashless Environment

• Super Apps in APAC – What Makes Them so Popular?
• The Evolution of Digital Payments in a Globalized World
Viva Wallet
The future of payments is ‘digital first’. Yannis Larios from Viva Wallet reveals what technologies and solutions are needed to
enable a cashless streamlined environment.
About Yannis Larios: Yannis Larios joined Viva Wallet in March 2012 at the role of Business
Development Director and he is currently the VP for Strategy at its Board of Directors. He is an Electrical
and Computer Engineer with a PhD in Financial Risk management. He has extensive experience in the
Payments and Financial Services Market of Europe, as well as in Business Strategy and Public Policy
formulation in the fields of Information & Communication Technologies (ICT) and eGovernment since
1995.
Yannis Larios VP Strategy & Business Development Viva Wallet
How has COVID-19 outbreak influenced the develop technology-based payment providers acted swiftly, introducing
ment of the existing digital payments ecosystem? innovations in card acquiring, new payment methods and digital
Has the industry struggled to adapt or to innovate? tools to facilitate SME payments and address the rising demand.
Or both? Viva Walletfollowed this latter path, and during the lockdowns, we
The COVID-19 outbreak has essentially worked as a ‘digital readiness immediately introduced new tools. Our main focus was to help SMEs
checkup’ for businesses and consumers alike. Economy sectors set up their own online payment gateways for card acceptance
and professionals with little or no digital footprint had to make leaps in literally 3 minutes from their digital onboarding, irrespective of
to join the digital economy overnight. Payments’ technologies and whether they already had a website or not. We also shifted our card
infrastructure, being the arteries of the economy, remained intact and issuing business to ‘digital first’, and we strengthened our presence
helped the economy breathe amidst the pandemic. Digital payments in digital platforms that facilitate a ‘plug-and-play’ setup of websites
emerged as the life-saving kiss for small and big companies who and ecommerce marketplaces.
asked for even more digital tools, and faster onboarding to new
digital payment services. It is said that digital-first payments are driven mainly
by Gen Z and Millennials. What improvements can the
industry bring to the market to meet this group’s needs?
The ‘digital-first’ disruption in For the moment, payments have largely remained old-fashioned.
payments will be the result of the Now, this is changing fast, but it is not driven by Gen Z or the Millenni
disengagement from legacy card als. It’s driven by everyone who has been well-accustomed to digital
processes in many other segments and activities of their everyday

terminals, with smartphones and
life, and who are now questioning the existing payment methods.
tablets as the main devices for
card acceptance. The ‘digital-first’ disruption in payments will be the result of the disen
gagement from legacy card terminals, with smartphones and tablets
as the main devices for card acceptance. But ‘digital first’ is also
The payments industry reacted accordingly. The large legacy happening on the payee’s side: digital cards reside on smartwatches,
payment providers struggled to meet the unprecedented fast payments are made at the move of a wrist. The payments industry
changes, having limited flexibility to launch new payment services is working towards this direction, yet it still does it as small pilots. ➔
in such short timeframes. On the contrary, the state-of-the-art
56 Payment Methods Report 2020 | The Digital-First Era – Payment Apps, Super Apps and Beyond
To embrace disruption, at Viva Wallet we have put ‘digital first’ as as local sales and compliance teams, and thus, we become active
the highest priority in all of our payment services. Digital debit cards members of the local financial systems.
are becoming the default form factor for merchants. Frictionless
card acceptance through smartphones for fast deployment across This pan-European yet very much localised country-specific strategy
markets, minimal merchant costs and enhanced customer experience allows Viva Wallet to not just offer card acceptance for international
– everything encompasses our number one service. card schemes, but also to settle in all local currencies directly, to
offer acceptance for dominant local card schemes, and to abide by
What emerging technologies will shape the future of each country’s specific AML/ KYC rules. As a bonus to merchants,
digital-first payments? by combining our card acquiring with our card issuing license, we
Wearable payments technology, and especially payments through offer merchants true 0% acquiring fee when both acquiring and
everyday devices like smartwatches are the way to go. Powerful issuing is used.As we are also providing an IBAN account with
smartphones and tablets will also become the NextGen card termi daily settlement (even at weekends!) we liberate businesses and
nals, also embedding tools for measuring customer satisfaction, and professionals from the need to also have a bank account for settling
customer loyalty schemes. funds.
At Viva Wallet, we are launching new payment concepts, which As we recently made a successful bid for acquiring a bank, Viva
integrate smartphone payments and customer satisfaction digital Wallet further plans to complement payments across Europe with
survey tools, all in one device handed to the consumer while paying. merchant advance at instant approval, based on each merchant’s
These new methods and tools, which make payments ‘invisible’, payments profile.
will be the norm during the next few years.
Our strategy is quite straightforward. Europe, despite being a single
How does Viva Wallet stand out as an innovative market, is still a very much fragmented area, with payment-silos
player in the current payments value chain, and what’s at each country, set up by local banks and local payment schemes.
next in terms of company’s developments? We work hard towards unifying this footprint of 23 countries by
Viva Wallet has a unique localised offering for merchants, across becoming the single payment provider that offers integrated payments
each of 23 European countries. We offer card acceptance for both and credit bundle for merchants across Europe. Our strategic intent
card-present and ecommerce, a local IBAN account for each is to offer all available international and local payment products at
merchant, as well as a business debit card with a local BIN number. each country, so that any business, merchant or any other business
Moreover, we are not just ‘passporting’ these payment services, but partner can plug into our cloud-based payments infrastructure and
we are also setting up physical branches at each country, as well have seamless access to a truly single payments market.
About Viva Wallet: Viva Wallet is a cloud-based digital payments provider which offers Merchants across 23 European
countries a local IBAN Account, Card Acceptance services (Acquiring) through card terminals and online, as well as a Viva
Wallet Business Debit Card (Issuing).
www.vivawallet.com
Kapronasia
Anatomy of a Super App in APAC – Factors Shaping Its Evolution
About Joshua Chong: Joshua is an analyst at Kapronasia and has experience across banking,
payments, and capital markets. Before Kapronasia, Joshua was with Morgan Stanley Equity
Research in London and held strategy and business development roles with UK-based fintechs
in the payments and asset management industries. Joshua graduated from the London Business
School with a Master of Science in Financial Analysis and holds a BBA degree from BI Norwegian
Business School.
Joshua Chong Analyst Kapronasia
Alipay. WeChat. Grab. Gojek. These household names have become 3. Numerous micro-small-medium enterprises (MSMEs) that
synonymous with the term ‘super app’ in APAC. Presenting a dizzying increasingly want to accept digital payments or are forced to
array of apps housed under one roof, super apps continue to make do it. For a business to accept payments on an app, all it takes
the headlines with game-changing strategic moves. As super is a two-step process of downloading the app and registering
apps in APAC expand across the region and extend their reach with basic information. Coupled with government initiatives such
into seemingly unrelated services and sectors, the question on as demonetisation in India, it is easy to see why platforms like
everyone’s mind is ‘What’s next for these super apps?’. Paytm and BharatPe have experienced a rapid growth.
4. L ower concern and consumer awareness about data
Factors driving the popularity of super apps in privacy issues. Consumers in APAC and especially in emerging
APAC Southeast Asian nations tend to show little concern about how
Understanding the factors driving the widespread popularity of super companies use their personal data. The promise of a juicy
apps in APAC can give us a glimpse of what the future may hold. discount or cashback generally attracts many customers to
In general, there are five social, economic, and technological factors provide their personal details, often without much consideration
that have contributed to this development: for data security and privacy measures.
1. High mobile and smartphone penetration, with daily usage 5. Presence of many areas with high population density and
ingrained into consumer habits. Countries such as Indonesia, similar socio-economic standing. Group buying websites have
China and the Philippines have a high smartphone device owner utilised this trend to offer attractive ecommerce discounts and
ship among internet users and a growing share of web traffic become a big hit in China and many Southeast Asian nations.
moving to mobile devices in recent years. The familiarity with
mobile phones and the reliance on them have set the stage for Evolving through mergers and partnerships
more services to be delivered through this platform. It is worthwhile to consider that super apps generally started off as
2. Significant unbanked population with limited access to basic single-service apps. These single-service apps rode on the waves
banking services. Outside of capital and tier 1 cities, customers of the key trends highlighted above and, upon reaching a critical
find it hard to access basic services such as cash withdrawal, mass, turned to mergers and partnerships. ➔
domestic money transfer, and bill payments. Their best option
may often be the time-consuming and error-prone process of
physically carrying cash to a bank outlet a few hours away in a
neighbouring village.
kapron
ASIA
Consolidations have played a key role in forming Chinese super What does the future hold for APAC super apps?
apps, and they tend to be driven by competitive pressures. Didi, the The APAC region consists of nations with vastly distinct cultures,
Chinese transportation platform, was formed from a 2015 merger economies, and commercial practices. Even leading players such
of Kuadi Dache and Didi Dache. Despite their dominance, the as Gojek have found it challenging to gain traction outside of their
companies were tangled in price wars that saw them lowering fees and home market, as it turned out that unique product adaptations and
offering financial concessions to capture market share. Their coming strategies were required to succeed in each neighbouring country.
together is likely what drove Uber to relinquish its position in China, For this reason alone, it is unlikely that super apps will make bold
and it placed Didi in a better position to weather future government product launches across the ocean.
regulation.
While the core services of super apps will likely remain in the region,
Not surprisingly, rumours about a possible Grab-Gojek merger the boldest ones will extend their reach behind the scenes by taking
started making their rounds on the internet in early 2020, as the equity stakes and forming partnerships with foreign up-and-coming
two are currently burning cash while they compete to attract drivers tech startups. The goal here would be to incorporate the startup’s
and customers to their apps. Mergers are likely to be a trend in technology and data into the super app’s native ecosystem.
the near future, as platforms increasingly realise the benefits of
combining their treasure troves of data to improve offerings and This is especially applicable to players such as Tencent and Grab
cross-sell services. who have increased their focus on fintech with ambitions of developing
a global digital banking ecosystem. Instead of ‘expansion’, the
Meanwhile, strategic partnerships have enabled app platforms new buzzword for fintech-focused super apps could very well be
to expand their offerings beyond the core services. For instance, ‘integration’.
Gojek has partnered with major local production houses and
international studios to launch a video streaming service, GoPlay, on
its core ride-hailing platform. On the other hand, Ant Financial, the
operator of Alipay, announced a partnership with Vanguard to bring
investment advisory services to retail consumers in China. As this
range of services continues to expand, users will increasingly find
themselves attached to the app, as it will be intertwined with every
facet of their lives.
About Kapronasia: Kapronasia is a leading independent research and consulting company focused on the Asian
financial services industry. We help financial institutions, technology vendors, consultancies, and private equity companies
understand the impact of business, technology, and regulatory issues in banking, payments, insurance, and capital
markets.
www.kapronasia.com
Partelya Consulting
Digital Payments: A Strategic Evolution in the Context of Globalization
About Andréa Toucinho: European expert in payments and financial services, Andréa Toucinho
is Director of Studies, Prospective and Training of Partelya Consulting and Country Ambassador
for France of European Women Payments Network (EWPN). France Representative of national
fintech associations of Spain and Portugal (Aefi Spain and Afip Portugal), she realised two books
about payments in 2018 and 2019 and is one of the co-authors of the international PAYTech Book
published in January 2020 by Wiley.
Andréa Toucinho Director Studies, Prospective and Training Partelya Consulting
The article outlines the key takeaways from the white paper ‘Déma Furthermore, at a European level, AML fourth Directive considers
térialisation du paiement et évolutions du parcours d’achat: quelles cash as a risky mean of payments. For this reason, many European
perspectives?’ This publication has been realised from January to institutions see digital as a strong asset for security. This move is
June 2020 and includes regulatory and strategic studies about the represented by the evolution to SEPA means of payment and the
evolution of uses of consumers and retailers in the context of digital. creation of instant payments.
The evolution from ‘traditional’ payments to digital tools is one of Digital inclusion
the major topics in the payments industry. The study ‘Dématériali Nevertheless, some questions and conditions have to be consi
sation du paiement et évolutions du parcours d’achat: quelles dered in the market. First, the necessity to foster information and
perspectives?’ conducted in the French payments market reminds communication about these new tools for consumers. Digital inclusion
us that the creation of the era of digital payments is not a recent is a strong condition to ensure the transition towards a real cashless
process – it is first linked with payments cards. In addition to this society. That’s why payments professionals have to study not
technological evolution, there is a strong institutional ambition – only regulatory, technological, and strategic conditions, but also
European institutions aim at developing electronic payments for the sociological and economic realities. Thus, in many regions of
various reasons, and on top of all, to address security concerns. the world, like in Europe or Africa, there are strong differences among
countries regarding uses and digital strategies. Hence, it is necessary
An institutional strategy to develop a strong analysis of the reality of societies before
The move towards electronic means of payment represents for adopting a strategy on digital means of payment.
European institutions, above all, a security guarantee. Thus, digital
payments can be easily scored and controlled, whereas ‘traditional’ The consent to pay: a key feeling
payments, like cash payments, are a strongly private use. In addition Another consideration is the necessity to evolve towards a more
to this reality, many studies realised by payments actors show that efficient experience of payments with strong attention on the respon
‘traditional’ means of payments are more vulnerable regarding sibility and the consent of consumers to pay. This idea is strongly
security. For example, the French ‘Observatoire de la Sécurité des defended by consumers’ associations. The idea is that the consent
Moyens de Paiement’ showed in its 2019 report a growth of fraud to pay is a key feeling to guarantee the responsibility of consumers
in check payments. and a better money management. ➔
For this reason, ‘invisible’ payments are not seen as a good pro
cess: payments professionals prefer the idea of frictionless pay
ments. Frictionless payment is also linked with another reality: the
payment’s place in the retail process. Whereas yesterday, payment
was at the end of the transaction in store, tomorrow, the payment
will be realised through different ways, in various moments of
the customer experience, according to omnichannel strategies
linked with new uses, especially in the context of mobility. This last
consideration reinforces another key idea: the evolution towards
digital payments has to be studied by all actors of the market,
according to a ‘co-innovation’ model. In this new paradigm strongly
linked with new consumption codes, consumers have a strong role
to play, mainly thanks to the ‘Millennial’ segments.
Millennials: a new step for digital uses

In fact, the arrival of Millennials in the market of payments and
consumption is seen as a new step for innovation. This generation
is natively mobile and very linked with social media. Therefore, it
is obvious that it will bring new means of consumption, like the
importance of data, or even the relation between social media
and payments, easily represented nowadays by the strategy of
WeChatPay. Millennials will accelerate the move of society to
digital uses and reinforce the idea that payments are today linked
with a global approach. Thus, the use of Uber, Amazon, and other
global actors testifies to the idea that digital payments have to be
considered by payments companies not as a national strategy,
but as a real global movement. Hence the importance of universal
payments and interoperability, like the solutions developed by nexo,
for instance. As a result, digital payments have to be analysed,
today, as a real asset of globalisation.
About Partelya Consulting: Created in 2008, Partelya Consulting is a French consulting company specialised in means of
payment. It works with all actors of the market, from banks to schemes and retailers, on technological and strategic issues.
The company works at an international level (France, Europe, Morocco etc.) and it is a member of the French Association
du Paiement.
www.partelya.com
Disruptive Technologies and Solutions
Shaping the Way People Pay
By partnering with fintechs, global card networks play an important role in shaping the present and future
of payments. The current connected economy urges the payments industry to develop new technologies
and experiences, and this goal is successfully achieved when you have the right partner to work with.
Apart from the value of cross-industry collaboration, we also learn what role plays biometrics in creating
a frictionless experience for consumers, when employing standards-based approach to authentication
and transaction authorisation.
Discover Global Network
Global Networks and Fintech: The Future of Emerging Payments
About Soumya Dev Chakrabarty: Soumya is the Head of Strategic Partnerships for Discover
Global Network and is responsible for developing and expanding partnerships with marquee
Fintech and Big Tech organizations. Soumya previously served as the Head of R&D and Innovation
for Discover Global Network where he led the team responsible for assessing new and emerging
technologies, developing new business opportunities, building new concepts, evangelizing ‘the
company’s’ brand’s innovation capabilities, and piloting new capabilities. He has been involved in
the area of emerging payment technologies and partnerships for the past 15 years.
Soumya Dev Chakrabarty Director, Business Development Discover Global Network
Trends and developments that disrupt the Having started with an impressive footprint in Asia, these options
payments landscape are now reaching European and American consumers, while also
Over the past five years, the payments industry has witnessed becoming relevant not only for in-store transactions, but for online
several trends regarding customer behaviour and the adoption of payments as well.
new payment methods, technologies and business models – each
of them pushing toward a more cashless society. Real-time payments

A second dominant trend is the development of real-time payments,
Three major payment trends have been developing over this period: which provides value to the gig economy, online marketplaces
touchless payments, real-time payments, and payments security. and account-to-account transactions. By incorporating real-time
Each of these trends has one thing in common: the technological disbursements, gig economy workers have immediate access to
innovation that is enabling the surge of “contact-free” payments. payments and funds, while buyers and sellers enjoy simplified
transacting in both B2B and B2C marketplaces.
Touchless payments
Today, with the global pandemic caused by the spread of COVID- Payments security
19, businesses are looking even more to both innovate and adapt to In addition to convenience, security remains a critical factor in online
a different mindset. Four in five consumers are already shifting their transactions, giving rise to the need for new authentication and
in-store spend online, and 50 percent of merchants are expecting risk-control methods. At Discover® Global Network, these concerns
online sales to be higher as a result of the coronavirus outbreak, a have led to enhanced layers of security in the company’s product
451 Research study found. called ProtectBuy®, a 3DS customer authentication solution, which
aims to protect both consumers and merchants from fraud. ➔
This shift from cash to digital has been led by contact-free payments
– whether transacted online or with contactless cards in-store – that

“…To ensure seamless and secure trans
seek to create a seamless journey for the consumer.
actions, partnership is key. That is why we rely
E-wallets, QR code payments, and alternative wallets have also on our partnerships with issuers, acquirers,
been on the rise, initially tailored for in-store experiences, now also and payment technology companies for
providing a new environment for ecommerce and m-commerce. enhanced customer experience.”
63 Payment Methods Report 2020 | Disruptive Technologies and Solutions Shaping the Way People Pay
Emerging technologies shaping the present acceptance, enablement, digital transformation, and enhanced
and future of payments customer experience.
While society has recently adopted an increase in social distance due
to the COVID-19 pandemic, we continue to live in an ever-increasingly By providing flexible capabilities that fit the needs of our partners,
connected world, and one that is building a fully connected economy. new products and solutions are brought to the market, with an
Consumers all over the world use multiple devices on multiple emphasis on meeting consumer needs. We also continue to evolve
channels to transact. Some make use of the latest augmented- our partnership strategy to incorporate new experiences, including
reality powered apps, thus having unique ways of interacting with various white-label partnerships with financial services companies
merchants. New 5G technology will make this connectivity faster that rely on our payment rail or platform to develop their services,
and more accessible and has the potential to unlock radically new and ultimately, increase merchant acceptance.
features in the IoT space.
At Discover Global Network, we believe innovation is the foundation
As this connected economy continues to grow, payments organi for growth. And we continue to partner with universities, technology
zations, including Discover ® Global Network, must also ensure providers and payment partners to help lead the change. We have
that, while the experiences are seamless and frictionless, they are used our unique infrastructure to power partners’ progress and
also secured with adequate protection through authentication. become the fastest-growing global payments network. With proprie
Biometrics will continue to add new layers of security, including voice tary technology and employees who are dedicated to bringing our
recognition, while new types of digital authentication for devices partners’ vision to life, we are dedicated to helping them expand
and channels will continue to evolve. Discover Global Network also their business in next-generation security, new payment technolo
collaborates with key standard bodies, such as the PCI Security gies and new customer engagement strategies.
Standards Council, to further develop new security capabilities to
help ensure interoperability within the entire ecosystem. As the pace of innovation increases, more companies than ever are
valuing the ways Discover Global Network engages with partners – so
The value of partnerships with fintechs they can think big, implement efficiently and maintain a competitive
Discover Global Network takes innovation forward by collaborating edge.
with fintechs, while addressing all the trends mentioned above and
related technologies. To ensure seamless and secure transactions, Visit us here to learn more about our products and services, and feel
partnership is key. That is why we rely on our partnerships with free to reach out to discuss ways to build a successful collaboration.
issuers, acquirers, and payment technology companies for greater
About Discover Global Network: Discover Global Network, the global payments brand of Discover Financial Services,
processes millions of cardholder transactions each day. With industry expertise, innovative technology and a closed-loop
infrastructure, Discover Global Network provides effective, customized solutions that evolve as needs change. Discover Global
Network has alliances with more than 18 payment networks around the world and is led by three Discover businesses: Discover
Network, with millions of retail and cash access locations; PULSE®, one of the leading ATM/debit networks in the U.S.; and
Diners Club International®, a global payments network with acceptance in more than 200 countries around the world.
www.discoverglobalnetwork.com
Type of payment method Credit card, debit card, prepaid card, online banking, e-wallet, mobile, offline
Active since 1986
Operational Area Global
Industries All
How it works Global payment network
Potential reach 189M+ DGN Cardholders around the globe
Acceptance Discover Global Network is accepted at 48M+ global merchant locations across
200 countries and territories
Facts DGN is accepted at 200 countries and territories; 189M+ DGN cardholders
around the globe; USD 400+ billion transaction volume; 18 network alliance
partnerships
Settlement currency 30+ international currencies, for more information, contact us at:
contactus@discover.com or go to https://servicecenter.discoverglobalnetwork.
com/onlineform/en-intl/contact-us
Processing currrency For more information, contact us at: contactus@discover.com or go to
https://servicecenter.discoverglobalnetwork.com/onlineform/en-intl/contact-us
Currency available for consumer For more information, contact us at: contactus@discover.com or go to
https://servicecenter.discoverglobalnetwork.com/onlineform/en-intl/contact-us
Transaction volume USD 400+ billion
Implementation requirements Local acquirer/issuer
(non technical)
Pricing For more information, contact us at: contactus@discover.com or go to https://

servicecenter.discoverglobalnetwork.com/onlineform/en-intl/contact-us
Link to the APM Database for more details https://thepaypers.com/company/discover%20financial%20services/160
Channels (POS/ecommerce) POS; ecommerce; digital; mobile; ATM; mail; telephone
All claims in the table above are based on internal Discover Financial Services data.
FIDO Alliance
Biometrics Can Be the Future of Securing Online Payments – If We Get It Right
About Andrew Shikiar: Andrew Shikiar is the Executive Director and Chief Marketing Officer of the
FIDO Alliance. He has deep experience in multi-stakeholder organisations, having previously led
market development efforts for Tizen Association, LiMo Foundation, and Liberty Alliance Project.
Andrew Shikiar Executive Director and Chief Marketing Officer FIDO Alliance
As the range of essential activities we undertake digitally in web The increased role of biometrics in the authentication of payments
browsers and on our mobile devices continues to grow, few things is a step in the right direction. Biometrics now come standard on
require more attention than securing financial transactions. Whether we most personal devices, are easy to use, and can be more accurate
are buying milk at the grocery store, paying off our mortgages or for user authentication than passwords, as they inherently represent
sending money to loved ones, a process needs to be in place that what is uniquely ‘us’, such as fingerprints or facial shape.
prevents widespread fraud without compromising user experience.
In the payments industry, moving away from usernames, passwords
While many financial organisations have made great strides in and OTPs to a simplified model with biometrics can help increase
recent years when it comes to ensuring their security measures are login and transaction success rates. This matters a lot, where
fit for purpose, traditional password-based authentication continues increases of success and approval rates by even a few percentage
to be widespread. This is a serious liability to individuals and points can mean substantial revenue increases for financial instit
organisations alike, with the average consumer only ‘protected’ by utions and ecommerce merchants.
a handful of passwords that are recycled across dozens of their
accounts online. Recent research from Ponemon Institute found However, it’s important that the payments industry gets biometrics
that in the UK, IT professionals reuse their passwords across an ‘right’. This means not following the password model of storing
average of ten personal accounts. These are the people supposedly biometric data on centralised servers. Doing so would pose a bigger
most acutely aware of the threat landscape facing organisations, threat than password usage as biometric information naturally cannot
but even they revert to weak security practices. be changed in the way a password can. Instead, biometric data can
and should be stored locally on the user’s device.
Getting it right
Passwords are a growing concern as they are widely used but rely The good news is that years of cross-industry collaboration has
on large, centralised databases that can be easily intercepted by led to billions of mobile devices, PCs and web browsers on market
actors looking to use the login information for nefarious means. today with support for FIDO standards-based strong authentication
Many actors in the finance industry have realised this, which is – combining cryptographic protection of user authentication creden
why so many financial institutions have implemented multi-factor tials and biometric data, which never leaves the user’s device.
authentication (MFA), such as one-time passwords (OTPs) and By building applications and websites that support new web
biometrics to add security for user authentication and transaction standards for strong cryptographic authentication, developers
verification. are leveraging these authentication mechanisms that are quite
literally already at their users’ fingertips to improve security for both
businesses and their users. ➔
A great example of how technological developments are enabling Moving forward together
more convenient online payments that are also more secure is Taking these two steps – storing biometric data on the user’s device
the new ability for users of Google Chrome, who store their card (and never letting it leave) and requiring incontrovertible proof
details in Google Pay, to verify their payment card details through a of device possession – will allow the payments industry to take
simple look at their camera or touch of their fingerprint. This is made advantage of the positive user experience and security attributes
possible by the addition of FIDO on-device biometric authentication of biometrics, and move toward a passwordless future without fear
through the PC desktop in all Windows 10 PCs with Windows Hello. of large-scale data breaches.
Should we fear spoofing? There is no longer a need for each organisation to reinvent the
Apart from the issue of data storage, the prospect of widespread wheel. By taking a standards-based approach to authentication
spoofing is something that concerned many technology developers and transaction authorisation, businesses can spend more time
in the finance sector and beyond, with the possibility for hackers developing, manufacturing, and marketing their products, while
using 3D printers to produce fingerprint moulds being the most also streamlining costs. For the payments industry, this approach
common concern. While such spoofing is evidently possible, it is to authentication allows organisations to better defend customer
also extremely labour-intensive to implement, and most critically, data, while at the same time enhancing the user experience and
extremely difficult to scale up. As such, the majority of users of reducing friction.
commercial biometrics in their personal devices aren’t at risk for a
targeted spoofing attack.
That said, vendors are addressing the issue by enhancing both
the sensitivity of their sensors as well as by adding new liveness
detection capabilities. For example, certain fingerprint sensors are
able to read below the skin for characteristics that cannot be copied
by a fake fingerprint.
We encourage service providers to utilise these added controls,
and also to use biometrics as part of a two-step process where
they also validate that the user has the authorised device originally
registered with the service. This way, there is no possibility of a
remote spoofing attack being successful.
About FIDO Alliance: The FIDO (Fast IDentity Online) Alliance was formed in 2012 to address the lack of interoperability
among strong authentication technologies. Its members work together to change the nature of authentication by developing
standards for simpler, stronger technologies that define open, scalable, and interoperable mechanisms and reduce reliance
on passwords.
www.fidoalliance.org
MRC Europe
Developments in Biometric Authentication and Biometric Cards
About Úna Dillon: Úna is Managing Director of MRC Europe. Having worked in the payments
industry for more than 20 years, she has chaired industry working groups, ran Laser Card (Irish
national debit card scheme) for 12 years and was responsible for driving the development of policy
on major initiatives such as SEPA.
Úna Dillon Managing Director MRC Europe
Biometrics, or the science of recognising people using their physical Consumers are accustomed to using fingerprint technology, e.g.
attributes, has been around since the late 1800s. French policeman unlocking smartphones. Consumer device cardholder verification
Alphonse Bertillon measured prisoner body parts such as height, method – or CDCVM – works when consumers use their smartphone
length of the forearm, and eye colour, to identify repeat criminal to authenticate payments initiated from their laptop, without a
offenders – not the immediate biometric authentication we have fingerprint sensor; similarly, when customers in store tap and go,
today but the same concept, nonetheless. at the Point of Sale, with their smartphone and authenticate the
transaction using fingerprint.
Today, consumers want their online purchase to be fast, efficient
and safe. Online retailers want lower abandonment rates, great user For mobile payments, the UX depends on the mobile platform
experience (UX), more sales, less fraud, and fewer chargebacks. A provider, e.g. ApplePay, Samsung Pay, etc. Visa Checkout and
Visa survey carried out to research awareness and perception of MasterPass are now compatible with these. As consumers
biometric authentication confirmed people have a strong interest increasingly use their smartphones for shopping and banking,
and awareness in new biometric technologies, especially those that companies are rapidly leveraging biometrics for payments and
make their lives easy and secure. money transfers.
According to a recent Paysafe research, 61% of consumers agreed According to a Juniper Research Study, mobile biometrics will
using biometrics is much quicker and more efficient. 57% agree authenticate USD 2 trillion in remote and in-store payments in 2023,
that being able to verify a payment using biometric technology up from an estimated USD 124 billion in 2018. They predict fastest
would make shopping on their smartphone more convenient than growth will come from biometrically-verified mobile commerce
traditional desktop ecommerce. 65% agreed automated payments transactions which will represent 57% of biometric transactions
mean less time at the checkout. in 2023, up from 28% in 2018. It is estimated roughly 90% of
smartphones can support facial recognition, and 80% can support
Why develop biometric authentication? voice-authentication. The research forecasts over 1.5 billion active
Strong customer authentication is mandatory for all electronic smartphones will use software-based biometrics by 2023.
payments in the European Union (with some exceptions such as
risk assessed transactions, low value amounts, recurring sales) so As for the development and use of the biometric card, one area
retailers increasingly need to use modern technology to verify the explored by card issuers is the adoption of fingerprint recognition
person at the other end of the transaction. for contactless card payments in place of PINs. The biometric card
uses a fingerprint sensor right on the card and the consumer pays
with a simple touch. ➔
Retailers love this one as terminals don’t need to be upgraded. Voice recognition meets a factor requirement when several factors
Like facial recognition, the customer’s fingerprint scan on the sensor are required to authenticate the payer. It can be time consuming
is compared with the fingerprint biometric data securely stored in though and if the consumer is paying in-store it can be an embar
the card. rassing experience. 100 million users worldwide now have some
form of voice-activated Smart Home technology such as Google
Facial recognition has come a long way. Early issues were solved in Home or Amazon Alexa, so consumers are adopting the hardware
the last decade including image capture, now with more sensors, that will enable them to shop online and pay bills using voice
and image exposure correction. What is being analysed here? command alone.
the distance between the eyes, width of the nose, position of the
cheekbones, etc. These quantities are then combined numerically in Electrocardiogram (ECG) authentication – can this be the new
a single code that uniquely identifies each person. In the Mastercard password? The consumer wears a band that can authenticate
app for example, face recognition is enhanced by facial expression them using a variety of biometrics, including heart rate. Effectively,
recognition as the application requires the consumer to blink to it turns the consumer’s heartbeat into a unique key that can be
prove they’re human. Facial recognition holds great promise, but used to authenticate them to make a payment, unlock a device,
perhaps not right now while we’re all wearing masks! etc. The technology could allow retailers to know their customer,
before they’re told, e.g. imagine walking into a restaurant and they
Alipay ‘smile to pay’ feature compares the consumer’s face with the already know your seating preferences and dietary requirements.
one stored during the onboarding process. This is now the norm in
the Chinese market. The payments industry has been developed due to three main
things: technological innovation, regulation, and consumer appetite.
Banks across the world are now also using facial recognition as a Adoption of biometric verification will accelerate as consumers
first authentication factor. Fingerprinting and voice recognition are become more familiar with the options available to them.
second and third factors. We are seeing concepts in the market
where the smartphone is used as a biometric authentication hub, For more information on payment types and security, see:
i.e. using the smartphone like an RSA token. www.merchantriskcouncil.org
Retina scanning (iris recognition) uses consumer patterns that can’t
be replicated. The challenge is remaining in one position while
taking the scan, plus the camera resolution and general quality.
Companies such as Alipay and Wells Fargo currently use iris
scanning for authenticating customers.
About MRC Europe: The MRC is a global membership organisation connecting ecommerce fraud and payments
professionals through educational programs, online forums, career development, conferences, and networking events.
The MRC encompasses a membership network of over 500 companies including 350+ merchants all focused on fraud
prevention, payments optimisation, and risk management. Hear our members share the value of MRC collaboration.
www.merchantriskcouncil.org
WHO WE ARE
We are a global membership organization connecting eCommerce fraud and payments professionals
through educational programs, online forums, career development, conferences, and networking events.
Below are a few of the resources MRC members have to stay connected and continue learning in the
rapidly evolving fraud and payments industry.
A comprehensive resource Receive discounted rates on our Network with other professionals
library of educational web-based educational courses, by searching for MRC members in
presentations, webinars, RAPID Edu our Member Company Directory
benchmarking reports, and
case studies
Join MRC Community Calls to Join a discussion in our Open Join our annual conferences at a
connect with professionals in Fraud & Payments Forum on discounted rate and get access to
your industry and engage in latest industry trends member only regional events
focused discussion
JOIN THE MRC NOW!

Become part of a premier group of eCommerce fraud and payments professionals with
the mission to exchange knowledge, solve challenges through collaboration, and
collectively work towards the common goal of making eCommerce safer and more
profitable. merchantriskcouncil.org
Payment Methods and Latest Developments
– The Global Overview
Introduction
It has never been as imperative for merchants to ensure a sleek, clean shopping experience for their customers: many merchants spend large
sums to draw customers in, only to lose them on the checkout page. However, if your payment methods are fully aligned with consumer
demands and your checkout is seamless and reliable, you could increase conversion by 35.26%, according to a research by the Baymard
Institute. These figures are based on the testing of checkout processes from leading ecommerce sites, such as Walmart, Amazon, and Wayfair.
When surveying customers that abandoned their purchase, they found friction during the checkout process (in the form of obligatory account
creation, opaque costs, and crashing websites) and a lack of the right payment methods among the leading reasons for abandonment.
When it comes to payments trends, we’ve seen that COVID-19 and the economic disruption that swiftly followed have acted like a catalysing
agent for the global move towards Digital and Cashless (and preferably contactless). Therefore, it is paramount for merchants to have a
reliable and seamless online offering. In the following chapter, we decided to take a closer look at some of the most relevant regions and
specific consumer markets all over the world and closely document the current state of affairs, the latest developments, and the most-used
payment methods in ecommerce and online payments.
E-wallets, online banking e-payment methods (a.k.a. Account to Account) and pay later solutions have seen a massive rise, while pundits
(e.g. Ovum) predict that the market share of credit cards will further decline in the coming years. With people turning towards digital and seeking
easier ways to pay online, keeping informed and adapting to the market will be the key differentiator for ecommerce players in 2020 and beyond.
We talked to specialists, market experts, local consultants, and actively involved players in the market to rank and put together a visually
comprehensive page-by-page collection of data on the payment methods and trends in ecommerce governing the world at this
time, in a ‘one-sheet-per-country’ format.
Europe – staying the course on the path to digital

Europe is a fragmented market: every country has its own context and history which determines their payment preferences. However, there are
a couple of common trends that we have observed: while in many markets cards are still kings of ecommerce, all throughout Europe payment
methods based on the banking rails are becoming more dominant, pay-later solutions are on the rise, and e-wallets are becoming more
widely accepted. Europe holds a lot of opportunity: the ecommerce market value is said to be worth EUR 717 billion at the end of 2020 (with
a 12.7% increase from last year at least).
Germany has seen a rise in electronic payments: even though Germans have traditionally preferred cash, they have come around to electronic
payments as a safe and secure way to pay during the pandemic. Deutsche Bank goes as far as to say that contactless card payments
may have replaced a certain share of cash payments permanently in the country. Polish consumers are displaying a tendency to adopt
new payment technologies with ease with payment methods such as mBank and Blik being increasingly included in the payments offering
of merchants in the region. Spain reaps more and more fruits of its homegrown players such as Bizum, which even though started out with
a P2P offering based on SEPA Credit Transfer, pivoted towards ecommerce payments (POS and mobile payments), expanding its reach
and adapting to market needs. The Netherlands has seen a more robust penetration than ever for its iDEAL online banking e-payments
scheme with the pandemic pushing its popularity from an already majority share of 59% towards an unprecedented 68% of market share.
Meanwhile, The Swedish Parliament has voted new laws that require online merchants and checkout providers to present customers with
debit payment options before credit options as a way to protect consumers from excessive credit purchases. Adding to this, in 2019, Pay.
UK launched the Request to Pay service, and in May 2020, they launched the Request to Pay Framework – the message standards, rules,
and terms and conditions for the development of these services. ➔
72 Payment Methods Report 2020 | Payment Methods and Latest Developments – The Global Overview
Introduction
North America – credit cards still rule, but watch out for e-wallets
In the US, online shopping dominated by credit cards, fintech start-ups, and alternative payment methods (using a different payment instrument)
have found it hard to compete with the credit card giants more than anywhere else at this economic level. And the reason is that, in the US,
credit card issuers offer an incredibly lean process when it comes to fast chargebacks, cashback policies, customer care and a myriad of
loyalty programmes that offer a level of convenience and nurture a sort of devotion on the consumer side that is really hard to beat.
However, especially in the Gen Z and Millennial age groups, e-wallets gained a massive following, with Venmo and Square creating a
visible shift in payments behaviour. This is aided by the fact that e-wallets such as Apple Pay and Google Pay offer contactless payment
options in-store where cards do not always offer this.
Lastly, the American ecommerce market has seen a surge in pay-later and instalments options, with AfterPay, Sezzle, or Klarna visibly
penetrating the market. Even though it’s still hard to grasp for many online shoppers, the convenience of these options has breached a lot
of barriers and quickly gaining market share, while continue to grow at a rapid pace.
Eurasia and Latin America – bridging online with the offline

Russia and Turkey are telling examples of how technology shaped itself on the backbone of consumer behaviour. The faster payment
system (FSP) of the Central Bank of Russia is developing a simplified one-click payment method. Following its launch, the central bank
also added a QR-based functionality to the system, enabling payments of goods and services by using mobile devices, thus contributing
to the proliferation of digital payments and cashless society in the country.
Turkey is typically an instalments market, so in the advent of the pandemic, credit cards and their instalments functionality proved to
be factors in maintaining merchants afloat and boosting cashless payments. Moreover, Mastercard and ING Turkey developed the Tap-
on-Phone solution that enables small merchants and SMEs to turn a smartphone into a POS and accept contactless payments via NFC.
Across the ocean, in Latin America, even though cash-based payments are hard to beat in ecommerce (with notoriously convenient kiosk
cash payments methods such as Boleto Bancário, or OXXO setting the tone these days), central banks actively collaborate with the fintech
environment and the government to create a climate of financial inclusion and offer unbanked citizens easy means of paying and purchasing
online in faster and safer conditions. In Mexico, debit card penetration is still incredibly high, with cash on delivery and digital wallets tied
as the second-most used payment method.
Asia – super apps, super everything

With an ecommerce sector predicted to surpass USD 150 billion in value by 2025, Asia once more comes into the scene offering a vivid
performance of tenacity. ‘Super apps’ are the buzz word of the industry in China, with WeChat continuously innovating, and the rise of
facial payments technologies, such as Alipay’s upgraded ‘Smile to Pay’ system or Tencent’s facial payment machine.
And while India is finally seeing the apex of applying its Unified Payment Interface (UPI) to allow ecommerce merchants to reach unbanked
and rural customers, Japan and Singapore are two examples of bona fide rock stars when it comes to the rise of cashless societies –
from Japan pushing to become cash-free by employing QR code payments, digital wallets, or cryptocurrencies to Singapore’s ambition to
become a technology-driven ‘Smart Nation’. To this end, Enterprise Singapore (ESG) revealed the ‘Singapore E-Commerce Programme’,
built in collaboration with ecommerce platforms Amazon and Lazada Singapore.
It was an acknowledged truth that Southeast Asia was a fintech and an ecommerce hub, but 2020 has seen a resounding increase in the speed with
which the region pressed the gas pedal towards online payments in ecommerce, riding the trend created by the pandemic swiftly into
establishing cashless society as the new normal. ➔
Introduction
Africa – the land of contrasts
While it is true that ecommerce has been a challenging space in countries such as Kenya due to infrastructure gaps and customers’ reluctancy,
while also online shopping as a whole being something predominantly present in urban areas, the huge success of mobile money has created
an environment in which more and more users are offered options to shop online and are included in the ecommerce value chain. Moreover,
as part of its Financial System Strategy 2020, the Central Bank of Nigeria is focusing on financial inclusion by bringing unbanked consumers
under the purview of the banking system, aided by mobile money operators and telecom companies, who are making efforts to create traction
for the financial inclusion programme.
While there are several barriers in their paths, African countries such as Kenya or Nigeria are making visible efforts towards building a better
logistics infrastructure and promoting financial inclusion, so that ecommerce can expand outside the confines of big cities such as Nairobi,
Mombasa, or Lagos.
Read more
In conclusion, the world is at a boiling point in 2020 and a close look into the ecommerce markets and payment methods is the foundation
to understanding where we’re heading and, specifically, at what speed. Read on to dive deeper into each region and learn about what are
the most used payment methods and brands that dominate each market, with a close eye on the latest developments and the numbers
to back everything up.
Alexandra Constantinovici | Senior Editor | The Paypers
Acknowledgements
We could not have been able to bring forward to our readers the most relevant and up-to-date information about each geography without the
help of our collaborators, who have kindly offered us the most insightful takes on the realities of each region we researched. We are proud
to have worked with seasoned experts in the payment, financial, and ecommerce industry and would like to take a moment to acknowledge
their input and invite you to keep a close eye on their work and efforts to better the ecosystems they operate in as a whole.
Adedeji Olowe, Nigerian investor, and the founder of Open Banking Nigeria
Adrien Henni, Co-founder and Chief Editor, East-West Digital News (EWDN)
Barış Yılmaz, Head of Marketing, iyzico-PayU Turkey
Christine Chang, expert in Strategy, Scaleable Growth, Startups and VC in Mexico and Latin America
Janusz Diemko, Supervisory Board Member, Paylane-Polskie ePlatnosci
John Pals, VP of Marketing and Innovation at Peoples Group and member in the Advisory Council of Payments Canada
Joshua Chong, Analyst, Kapronasia
Leilei Wang, Fintech Consultant, Kapronasia
Oliver Ström, Commercial Strategy at Trustly
Paula Martins, Content Marketing Analyst, and the expert team of PagBrasil
Rick Groothuizen, Managing Director, ClickPesa
Roberto Valerio, Founder and Managing Director, Risk42 (Risk Prevent Software GmbH)
Sally Baptiste, Consultand and Founder of Payment Operations Group
Sami Louali, EVP Financial Services, Jumia
Zennon Kapron, Founder/Director, Kapronasia
Payment methods - the global overview
Europe - France
General overview
The B2C ecommerce market in France accounted for USD 39 billion in 2018, and it is projected to reach USD 49.9 billion in 2020. An ongoing
shift away from cash is noticeable, supporting the development of card-based payments. With a bank account penetration of 94%, debit
cards are the preferred payment method for ecommerce transactions, followed by e-wallets, credit cards, and OBeP.
By far, Cartes Bancaires, the country’s national interbank network known as CB, dominates the payments landscape. We can expect an
increase in the value of card payment transactions and the number of circulating cards, as the shift away from cash is projected to continue.
Latest developments in the country

JP Morgan reports that in France 3% of online buyers experience TOP 5 payments methods for ecommerce
fraud, and this goes to show that the fraud rates are high, compared
with other European countries. However, France has registered a 1. Debit cards
fall when it comes to the value of CNP fraud recently, chargebacks 2. E-wallets
rates are also falling, and fraud rates altogether are expected to 3. Credit cards
decline even more with the introduction of new regulations – that 4. Online Banking e-Payments
being the case, the outlook is positive. 5. Pay later/instalments
Most relevant payment methods in 2020
Cards E-wallets Pay later / instalments
Europe - Germany
General overview
In Germany, Online Banking e-Payments is the preferred payment option for ecommerce transactions, closely followed by e-wallets and
instalments. Even though card payments accounted for a relatively small section of the market share, in 2019 there was a great shift
towards this payment option.
In 2018, the German B2C ecommerce market reached USD 67 billion, and the revenue in this sector is expected to reach USD 82 billion
in 2020. According to Statista, it is expected to register further growth, at an annual rate of 6.5%, resulting in a projected market volume
of USD 105.6 billion by 2024. The largest segment in Germany’s ecommerce market is electronics and media, which is expected to reach
USD 22.3 billion at the end of 2020.

One of the recent developments of Germany’s payments landscape TOP 5 payments methods for ecommerce
is the increasing popularity of electronic payments, which in turn
contributes to a big section of the payment value. In the country, 1. Online Banking e-Payments
this type of payment is regarded as a secure way to pay especially 2. E-wallets
for products that cost a large amount of money. Nonetheless, the 3. Pay later/instalments
most online transactions are accounted for by methods that are not 4. Debit cards
credit card-based, such as Sofort. 5. Credit cards
Cards Pay later / instalments E-wallets Online Banking e-Payments
Europe - The Netherlands
General overview
As most small Dutch online stores also offer iDEAL, total acceptance in the Netherlands rose from 74% in 2018 to 90% in 2019.
iDEAL mainly replaced credit transfers as a payment method. Credit cards are accepted by 30% of Dutch online stores, PayPal by 54%.
In addition, various means of payment are offered for post-payment, such as Afterpay, Klarna and cash on delivery. Klarna showed the
largest increase: from 3% acceptance in web shops in 2018 to 9% in 2019.
The ecommerce market value in the Netherlands was worth EUR 25.8 billion in 2019, which means an increase of 7% compared to
2018. The national ecommerce grew mainly due to an increase in online food purchases, yet before the pandemic, the top sector segments
were fashion and sports goods (72%) and travel (69%).

COVID-19 pushed iDEAL payments – its share grew from 59% TOP 4 payments methods for ecommerce
to 68% in Q1 2020. Instant payments are the new normal, in the
country. In the context of ecommerce, this means most Dutch banks 1. Online Banking e-Payments
will automatically process payments via mobile devices and internet 2. E-wallets
banking as Instant Payments. ABN AMRO launched Tikkie in 2016, 3. Credit cards
a free app for iPhone and Android. Payments are processed through 4. Pay later/instalments
iDEAL and the user’s own bank. Tikkie has 6 million users, and
business can use the app to send payment requests. In the PSD2/
open banking space, KLM and Adyen have developed a payment
initiation service, enabling consumers to pay for KLM flight tickets
directly online or by mobile. KLM now also offers the same option
through payment service provider Ingenico ePayments.
Online Banking e-Payments E-wallets Credit cards Pay later / instalments
Europe - Poland
General overview
With a B2C ecommerce market that accounted for USD 8 billion in 2018, Poland shows continuous growth in this sector – the revenue
in the ecommerce market is projected to reach USD 11.2 billion in 2020. The largest segment in this market is fashion, with an expected
market volume of USD 5.1 billion, Statista reports.
Polish consumers have been resistant to change when it comes to using payment methods such as cards – but card usage is gaining
traction, as people turn away from cash and major card schemes (e.g. Mastercard, Visa) become well established. Due to high internet
(78%) and smartphone (66.5%) penetration rates, e-wallets are also growing in popularity. However, the preferred payment method
remains Online Banking e-Payments, with a 52% share of all ecommerce transactions.

In recent years, Polish consumers are displaying a tendency to TOP 5 payments methods for ecommerce
adopt new payment technologies with ease. Experts predict an
increase in the use of electronic payments, driven by factors such 1. Online Banking e-Payments
as: demographic changes (millennials prefer mobile and contactless 2. E-wallets
payments); instruments such as mBank or BLIK and PSD2 driving 3. Debit cards
costs down; streamlined user experience for consumers (via BLIK 4. Credit cards
and mobile payments). Nonetheless, the COVID-19 pandemic is 5. Cash-based payments
expected to slow down Poland’s upsurge.
Cards E-wallets Online Banking e-Payments
Europe - Sweden
General overview
Sweden has been pursuing a cashless society, with cash on delivery accounting for 1% of all ecommerce transactions. The country’s
B2C ecommerce market is worth EUR 12 billion, with travel as the category that Swedish ecommerce consumers spend money on.
Swedes primarily pay by card or invoice (including the pay later option by Klarna), but the mobile payment methods grow in popularity,
Swish being of the most preferred mobile payment app. In 2019, WeChat Pay, Alipay, Garmin Pay, and Fitbit Pay were introduced,
with low adoption so far.
There is a uniformity when it comes to ways to pay per generations; from Gen Z to Baby boomers, they all prefer cashless methods. For example,
83% of 66-74-year-old pay online, and even children are familiar with card payments.

The Swedish Parliament has voted new legislation that requires TOP 4 payments methods for ecommerce
online merchants and checkout providers to adjust the way debit
and credit payment options are presented in the checkout, to reduce 1. Cards
the excessive number of credit purchases. If the checkout has both 2. Pay later/instalments
credit and non-credit payment options, a non-credit option must 3. Online Banking e-Payments
be presented as the first payment option; a credit option cannot be 4. E-wallets
pre-selected. The Riksbank has initiated the e-krona project, and
it has had a dialogue with several national and international players
to get their views on this, and reviewed proposals for appropriate
technology. No decision has yet been made to issue e-krona, the
project is in progress.
Cards Pay later / instalments E-wallets Online Banking e-Payments
Europe - Spain
General overview
In Spain, e-wallets are consumers’ preferred payment method for ecommerce transactions, followed by credit and debit cards. The country’s
ecommerce market is one of the fastest growing in Europe, and one of the main drivers is the upsurge of mobile commerce. Thus, to
streamline the online checkout process, merchants should consider enabling e-wallets.
The B2C ecommerce market accounted for USD 16 billion in 2018, and it was expected to reach USD 19.2 billion in 2020, Statista reports.
The largest segment of the Spanish ecommerce market is fashion, which was projected to reach a USD 5.2 billion market volume in 2020.
However, recently, the outbreak of the COVID-19 pandemic led to stringent confinement measures in the country, and these are expected
to take their toll on both online and in-store commerce, further influencing the payments ecosystem.

Innovation might not be a main characteristic of the Spanish market, TOP 5 payments methods for ecommerce
but in recent years, the Spanish mobile payment providers’ space
has become very competitive. PayPal is the preferred e-wallet, but 1. E-wallets
what catches the eye is the success of homegrown players such as 2. Credit cards
Bizum. Launched in 2016, it initially allowed users to perform P2P 3. Debit cards
payments through a smartphone, but now its features also allow 4. Online Banking e-Payments
B2C payments, integration with voice assistants, and ecommerce 5. Cash-based payments
payments (for more than 300 online merchants).
Europe - UK
General overview
The UK’s B2C ecommerce market is worth EUR 178.5 billion, representing 33.4% of total European ecommerce, also suggesting the
country is one of the most stable economies. PayPal was the most used online payment method in 2019 – according to an Attest survey,
cited by Statista. Other studies show that cards are still the primary way to pay, accounting for 53% of ecommerce payments. E-wallets
usage accounts for 29%, with PayPal leading the way, followed by Google Pay, Amazon Pay, and Apple Pay. The use of cash in the UK
fell by half during March 2020, and the UK is among more than 40 countries that have increased their contactless payment limits since
March of this year. There is also an appetite for biometrics – major banks such as NatWest, HSBC, Barclays, have implemented biometric
authentication, and 54% of consumers plan to use biometrics in the future.

FCA has push the SCA deadline back to 14 September 2021, TOP 5 payments methods for ecommerce
which will have an impact on payments from then on. The Payment
Systems Regulator (PSR) has developed the New Payments 1. Debit cards
Architecture (NPA) to advance a more innovative interbank payments 2. Credit cards
environment. In 2019 Pay.UK launched the Request to Pay service, 3. E-wallets
and in May 2020, they launched the Request to Pay Framework 4. Online Banking e-Payments
– the message standards, rules, and terms and conditions for the 5. Cash-based payments
development of these services. In June 2020, The FCA’s and PSR
rolled out the Access to Cash initiative to ensure the provision of
essential services for consumers, in light of bank branch and cash

machine closures amid COVID-19.
Eurasia - Russia
General overview
Although only 2% of Russians refuse cash in favour of alternative payments in-store – a habit mostly encouraged by Millennials and
Generation X consumers – the ecommerce space has gained momentum in Russia. In 2019, domestic online sales of physical goods
reached USD 22 billion, and the market has the potential to jump to over USD 50 billion by 2023. As of April 2020, 284 million bank
cards were issued, including 194 million active ones. Visa accounts for 47,3% of payments, followed by Mastercard (38%) and MIR
(12.64%). E-wallets perform an important social function, being the most affordable cashless method, popular choices in the exact orders
are Yandex.Money, PayPal, WebMoney, and QIWI.

The faster payment system (FSP) of the Central Bank is developing TOP 5 payments methods for ecommerce
a simplified one-click payment method. The buyer can make a
payment by entering only the phone number or other identifier to 1. Debit cards
which the FSP account is connected, and can then confirm the 2. Credit cards
write-off. Once logged in, the user will be able to make subsequent 3. E-wallets
purchases in just one click. Stores are now testing payment 4. Online Banking e-Payments
acceptance through FSP using a QR code. The retail industry pays 5. Cash-based payments
a lot of attention to the ROPO (research online, purchase offline)
segment, and a new concept has been developed – the financial
store – which can cover all digital payments needs for the ROPO
consumer. There is also significant development of the subscription
models in foodtech, car-sharing (Delimobil) and even in classic retail
(Ozon.ru) markets.
Cards E-wallets Online Banking e-Payments Cash-based payments
Eurasia - Turkey
General overview
With an ecommerce market size of USD 11.6 bln, Turkey is considered rather an emerging market than a mature one. The in-store
payments are still on the rise, even though the pay later/instalments functionalities offered by the big credit card companies are something
of a status quo in the Turkish ecommerce market. Of those shopping online, 30% prefer to purchase via mobile, with additional fintech
companies launching new products, like e-wallets and prepaid card solutions, targeting consumers, especially the unbanked population.
Nevertheless, credit card is the most preferred payment method, with Visa and Mastercard dominating the market. The COVID-19 outbreak
has changed consumer payment preferences, as expected – the number of online shoppers increased to 15% during the pandemic, and
65% prefer to pay contactless. The social commerce has also started to gain ground, with 51 million social network users, and 37 million
users interested in buying via social media channels.

2019 was a good year for Turkey. Mastercard and ING Turkey TOP 3 payments methods for ecommerce
developed the Tap-on-Phone solution that enables small merchants
and SMEs to turn a smartphone into a POS and accept contactless 1. Credit cards
payments via NFC. In the same year, QR code payments had a boost 2. Cash-based payments
– Garanti BBVA employed QR code-based payments capability, 3. E-wallets
UnionPay and DenizBank teamed up for QR code payments, and
Kuveyt Turk and Company fintech enabled payment by ecommerce
sites with QR Code. Ininal becomes Alipay’s partner, thus making
the Chinese payment app available for its consumers. iyzico was
acquired by PayU and launched its brand-new digital wallet named
‘pay with iyzico’ allowing digital sellers to accept payments from
unbanked population.
Cards E-wallets
North America - Canada
General overview
Canada’s B2C ecommerce market is assessed by J.P. Morgan to be at USD 46 billion, the bank evaluating the online shopping in the
country to have developed at a slower pace than the US due to a reluctance from domestic retailers to adapt and start selling online.
However, Canadian retailers have invested in digital platforms to reach customers and to align with global competition. Since 2018,
Payments Canada has delivered regulatory and functional enhancements to the retail batch payments system, implementing a new
credit risk model and allows Canadian businesses to move funds more quickly and make same-day settlements. The organisation rolled
out systems such as the Automated Clearing Settlement System (ACSS) and is currently developing The Real-Time Rail (RTR) – the
provision of irrevocable, immediate funds payments 24/7/365, Lynx, and the Settlement Optimization Engine (SOE).

Payments Canada and the federal government have been working TOP 5 payments methods for ecommerce
on a series of measures to modernise the payment system and the
legislative framework within which it operates, with developments 1. Credit cards

in the system including changes to Canada’s core payments 2. E-wallets
systems, including the development of rails for real-time retail 3. Online Banking e-Payments
payments; legislation meant to define a regulatory regime for PSPs, 4. Debit cards
and initiatives involving blockchain technology applied to payments 5. Cash-based payments
clearing and settlement.
Cards E-wallet Online Banking e-Payments
North America - US
General overview
The United States has a payments B2C ecommerce market size of USD 595.9 billion according to data from the US Census Bureau, paired
with an estimation of the mobile payment industry to record a compound annual growth rate (CAGR) of 6.0% to reach USD 1,074,071 million
by 2025. The mobile wallet payment segment in value terms increased at a CAGR of 5.5% during 2018-2025. According to data provided
by the Congressional Research Service in 2019, US consumers predominantly use payments systems operated by private operators,
with retail online payment services being conducted through instruments such as credit/debit cards or checking accounts. The most widely
used methods of payment across the US are credit cards (predominantly) debit cards, e-wallets, direct debits and credits via an automated
clearing house (ACH), and prepaid debit cards. Lastly, the American ecommerce market has seen a surge in pay-later and instalments
options, with AfterPay, Sezzle, or Klarna on the rise. BNPL has proved its convenience and is predicted to continue to grow at a rapid pace.

In August 2019, the Federal Reserve has announced it plans to TOP 5 payments methods for ecommerce
create an interbank real-time payments (RTP) system by 2023 or
2024, stating that the new system will be available to all banks 1. Credit cards
with a reserve account at the Fed. According to Paysafe data, The 2. E-wallets
Clearing House has been scaling its real-time payments network 3. Debit cards
throughout 2019, with plans to accelerate in the next year and work 4. Pay later/instalments
with PSPs, banks, and credit unions to make sure that all financial 5. Online Banking e-Payments
institutions in the US have access to the Real-time Payments
Network before the end of 2020.
Cards E-wallets Online Banking e-Payments Pay later/instalments
Latin America - Brazil
General overview
With an ecommerce market value evaluated at USD 23.8 billion, digital solutions are rising in prevalence across the Brazilian payments
industry. Pagbrasil justifies this increased move to the online, apart from the 2020 recession, through higher smartphone usage, mobile
proximity payments, and e-wallets availability and affordability. Brazilian consumers are considered proficient users of credit cards, most
of them preferring credit cards for their online purchases. After the likes of Visa and Mastercard, local card scheme ELO is growing in
popularity, while 15% prefer cash-based methods such as Boleto Bancário. As of October 2018, a cap has been set on debit card fees
paid by businesses to card issuers. Interchange fees are capped at 0.8% of transaction values and can average no more than 0.5%.

According to Brazilian payments association Pagos, one of the TOP 5 payments methods for ecommerce
most relevant changes prepared by the Central Bank of Brazil is
the instant payments system PIX – to be implemented starting 1. Credit cards

with November 2020 –, an infrastructure that will allow for instant 2. Pay later/instalments
payments, electronic money transfers in which the transmission 3. E-wallets
of the payment order and the availability of funds to the receiving 4. Online Banking e-Payments
user takes place in real time. As the most important objectives of 5. Debit cards
PIX are lowering transaction costs, increasing security, promoting
financial inclusion.
Cards Cash-based E-wallets Online Banking

payments e-Payments
TED and DOC

money transfers
Latin America - Mexico
General overview
Worldline data places Mexico as accounting for over 12% of LATAM’s ecommerce sales. The country’s ecommerce market is growing at
a rate of 20% a year and is expected to reach USD 52 billion by 2021. However, it is worth mentioning that with almost 60 million internet
users in Mexico, this is less than half of the country’s population. Even with big divides in the country, among the banked and mobile
savvy user segment, Adyen assesses that the numbers of online consumers in Mexico are expected to grow, as mobile commerce already
takes a significant share of the overall ecommerce market, accounting for 34% of all transactions or USD 7.7 billion in sales, according to
J.P. Morgan. Debit card penetration is high in the country, with cash on delivery and digital wallets tie as the second-most used payment
method, each taking a 17% share of the overall online payments market.

According to Euromonitor, Mexican consumers are forecasted TOP 5 payments methods for ecommerce
to increase their use of all types of financial cards. Debit card is
expected to remain the most popular, and with the average spend 1. Debit cards
per card being lower than credit cards. The following period also 2. E-wallets
expects a rise in the use of the CoDi digital payments platform 3. Cash-based payments
launched in 2019. Provider Banxico seeks to encourage the popu 4. Credit cards
lation to use banking services and make digital payments affordable 5. Online Banking e-Payments
for everyone, while improving the prevention of money laundering.
Cards Cash-based payments E-wallets Online Banking e-Payments
Asia-Pacific - China
General overview
China has proven to be a nation of smartphone adepts, as mobile and digital wallets are now used to pay for the majority of ecommerce
payments. As per Statista, its revenue in the ecommerce market is expected to reach USD 1,057,047 million in 2020. The most dominant
digital wallet brands include Alipay, an Alibaba payment vehicle, and Tencent’s WeChat Pay. Cards (debit + credit) take the second most
popular payment option. However, to operate within the country, international card providers and payment processors must apply for a
license. In November 2018, a joint venture between AMEX and Lianlian Pay had AMEX become the first international card provider to be
granted the right to establish a payment network and card payments. Currently, UnionPay has control of 90% of the market, and Visa and
Mastercard can issue co-branded cards with China UnionPay.

‘Super apps’ and social sharing see an increase among internet TOP 5 payments methods for ecommerce
users. WeChat is a ‘super app’, which offers a full range of shopping,
lifestyle, entertainment, and payment services. Its most dramatic 1. E-wallets

innovation includes Mini Programmes – sub-applications within the 2. Credit cards
WeChat app –, while social sharing is the leading discovery method 3. Online Banking e-Payments
for Mini apps. Another widely spread development is facial payments 4. Debit cards
technologies, such as Alipay’s upgraded ‘Smile to Pay’ system or 5. Cash-based payments
Tencent’s facial payment machine, ‘Frog Pro’. On 21 January 2020,
the Payment & Clearing Association of China (PCAC) issued
the Industry Self-discipline Guidelines for Facial Recognition

Payment, which highlights principles on security management,
terminal management, risk management, and user rights protection.
Cards E-wallets
Asia-Pacific - India
General overview
Although, traditionally, India has been a cash-dominated economy, the country sees digital wallets as being one of the fastest-growing
payment method. Airtel Money and PayPal are two popular digital wallets used in India. This growth of e-payments is due to the Indian
government, which introduced its demonetisation exercise in November 2016, allowing initiatives such as Rupay and UPI (Unified Payment
Interface). However, cash still remains significant for India’s online payments market due to the popularity of cash-on-delivery methods.
These allow ecommerce merchants to reach unbanked and rural customers, and to reduce the risk of losses in case of non-payment
because when a receiver does not pay, the item is returned to the merchant. India’s ecommerce market value was worth USD 36.5 bln,
J.P. Morgan reported in 2019.

The Indian government has started to undertake a series of schemes TOP 5 payments methods for ecommerce
including ‘Digital India’ and ‘Skill India’ to facilitate the move towards
digitalisation. For instance, Google announced a number of new 1. E-wallets

Google Pay initiatives designed to aid small and medium-sized 2. Debit cards
businesses to accept digital payments in India. Also, 2019 allowed 3. Credit cards
the country to adopt a wave of new P2P services, such as Paytm, 4. Online Banking e-Payments
WhatsApp Pay, and Amazon Pay, while the Reserve Bank of India 5. Cash-based payments
(RBI) revealed its ‘Payment and Settlement Systems in India: Vision
2019–2021’, which outlined 36 action points to move India towards
a cashless society, focusing on financial inclusion, innovation,

e-payment options, cybersecurity, and customer protection.
Cards E-wallets Online Banking

e-Payments
Asia-Pacific - Japan
General overview
In Japan cards – debit and credit – are mostly used to pay for online shopping. One local credit card used is JCB, but international credit
cards are also very popular. Bank transfers or furikomi are positioning on the top list of preferred payment methods in Japan, with
PayEasy being a favoured domestic bank transfer service, which allows payments at post offices, banks, and automated teller machines.
Digital wallets in Japan are mostly offshoots from ecommerce brands, like Yahoo! Wallet, Rakuten Wallet, Suica, and PayPal. Despite
Japan’s adoption of new technologies, cash use is still significant, which is explained by the large ageing population’s reluctance to adopt
smartphones, as well as by the country’s konbini – convenience stores that accept cash payments within six days for online purchases.
In 2019, J.P. Morgan suggests the country’s ecommerce market value was worth USD 150.1 bln.

Japan pushes itself towards becoming cash-free by employing QR TOP 5 payments methods for ecommerce
code payments, digital wallets, cryptocurrencies etc. to boost a
cashless payment economy, while ecommerce companies invest 1. Credit cards

in mobile infrastructures. Rakuten announced in 2019 the launch 2. Pay later/instalments
of its Rakuten Mobile network, and in 2020 it partnered with Nokia 3. Online Banking e-Payments
for an end-to-end fully virtualised cloud-native 5G mobile network. 4. E-wallets
5. Cash-based payments
Cards Cash-based payments E-wallets Online Banking e-Payments
Asia-Pacific - Singapore
General overview
Singapore is a major ecommerce market in Southeast Asia, with its ecommerce market value being worth USD 4.9 billion. The primary
used payment method in the country is by far cards, with Visa as one of the most popular card brands. Digital wallets are gaining momentum,
as Singaporeans prefer international brads such as PayPal, Google Pay, Samsung Pay, and Apple Pay for online shopping, as well as local
providers like online payment method eNETS, which allows real-time payments via customers’ bank accounts, and Asia’s largest super
app, GrabPay.

The government of Singapore wants to lead the country towards TOP 5 payments methods for ecommerce
becoming a cashless society, by encouraging its population to
embrace online shopping. The end result is to become a technology- 1. Credit cards
driven ‘Smart Nation’. For this goal and to increase consumers’ 2. E-wallets
confidence in online shopping, the government has strengthened 3. Debit cards
the regulations around intellectual property rights for ecommerce. 4. Online Banking e-Payments
Also, Enterprise Singapore (ESG) revealed the ‘Singapore 5. Pre-paid cards
E-Commerce Programme’ that was built in collaboration with
ecommerce platforms Amazon, Lazada Singapore, Qoo10, and
Shopee, and which aims to support SME retailers with little or no
ecommerce experience to begin online trading.
Africa - Kenya
General overview
Kenya has many unbanked citizens, yet it has a growing ecommerce sector and one of the most mature electronic payment methods in
the world. Smartphone penetration is extremely high here, with 90.4% of Kenya’s population owning one, and approximately 50% of them
use smartphones to make payments. Considering the reduced traditional banking facilities, debit and credit cards have low penetration
in this market. Revenue in the Kenyan ecommerce market is expected to reach USD 1 billion in 2020. Statista projects that it will grow at
an annual rate of 19.7%, resulting in an approximated market volume of USD 2 billion by 2024. There is a large appetite for products that
are not accessible within Kenya. These products are mainly ordered via ecommerce platforms such as eBay, AliExpress, and Amazon.
Additionally, export is also popular in Kenya, as there is a large appetite from Europe and Asia for authentic African products.

Ecommerce has been a challenging space in Kenya due to TOP 3 payments methods for ecommerce
infrastructure gaps and customers’ reluctancy. Other than the huge
success of mobile money, physical goods need to be delivered, 1. E-wallets

which requires logistic infrastructure. This logistic infrastructure has 2. Cash-based payments
been lacking, making ecommerce restricted to larger cities such as 3. Online Banking e-Payments
Nairobi and Mombasa. In Kenya, ecommerce is very popular among
millennials living in larger cities, such as Nairobi, and the preferred
products purchased online are FMCG, electronics, and fashion.
The drivers for ecommerce in Kenya are mobile connectivity, online
payments, and logistical infrastructure. In the last couple of years,
several private players specialised in logistics have stepped in,
providing the crucial last-mile delivery logistic part (Lori Systems,
Kobo360, Sendy). Moreover, in Kenya, DHL recently introduced DHL
Express, a platform that provides a standard for organising transport
and logistics for ecommerce within the East African region.
E-wallets Online Banking e-Payments
Africa - Nigeria
General overview
According to Nigeria Inter-Bank Settlement System, while traditional payment instruments – including cash on delivery, bank transfers, and
payment cards (Paystack) – are the preferred payments methods for consumers in Nigeria, there are several alternative payments operators
such as KongaPay, Paga, and PocketMoni that have a way lower traction. As part of its Financial System Strategy 2020, the Central Bank
of Nigeria is focusing on financial inclusion by bringing unbanked consumers under the purview of the banking system, while mobile money
operators and telecom companies are actively participating in the financial inclusion programme initiated by the central bank (without
significant impact as of yet). The current higher turn for the digital comes also in the advent of a rise in the economically active population
and the gradual acceptance of cards among retailers.

According to the Nigeria Inter-bank Settlement Scheme (NIBSS), TOP 5 payments methods for ecommerce
the volume of digital payments grew 494% in 2019. However, a
GlobalData report states that the Nigerian payment cards market is 1. Debit cards
anticipated to continue to slow down, as a result of a ban imposed by 2. Cash-based payments
the Central Bank of Nigeria since 2015. The rise of national, regional 3. Debit cards
and merchant, and microfinance banks is likely to accelerate a 4. Online Banking e-Payments
shift towards electronic payments in the country and alternative 5. E-wallets
payments that offer security and convenience are gradually gaining
prominence, with banks and PSPs launching more and more
services to appeal to consumer payments.
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Payment Methods Report 2020 Whats New in The Way People Prefer To Pay

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Insights into Payments

Payment Methods Report 2020

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the acceleration of contactless payments driven by the COVID-19 pandemic.

abandoned an intended purchase because there weren’t enough payment methods.

authentication, thus driving conversion.

By delving into this report, our readers will find:

• insights into A2A payments, Request-to-Pay, and Open Payments;

• best practices for a high-converting checkout;

• a countries’ research overview of payment methods and the latest developments.

Insights into A2A payments, Request-to-Pay, and Open Payments

3 Payment Methods Report 2020 | ﻿ MANAGEMENT SUMMARY

that they will launch PIS in 2020.

How COVID-19 pushed digital transformation forward

digital transformation at large.

merchants being urged to strengthen their omnichannel capabilities.

may not be able to keep pace with the current dynamic.

‘The future of payments is digital-first’

services to retail consumers in China. ➔

4 Payment Methods Report 2020 | ﻿ MANAGEMENT SUMMARY

rails and platform.

don’t have to upgrade their terminals.

The global overview of payment methods and the latest developments

Giropay, and a Pay by Invoice option to the checkout page.

Anda Kania | Senior Editor | The Paypers

5 Payment Methods Report 2020 | ﻿ MANAGEMENT SUMMARY

8 Payment Methods Featured – Latest Trends and Developments

13 Zooming Into Account-to-Account Payments

28 The COVID-19 Pandemic – An Influencing Factor Into Ways People Pay

48 Checkout Optimisation and Customer Conversion

6 Payment Methods Report 2020 | TABLE OF CONTENTS

62 Disruptive Technologies and Solutions Shaping the Way People Pay

71 Payment Methods and Latest Developments – The Global Overview

7 Payment Methods Report 2020 | TABLE OF CONTENTS

Anda Kania Senior Editor The Paypers

among customers’ behaviour, while also making businesses to payments.

adapt immediately to something that one calls it ‘the new normal’.

consumer. In this paragraph we will list some of the methods.

trends; mobile or desktop. With the great rise of card-not-present trans­

Invisible payments The Click to Pay option

advancing the development of frictionless payments. Of hundreds

to make payments in China could soon be a thing of the past, as

companies have noticed that cryptocurrencies have a long-term

Biometrics and Venmo partnered to buy and sell cryptocurrencies, yet no

15.5 trillion. Biometrics are a good element of convenience, hence

and customers. receive this type of license. ➔

global ecommerce spend by 2023. In the last 12 months, several

into the savings market, focusing more and more in becoming

will rise in Europe, it is likely for a digital bank to be the trendsetter,

Considering a crisis that is likely to come along with the pandemic,

factors: the solution providers that manage to dominate a specific

market and encourage consumers to use ‘pay later’, as Klarna does

in Sweden, or the customer behaviour driven by a developing

economy, like it happens in many countries from Latin America.

preference for in-store payments. At some point, in-store shopping

directly from their bank account in real-time, without needing to

mer experience. Now convenience goes beyond simple frictionless payments:

3 Payment Methods Report 2020 | MANAGEMENT SUMMARY

4 Payment Methods Report 2020 | MANAGEMENT SUMMARY

5 Payment Methods Report 2020 | MANAGEMENT SUMMARY

trends; mobile or desktop. With the great rise of card-not-present trans

invoice number) into the payment enables automated and success

4. Some PSD2 APIs require the payer to provide manually typed