For decades the big four credit card vendors, Visa, Mastercard, Discover and American Express have had a lock on non-cash consumer purchases. While these institutions continue to be responsible for a huge amount of retail transactions, their dominance has been eroded in recent years by the rise of alternative payment methods.
From a consumer’s perspective, the ability to access alternative types of payment may be attractive when access to banking institutions is limited. Additionally, for consumers without any or much of a credit history, these methods can offer access to payment functionality they aren’t able to access through the traditional banking and credit system.
The use of alternative payment methods has grown to the point where it is now thought to make up in excess of half of all ecommerce transactions. Thus, as a merchant, if you don’t accept any of these payment types it could cause you to lose out on sales revenue from consumers who use them. For merchants who have many younger customers who are more inclined to utilize these methods, this can represent significant lost revenue.