This IDC Financial Insights report looks at emerging payment networks offering alternatives to the legacy payment networks that banks access to make retail payments possible. Retail payments in the United States has long been dominated by a small set of networks and providers controlling the transfer of funds through banks. Recent events in payments, however, have presaged the rise of alternative payment providers offering competitive networks that financial institutions can use to offer P2P transactions, bill payments, and payments at the point of sale. This represents a fundamental shift in the way payments are offered to consumers, a shift that will lead to new products and services built on top of those rails.
"For decades, the payment market has meant an option between a small number of credit and debit networks connecting banks to make payments possible," said James Wester, research director of Worldwide Payment Strategies. "That will begin to change as new competitors leverage transformation technologies to offer compelling payment networks to banks and as banks recognize those alternatives give them flexibility in how they manage their payment businesses."