This slide deck contains key information regarding APMs in 2019. Topics covered: - What is an Alternative Payment Method -Types of Alternative Payment Methods - Advantages of Alternative Payment Methods - The Future Outlook

1. Alternative Payment Methods
By PaymentGenes

2. Agenda
What are Alternative Payment Methods?
Types of Alternative Payment Methods
Advantages of Alternative Payment Methods
Future Outlook

3. What are Alternative Payment Methods?
o Alternative ways of paying that don’t rely on traditional payments(e.g.
cards/immediate exchange of funds).
o Globally there are more than 200 Alternative Payment Methods
o Instead of being limited to one payment model, businesses can integrate
different, more flexible options in their eCommerce business.
o Customers buy from everywhere in the world, but payment methods differ by
geography.
What does that mean for the business?
➢ Essential to understanding how customers want to pay.

4. Payment Value Chain
Position of APMs within the PVC
Merchant PSP Acquirer Schemes
Issuer/
Banks
APM Processing

5. Different types of APM’s

6. 1 2 3 4
5 6
Bank Transfer eWalletDirect Debits Mobile
Local Card
Schemes
Prepaid/Instant
Financing
Types of Alternative Payment Methods

7. 1. Bank Transfer
o Consumers can use their regular bank account
details to make an immediate payment.
o Guaranteed payment for merchant.
o Consumer gets redirected to separate login page.
➢ Predicted to become the second most popular
payment method globally by 2021*

8. 2. Direct Debits
o Primarily low-value and/or predictable
recurring transactions.
o Can be scheduled, even if consumer does not
have the money available = risk of chargebacks
is much higher than with other payment
methods.
o Despite risk of chargeback, still popular for
regular payments.

9. 3. eWallet or Digital Wallet
o Secure place that contains one or more
currency purses.
o Users pay using their mobile device.
o Easy to use; typically using an app that allows
shoppers to link a credit card to the account
(for example).
➢ Expected to make up 46% of all global
payments by 2021 = fastest growing payment
method across the globe

10. 4. Mobile
(1) Direct Carrier Billing
o Especially important in developing
markets.
o Shoppers pay by providing their phone
number
o E.g. Boku
(2) Mobile Wallets
o See eWallets
o Growing choice of mobile wallet payment options
(e.g. ApplePay)

11. 5. Local Card Schemes
o Function like traditional cards, yet function
only in specific markets.
o If cards have large local market shares, they are
an opportunity for business to grow cross-
border.

12. 6. Prepaid/Post-pay
(1) Pre-pay
o A card or voucher has to be bought or topped
up to make a transaction.
o Usually authorised immediately.
(2) Post-pay/Instant financing
o Customer can buy a product online and can
pay for it later.
o Flexibility in payment terms: ‘try before you buy’.

13. Why businesses provide APMs

14. Advantages of Alternative Payment Methods
o ‘Trash the cash’.
o Additional recurring revenue:
o What if card gets declined? With offering APMs you offer more options that
a payment gets accepted.
o Boost in Sales:
o E.g. Paypal = Boost of almost 50% in conversion when integrated.
o Globally relevant:
o If your business is not limited by geography, why limit your payment
methods? PayPal or Amazon Pay are globally known.

15. Advantages of Alternative Payment Methods
o Trust factor:
o Many customers are not comfortable sharing their data on unknown sites.
o If there is the option to use a familiar brand, they are more likely to do so.
o Strict rules:
o Some gateway rules in certain countries don’t allow cross-border
payments .
o APMs that function cross-border could solve that issue.

16. Why businesses offer APMs

17. Future Outlook
o Product ! Concept ! Mainstream ! Norm
o By end of 2019: 55% of all online transactions will be done using APMs.*
o UnionPay & Huawei: teaming up to bring Huawei Pay to Russia = APMs are spreading to
different parts of the world.
o India in the spotlight for PayPal & Google Pay
Reduce population reliance on cash.
* ACI Worldwide | What Is the Link between Payment Methods and Conversion Rates?

18. Future Outlook
o WeChat: rolled out digital payment platform in Malaysia.
! Firm is building local payment service instead of expanding overseas for Chinese
users to pay with when traveling.
o Points Pay: e-payment solution that enables members to participate in loyalty
programs to redeem points & miles in stores.
o Cash Persistence: In countries such as
South Africa & Saudi Arabia cash still
accounted for 60% & 37% of their GDP.