Alternative Payments are of the Essence ─ Why They Matter for Online Merchants

Today’s technology has given rise to alternative payment companies of all shapes and sizes looking to transform the way we store, access, transfer and spend our money online. According to Scratch/Viacom Media Networks’ 2014 Millennial Disruption Index, 70% of the highly influential Millennials demographic believe that in five years, the way we pay for things will be completely different. The company surveyed more than 10,000 Millennials (people who reached young adulthood around the year 2000) over three years and yielded some eye-opening results. What shines through is the stony attitude of Millennials towards traditional payment methods and their willingness to embrace alternatives.

Around 50% of Millennials believe that in today’s market, with today’s technology, it doesn’t make sense that we mostly still rely on cash, debit and credit cards to pay for things. Indeed 68% of those surveyed expect that we will access our money in entirely new ways in five years’ time. The opinions of this demographic (which, according to Scratch/Viacom, numbers more than 84 million strong in the US alone) are borne out in a recent report, which suggests that by 2017 alternative payment methods will represent more shopper spend online than cards. So, what does this mean for merchants?

Simply put, more payment options means more sales. Adopting just one alternative payment method (such as PayPal, which currently has 57% of the market) alongside your current accepted payments can open your virtual shop door to an even wider audience than offering cards alone. You will reach those who prefer not to use their credit or debit cards online, and indeed those who do not have a credit card at all. This includes the lucrative under-18s market, where young people have money to spend but no access to traditional payment cards. You can also convert more customers by offering them a payment method that they are comfortable with.

So, who should you look out for in the alternative payments arena  aside from PayPal?

Apple Pay

apple pay
Apple Pay, Apple’s mobile payment system, is expected to hit the UK in April 2015, following a successful launch across the pond. As with all things Apple, it launched to great fanfare  but unlike other mobile payment systems, it seems to be living up to its hype with many big-name merchants on board from day one and deals in the bag with Visa, MasterCard and American Express. Apple Pay is perhaps best known for its potential to revolutionise payments in bricks-and-mortar stores through the adoption of NFC or ‘contactless’ technology and fingerprint recognition within iPhones, but it can also be used to buy mobile apps, or to make purchases within apps such as Uber and Groupon. It currently does not support shopping on websites. Apple Pay utilises tokenisation, which replaces the credit card number with a randomly generated number, as an added level of security.


master pass

MasterPass is a digital payment service that allows your customers to pay anywhere and anytime on a smartphone, tablet or computer via a single checkout button on your website. It covers in-store and online payments and supports both QR codes and NFC. In addition to MasterCard cards, consumers can use other branded credit, debit and prepaid cards. MasterPass is accepted at more than 40,000 merchants globally. To offer MasterPass as a checkout option, merchants must accept MasterCard-branded payment cards. by visa is a secure digital wallet service provided by participating banks and supported by Visa. lets users check out at online stores using a one-click solution that remembers card details from multiple providers (including MasterCard and American Express cards) as well as billing details and postal addresses. This eliminates the difficulties of  and associated typos with  entering such data on small smartphone screens, making for a much better user experience.


Google Wallet

google wallet

Launched in 2011, Google Wallet has been around for a while, but hasn’t really caught the public’s attention as effectively as, say, Apple Pay. It supports in-store payments through the use of NFC technology, as well as online payments ─ but for physical goods only, as Google Wallet officially stopped accepting and processing payments for digital goods such as music, e-books, subscriptions and games on 2 March 2015. Google uses a cloud-based tokenisation process, with payment data stored on Google’s servers instead of on the device.

Hopefully this blog has piqued your interest in alternative payments and how they can benefit your business. It’s important, though, to look past the big-name brands and flashy logos and really understand each method and its relevance to your business before you proceed with adoption.


  • How many consumers and merchants use the method of payment?
  • What is the typical revenue increase in my market segment?
  • Can the method of payment be used across all my sales channels?
  • Is there support for one-time payments and recurring payments?
  • How many days does it take for me to be funded for the transactions?

*Source: Ecommerce Times, Alternative Payments: More Ways to Close the Sale

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