Lower costs, "portability" boost the growth of alternative online payment systems - report

In spite of the availability of numerous traditional payment choices (credit and debit cards) at checkout, alternative online payment platforms such as PayPal, Amazon Payments and Google Checkout, continue to gain market share, to the detriment of the incumbent players in the payments field, according to a report.

The “Alternate Payments: Disruptive Technology or Just an Online Ally for Traditional Payment Providers?” study identifies two main factors which have contributed to the growth of these alternative payment options: the promise of lower costs for merchants and the portability of online payments, which enables consumers to checkout with a single user name and password, without the need to disclose credit card details.

Alternative payment schemes still rely heavily on card-based payments. Until the knotty problem of lower cost funding sources gets solved, card-backed payments will predominate, despite the attractive value proposition alternative platforms provide to consumers and merchants alike, according to the main analyst of the report, George Peabody, the director of Mercator Advisory Groups Emerging Technologies Advisory Service.