PINK.

PINK.
 TABLE OF CONTENTS

Why Alternative Payments? 01

Who uses Alternative Payments? 02

Which Alternative Payments? 03

APM benefits - the consumers 04

APM benefits – an omnichannel experience 05

APM benefits - businesses 06

APMs main problems 07

APMs now - current trends 08

APMs now - Austin, TX 09

APMs heads up! 10

 01
WHY
A LT E R N AT I V E
PAY M E N T S ?

Mobile devices have been on the forefront and are changing the
payment industry throughout the world. As of now, banks are leading
with traditional forms of payment: cash, checks, and cards. However,
the traditional use of cash and card payment methods are slowly
changing and making way to alternative payment methods (APMs).

Alternative Payment Methods are the future because of their simplicity

to consumers and benefit to businesses. Consumers are attracted to
APMs since more control is given to them over how and when they
pay. As well, businesses are able to innovate sustainable and effective
methods of reaching out to their target audiences through the use of
big data.

There are hundreds of APMs adapting to both online and offline

shopping experiences. As APMs increase in popularity, it is important
to know a little bit of the future. 1

1. https://www.worldpay.com/global/products/alternative-payments
 02
WHO
U S E S A LT E R N AT I V E
PAY M E N T S ?

Generationally, young males and females are the ones leading the forefront
of Alternative Payment Methods through online or mobile apps. Racially, the
use of online is happening mainly with the Asian race, with 49% of Asians
paying friends and family through online or mobile apps.

of females 18-34
pay friends and of females 18-34
of Asians pay family through use mobile
friends and online or mobile banking app.
family through apps
online or
mobile apps.

58%
of males 18-34 49% 85%
pay friends and
family through
online or of males 18-
mobile apps 34 use mobile

66% 81% banking apps.

1. https://www.worldpay.com/global/products/alternative-payments
 03
WHICH
A LT E R N AT I V E
PAY M E N T S ?

57%

Payment Methods Used in Past Year

Base: 2,000 internet users aged 18+

14%
11%
9%
8% 8% 8% 7%
4%
3%

PayPal Pay with Bank Apple Pay Venmo Google Pay Cash App Walmart Samsung Apple Pay
Amazon payment Pay Pay Cash
app

Fieldwork: June 2018 Source: Lightspeed/Mintel

1. https://data-mintel-com.ezproxy.lib.utexas.edu/databook/860629/#Q18Net
 04
APM BENEFITS
THE CONSUMER

CONVENIENT

APMs streamline the checkout process. It is both easier and faster to click a
button or scan a phone than it is to write a check or count pennies. Not only
is it easier in the payment process, having a centralized online location is
easier to keep track of, as well. 1

DISCOUNTS
Promotions, discounts, cashback, and points can be received with each
transaction. They are a great incentive for consumers to actively engage in
APMs. In a recent survey, 48% of consumers answered that earning rewards
would enable them to make the switch to alternative payment methods. 2

48%
• Consumers
47%
• Consumers would
would switch for switch for earning
earning rewards discounts

1. https://payments.cardinalcommerce.com/why-alternative-payments-now
2. http://academic.mintel.com.ezproxy.lib.utexas.edu/display/918148/
 05
APM BENEFITS
AN OMNICHANNEL EXPERIENCE

8:15 AM

Go to a shop and buy coffee with cellphone enabled Apple Pay

01
9:40 AM

Send money to friends through Zelle app for breakfast meal

12:05 PM

Pay for lunch at Chipotle through their mobile app

3:25 PM

Receive promotion by e-mail. Buy item and receive

it the next day!

5:30 PM

Return home through Uber ride

 06

APM BENEFITS
BUSINESS

DIGITAL RISE

Businesses can now capitalize on the digital environments while

connecting with them. 95% of Americans now own a cellphone of some
kind. The share of Americans that own smartphones is now 77%, up
from just 35% seven years ago.1

BIG DATA

Users of APMs agree to give away certain demographics in order to

access convenience. This information trade off allows merchants to
optimize their competitive edge. Having access to big data simplifies
processing and allows businesses to create more precise targeting
strategies. 2

95%
• Consumers own
a cellphone

1. http://www.pewinternet.org/fact-sheet/mobile/
2. https://corporate.payu.com/blog/consumers-to-embrace-alternative-payment-methods
 07

APMs
MAIN PROBLEMS

IF IT ISN’T Some people don’t want to change their current

01 BROKEN
DON’T FIX IT
payment method. The current age group most
resistant to change are those above 55 years old.1

A record 16.7 million people in the United States fell

02 SECURITY victim to online fraud this past year – all of them using
cards for purchases. 2

While using an alternative payment system is simple,

03 CONFUSING
finding the right ones are difficult due to how many
there are. With over 300 types of APMs and over 2,000
types of cryptocurrencies, consumers can feel lost within
the emerging field of Alternative Payment Methods. 3

“Sometimes I am just too lazy to explain to people how Samsung

Pay functions, yet that waitress's reaction makes me wonder if I
should really just use my card and not bother using Samsung Pay
at all.” 4
Samsung User

1. http://academic.mintel.com.ezproxy.lib.utexas.edu/display/918160/
2. https://www.iii.org/fact-statistic/facts-statistics-identity-theft-and-cybercrime
3. https://coinmarketcap.com/all/views/all/
4. https://www.reddit.com/r/GalaxyS8/comments/9tx3m2/samsung_pay_makes_me_look_like_a_rude_uneducated/
 08

APMs NOW
CURRENT TRENDS

APMs are used as

educational tools to teach
appropriate spending habits
to children. 1

Alibaba, the world’s 5th

largest internet company,
has invested in technology
that allows you to pay
by smiling. 2

It’s not just developed

countries reaping the benefits
of APMs. 56% of people in
Kenya are making or receiving
payments via mobile APMs. 3

1. http://academic.mintel.com.ezproxy.lib.utexas.edu/display/836893/?highlight#hit1
2. https://techcrunch.com/2017/09/03/alibaba-debuts-smile-to-pay/
3. http://www.pewresearch.org/fact-tank/2014/02/18/which-developing-nation-leads-on-mobile-payments-kenya/
 09

APMs NOW
AUSTIN, TX

The University of Texas at Austin

recently given $2million to
continue research on
alternative payments.1

Local businesses are

incentivizing users to pay with
digital wallets. “$1 cold brews
to the first 300 who use Apple
Pay at checkout” 2

Starting 2019, SXSW interactive

will begin a series on the
exchange of digital currencies. 3

1. https://www.bizjournals.com/austin/news/2018/06/11/ut-snags-2-million-for-blockchain-research.html
2. https://www.facebook.com/LuckyLabATX/photos/a.274568182695973/1189058837913565/?type=3&theater
3. https://www.sxsw.com/conference/blockchain-cryptocurrency/
 10

APMs
HEADS UP!

As of now, 6.5% (9.2 million people) of the US population is unbanked, only

able to use cash as a method of payment.1 According to the Pew Research
Center, 34% of African Americans, 17% of Hispanics, and 29% of people
earning less than $30,000 a year rely on cash for all of their transactions. 2

As APMs become more popular to businesses as they reduce risk of robbery

and increase accuracy through Big Data, operating on 100% cashless
systems can exclude target markets. But, more importantly, they exclude
people.

The state of New Jersey has completely banned 100% cashless systems
within the state, while jury is still out in cities such as Philadelphia, New York
City, and Washington, DC.3

It’s important to remember while Alternative Payment Methods produce

many benefits, a total reliance on such so early on is not wise since that isn’t
where consumers are.

We’ve got a ways to go. But let’s stay on the curve.

1. https://www.fdic.gov/householdsurvey/2017/2017execsumm.pdf
2. http://www.pewresearch.org/fact-tank/2018/12/12/more-americans-are-making-no-weekly-purchases-with-cash
3. https://www.metro.us/news/local-news/philadelphia/city-council-bill-to-ban-cashless-businesses-moves-toward-vote