Banks Need Alternative Payments

In an article published yesterday in American Banker by Bruce Cundiff, he argues that the global economic slowdown could provide an opportunity for alternative payment companies and banks to strategically partner. Here's an excerpt:

Alternative Payments

The global economic slowdown, which is driving down consumer spending and credit card purchases, could prompt banks to adopt alternative payment systems.

Retailers have become increasingly interested in recent years in offering customers alternatives to credit and debit cards. These systems often exclude the traditional payment providers, and the main benefits of these transactions — revenue, customer relationship enhancement, or brand equity — flow to companies other than banks and card networks.

But many financial companies are wondering whether the economic downturn will fuel faster adoption of alternative payment methods and, perhaps more importantly, how that could impact their own payment revenue.

I argue that it is not a matter of whether alternative payments will gain steam as a result of economic difficulties. Rather, in the face of economic difficulties, financial institutions must embrace the alternative.

We must understand the value proposition, and the motivations, of various players in the retail payment ecosystem.

I'd provide a link to finish reading the article, but American Banker is a subscriber-based publication. To subscribe go to AmericanBanker.com

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