Alternate Payment Methods Available in the US
PayPal is a mobile and online payment, currently operating a global online payment system which supports money transfers. Businesses and individuals are able to receive and send payments to locations through bank accounts, credit cards, and other financing methods. PayPal charges 2.9% transaction fee for the merchants and zero fees for purchases. It has added 29 million active customer accounts in the year 2017, an increase of 15% from last year. The transaction value increased by 27% to $451bn in the same year. As of 2017, PayPal has 227 million active customer accounts worldwide.
Launched in Oct 2014, Apple Pay is a mobile payment solution offered on select Apple devices which enables users to make contactless payments and online payments on applications integrated with the Apple Pay API. Apple Pay allows users to make in-store, online, and in-app payments. The service works with all the major debit and credit provider of the US, including Visa, Mastercard, and American Express cards from various financial institutions. The service had 86 million active users in 2017, up from 45 million in 2016.
Samsung Pay is a mobile payment solution which allows users to securely store payment information, which is accessed at the time of transaction or payment. The app uses NFC technology or magnetic strip technology (MST) to make contactless payments. In the US, the service was launched incompatible with service providers including Visa, Mastercard, American Express, JP Morgan Chase, Bank of America, Citibank, US Bank, and PNC. The number of active user accounts of Samsung Pay increased from 18 million in 2016, to 34 million in 2017.
Google Pay is a mobile wallet which stores credit cards, loyalty cards, debit cards, and other payment information, similar to the prior google wallet/Android Pay. The wallet makes it possible for contactless payments at terminals by the use of NFC technology and does not require the user to open an application to process the payment. It works with cards issued by American Express, Discover, Mastercard, and Visa. The number of active user accounts of Android Pay has increased from 2 million in 2015 to 24 million in 2017.
Chase Pay is a digital wallet launched by JP Morgan Chase, which allows users to make payments through the digital wallet instead of conventional physical modes. The wallet generates a QR code at the POS terminal to make a payment and also allows users to pay via clicking a photo of the respective bill. It accepts only Chase debit and credit cards. Further, Chase Pay charges vary from conventional mobile wallet payment charges, due to ChaseNet. ChaseNet is the product of a deal signed between JP Morgan Chase and Visa, wherein Chase has licensed its own version of Visa’s transaction processing network, which allows Chase to determine the rates for transaction processing. However, cards from other issuers such as MasterCard would need to be processed through their respective networks.
Walmart pay is the retailer version of Google Pay & Apple Pay. The user has to scan the QR code displayed on the card reader to pay. Further, customers have the option to split the payment between the app and another payment method.
Starbucks Mobile Wallet:
The platform allows users to order in-app at a Starbucks store and make the payment through barcode scanning. The app also allows linking to other payment wallets like ChasePay & PayPal. As of 2017, Starbucks mobile order and pay transactions accounted for 10% of the overall transaction in the US Company-operated stores, with Starbucks rewards growing 11% year on year, to 13.3 million active members in the US.
Wells Fargo Wallet:
Launched in 2016, the Wells Fargo wallet allows users to store payment information pertaining to Wells Fargo debit and credit cards. It also allows users to withdraw from Wells Fargo NFC enabled kiosks and the app also allows connectivity to third-party mobile wallets. Currently, it is not available on the iOS platform.
Launched in 2017, Citi Pay is a standalone digital mobile wallet by Citibank. It is a payment platform which allows the bank’s customers to store payment information pertaining to Citibank issued cards and conduct online transactions. The app is facilitated by the partnership of Citibank and Mastercard, allowing the platform to access the Masterpass network service which enhances the ability of customers to make in-app purchases and online payments. The wallet uses NFC technology for contactless payments and is currently not available on iOS devices.
Visa Checkout allows users to store payment information relating to payment cards that can be accessed instantly at the time of payment. Users need to create an account, registering payment details and choose the visa checkout option at payment portals. As of 2017, Visa Checkout has a total customer base of 25 million. The total transaction value was $3.8bn in 2017, with 350,000 merchants accepting the service. In 2017, Visa added a new feature to the service wherein users can use alternate digital wallets providers to check out online where Visa Checkout is accepted. The company has also added biometric sign-in and a stay-signed-in feature to decrease the checkout time.
Masterpass provides storage of payment information of virtual as well as physical cards. It records the delivery address relating to the transaction increasing the convenience of users purchasing physical goods. Further, users need to create an account and choose a preferred wallet. Users can also link Masterpass to their e-mail and mobile numbers. The service has registered more than 85 million active accounts with increasing merchant acceptance, crossing 10,000 small and medium-sized merchants.
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