Alternative payment methods that are becoming mainstream
Sometimes it feels like hardly a week goes by without the launch of some new fintech company, digital wallet or blockchain-based payments platform. Many of the companies seem to be variations on a theme and their innovations are minimal. Adding to the confusion is the fact that many of the payment methods and processors serve completely different needs and use different technology.
However, alternative payment platforms and methods are the future and a number of them are becoming increasingly popular. It is likely that in the next decade, alternative payment methods will eclipse more traditional payment types, so it is worth taking the time to understand them now.
What are alternative payment methods and why are they important
The term “alternative payment methods” is very broad and encompasses dozens of different types of payment methods. Essentially, every payment method that is not either cash or a major credit or debit card is considered an alternative payment method.
Some payment methods, such as prepaid cards, bank transfers and money orders, are very commonplace. Increasingly, however, there are new forms of payment being developed, such as digital wallets, mobile payments and cryptocurrency payments.
Below are a few of the alternative payment methods that are becoming increasingly popular and mainstream.
Online banking, transfers and direct debit
Although you may be more familiar with online banking, bank transfers and direct debit options, these are also considered alternative payment methods. The term “online banking” refers to any payment that is made from a bank account in which the user does not have to enter their credit card details.
Digital wallets
One of the most ubiquitous payment forms is digital wallets, which are basically prepaid accounts that consumers can use to make purchases online. Digital wallets such as PayPal, Neteller and Paysafe are now incredibly popular and can be used on a majority of e-commerce sites. Digital wallets are often preferred over other online payment methods because they provide the purchaser with additional security.
Mobile payments
Mobile payments are, unsurprisingly, payments that are made via a consumer’s phone. You may have seen people paying for their coffee using their smartphone – these people are using a mobile payments provider to do so.
A few of the biggest mobile payments processors are Apple Pay, Google Pay and Samsung Pay. As with most other mobile technology, mobile payments are becoming increasingly popular because they are particularly convenient.
Cryptocurrencies
Cryptocurrencies are one of the newest additions to the space, and certainly one of the most volatile. Stable, established cryptocurrencies are more likely to be accepted, rather than those that are more left-field, small and unique. There are actually thousands of different cryptocurrencies, so it is worth taking the time to do your research before choosing a cryptocurrency to invest in.
Cryptocurrencies such as Bitcoin and Ethereum are typically considered the most stable and are more widely accepted as payment. The entire cryptocurrency space and the blockchain form are just starting out and it will be interesting to watch as this space develops, innovates and matures.
How it works in the real world
You may not have used or even heard of a few of these payment methods. However, you will likely see them offered as payment options more often.
One sector that has led the charge to the new frontier of alternative payment methods is the online casino industry. Many online gambling platforms offer several different payment methods so that gamblers can choose their preferred method, depending on their preferences related to security, convenience and privacy.
It has become increasingly apparent to the online gambling sector that gamblers appreciate freedom of choice and access to a variety of different payment methods. Gamblers can now even find the casinos with the best variety of casino banking methods on sites such as Playcasino.co.za, and this has become a competitive factor in the industry.
What the future holds
Although no one knows what the future holds, the number of alternative payment processors now available, coupled with the mainstream acceptance of new payment types, is promising. It appears likely that the different methods by which individuals can make payments will continue to increase and consumers will have more and more freedom when it comes to making payments.
The variety of payment methods should be welcomed by consumers and consumer rights groups around the world. Big banks and processors no longer have a monopoly on the payments space and will eventually be phased out if they maintain their high fees and outdated terms and conditions.
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