The Opportunity for Banks in Alternative Payments
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Overview: This white paper, co-authored by SunTrust Bank and Moneta executives, provides a banker's perspective and market analysis of the alternative payments marketplace, projected to reach 30% of all online payments by 2012. Consumers are increasingly choosing free payment solutions which offer convenience, security and online privacy. PayPal and BillMeLater have become the dominant providers, limiting bank opportunities for interchange, deposit retention and online consumer services. This paper outlines what banks can do to capture alternative payments revenue dominated by PayPal and Bill Me Later. Banks have continued to focus on their traditional payment card solutions and watched from the sidelines as 20 points of payment market share have moved to the upstarts. Banks have the technology, customer base and brand power to remain the dominant players in the payment industry if they more aggressively adopt some of the innovations pioneered by earlier alternative payment providers. This white paper makes the case that banks stand to gain greatly from offering an alternative payment solution to their customers, while highlighting some of the obstacles that must be overcome to achieve success.