In Europe, card payments remain among the most popular payment methods for e-commerce transactions. However with increased safety concerns and high merchant costs, across the continent a growing number of consumers are turning to alternative payment methods to complete their transactions. Mercator Advisory Group’s latest research note, European E-Commerce Alternative Payment Providers Gaining Momentum, examines five of the leading alternative payment solutions for e-commerce transactions in Europe (excluding PayPal). The note describes the underlying business models and compares the solutions across indicators like customer and merchant acceptance network size, whether they operate in real time, and security features, highlighting the advantages or disadvantages of each solution.

1. European E-Commerce Alternative Payment
Providers Gaining Momentum
August 2015

2. 2015 Mercator Advisory Group
In Europe, card payments remain among the most popular payment
methods for e-commerce transactions. However with increased safety
concerns and high merchant costs, across the continent a growing number
of consumers are turning to alternative payment methods to complete their
transactions.
Mercator Advisory Group’s latest research note, European E-Commerce
Alternative Payment Providers Gaining Momentum, examines five of
the leading alternative payment solutions for e-commerce transactions in
Europe (excluding PayPal). The note describes the underlying business
models and compares the solutions across indicators like customer and
merchant acceptance network size, whether they operate in real time, and
security features, highlighting the advantages or disadvantages of each
solution.
Can Alternative Payment Methods Challenge
Cards for E-Commerce Transactions?

3. 2015 Mercator Advisory Group
“With growth opportunities present across the continent, the expansion of leading
alternative e-commerce payment service providers into new markets is justifiable.
These new service providers promise consumers and merchants a safe,
convenient, and cost-effective means of completing e-commerce transactions.
Their reported growth and popularity in select European markets means that they
are becoming a viable alternative to the traditional e-commerce payment methods
that use consumer debit, credit, or prepaid cards,” comments Tristan Hugo-Webb,
Associate Director of the Global Payments Advisory Service and the author of the
research note.
Tristan Hugo-Webb
Associate Director,
Global Payments Advisory Service

4. 2015 Mercator Advisory Group
• Statistics regarding the size and dynamics of the European e-
commerce market as well as statistics on leading alternative payment
service providers
• Examination of the two operating models used by providers
reviewed—online banking e-payment and escrow service—and their
advantages and disadvantages
• Commentary on the dynamics likely to impact the growth of alternative
payment service providers and their potential to challenge cards as a
primary payment method for e-commerce transactions
Highlights of the research note:

5. Table 1: Benchmarking European Alternative Payment
Service Providers
Sources: Company websites, Mercator Advisory Group
Solution iDEAL MyBank Sofort* Trustly Klarna *
Launched 2005 2013 2005 2008 2005
Market Proposition Online banking
e-payments
Online banking
e-payments
Online banking
e-payments
Online banking
e-payments
Escrow
Number of Countries Live 1 (Netherlands) 6 13 8 18
Transaction Volume, 2014 180 million NA > 36 million 7 million >30 million
Number of Merchants > 100,000 NA > 30,000 NA 55,000
Number of Customers 10 million
(available to all
bank account
holders in
Netherlands)
Can reach 30
million by end
of 2015
18 million Can reach 67
million
35 million
*Sofort was acquired by Klarna in 2014.
©2015 Mercator Advisory Group

6. About the research note:
2015 Mercator Advisory Group
This research note contains 12 pages and 3 exhibits.
Companies mentioned in this research note include: iDEAL, Klarna, MasterCard, MyBank, PayPal, Sofort,
Trustly, and Visa.
Members of Mercator Advisory Group’s Global Payments Advisory Service have access to these reports
as well as the upcoming research for the year ahead, presentations, analyst access, and other membership
benefits.
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send email to media@mercatoradvisorygroup.com.
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About Mercator Advisory Group
Mercator Advisory Group is the leading independent research and advisory services firm exclusively focused
on the payments and banking industries. We deliver pragmatic and timely research and advice designed to
help our clients uncover the most lucrative opportunities to maximize revenue growth and contain costs. Our
clients range from the world's largest payment issuers, acquirers, processors, merchants and associations to
leading technology providers and investors. Mercator Advisory Group is also the publisher of the online
payments and banking news and information portal PaymentsJournal.com.

7. About Mercator Advisory Group
Mercator Advisory Group is the leading independent research and advisory
services firm exclusively focused on the payments and banking industries. We
deliver pragmatic and timely research and advice designed to help our clients
uncover the most lucrative opportunities to maximize revenue growth and
contain costs.
Our clients range from the world's largest payment issuers, acquirers,
processors, merchants and associations to leading technology providers and
investors. Mercator Advisory Group is also the publisher of the online payments
and banking news and information portal PaymentsJournal.com.
2015 Mercator Advisory Group