5 alternative payment trends to watch

1Simple and secure bank-to-bank payments and transfers

Services and solutions that enable bank-to-bank payments, account-to-account payments, open banking, or bank transfers are also becoming essential to people who like their simplicity and security. In fact, in countries where banking authorities have taken the initiative to create or adopt bank-to-bank transfers, these new payment methods have often become the hands-on favorites.

In the Netherlands, several Dutch banks, including ABN Amro and ING bank, created iDEAL , a payment method that lets customers complete transactions online using their bank credentials. Now, iDEAL is one of the country’s most popular payment options – 70% of all e-commerce transactions are processed with iDEAL.²

In Poland, a handful of banks created the BLIK payment method which lets users pay for purchases online and in store, send money to others, and withdraw and deposit money at ATMs. BLIK is now used for almost 60% of all payment transactions in the country.³

This trend may also be driven by the fact that banks are viewed favorably by their customers in terms of providing alternative payment methods. According to a global payments consumer survey from Accenture, 84% of consumers trust their banks to manage their payments securely.⁴

While some governments are requiring banks to use specific payment standards, some governments are even creating their own online payment solutions.

2BNPL embraced by customers, thanks to simplicity and flexibility

Flexibility. Convenience. Simplicity. With qualities like this, it’s no wonder that buy now, pay later (BNPL) options are a favorite with shoppers. In one survey, 81% of respondents said that BNPL offers consumers unique benefits, like payment flexibility⁵. BNPL options can also give customers a higher comfort level when shopping: 82% of PayPal BNPL users surveyed trust PayPal to make purchases from another country.⁶

In addition, people’s desire for choice and ease of use at checkout are both offered by BNPL payment options. Sixty-three percent of consumers surveyed in the United States, United Kingdom, Australia, France, and Germany said that optimized checkout experiences are important to the ideal shopping research and buying experience when paying for a product.⁷

3The rise of digital wallets

People are finding a lot to like about digital wallets. Once they enter their credit card information in wallets such as Apple Pay, Google Pay, and Venmo, they don’t need to do it again. This reduces checkout friction and lets customers buy with just a click online or a touch in a real-world retail store. The ease of use and security of digital wallets have helped build trust, with 40% of people saying that digital wallets are their most trusted payment method after credit and debit cards (49%).⁸

Friction-free ease of use is likely one of the reasons digital wallets have the largest market share of e-commerce transaction value worldwide: 49% in 2022, and predicted to reach 54% by 2026.⁹ And users stick with their digital wallets. For example, for PayPal digital wallet users, the churn rate – the percentage of customers who stop using a service – is 25% less than the rest of the PayPal customer base.¹⁰

4Banks launch their own digital currencies

Central bank digital currencies (CBDCs) are issued by central banks, with the value of the currency linked to a country’s official currency. Many countries are either piloting digital currencies or considering launching these alternative payment methods. As many as 93% of the world’s central banks are testing some form of CBDC, and about 24 banks are expected to have one in circulation by 2030, including Swiss National Bank and the European Central Bank.¹¹

Why are CBDCs a likely APM trend, even though they’re still in the planning stages? Banks want to be viewed as innovators, and they’re eager to compete with fintech’s cross-border transfer solutions.¹² The benefit for people is that they have another convenient digital currency that’s backed by the strength of central banks.

In addition, there’s interest in digital currencies from people who’ve already dipped their toes into the cryptocurrency market. According to a McKinsey survey, about one-fifth of respondents – including 22% in India, 20% in Brazil, and 14% in the United States – said they held digital assets as part of their financial portfolios.¹³

5"Super-apps" streamline payments

A “super app” for payments includes all types of traditional and alternative payment methods in one solution. Accenture found that “56% of consumers want a single app for all payments, and 60% want a single app to track payments from all payment providers.”¹³

The super-app trend makes sense, given people’s partiality for digital wallets and bank-to-bank transfers. As of mid-2023, there aren’t that many super apps on the market, and most of them are in the Asia-Pacific, such as WeChat, Alipay, and Meituan in China; PayTM and Tata Neu in India; GoTo GoJek in Indonesia; and Zalo in Vietnam.¹⁴ However, the PayPal app has evolved to include Venmo and BNPL options, as well as letting customers pay using their credit cards and bank credentials.