1. Will alternative payments ever take over the majority of payment transactions? Alternative in my mind means phone companies, cash alternatives or any other form of payment which bypass MC and V.
2. Will MC and V issuers have to rethink what they charge as interchange fees?
I though i would share my comment and i am anxious to here your thoughts.
Clearly alternative payment mechanism will continue to gain share. That said its likely to be a very long time before there is significant cannibalization of plastic transactions, expect in emerging economies where plastic penetration is low today anyways.
As you might expect MC, Visa and AmexÂ haveÂ significant vested interesta to get on the offense here on several fronts. They include; the slow death of the four party model, the VC $$ being thrown into alternative payment models like mobile, regional interchange pressures from regulatory in Europe and elsewhere, PayPal and of course thee telco’s.
In direct answer to your 1st question, alternative payment systems will not completely supplant incumbent payment systems in our life time and 2 – MC/VISA/AMEX all need to re-think interchange
- Alternative Payment Mechanisms for Online Payments Will Account for One Third of All Online Payments Made By Canadians by 2014 Says New Report (pindebit.blogspot.com)
- PayPal Expands Consumer Protections in Time for Holiday Shopping Season (eon.businesswire.com)
- VeriFone Partners with Bling Nation on Mobile Tap-and-Pay Initiative (pindebit.blogspot.com)