This brief article in The Asset generally describes the ongoing shift to new electronic payments methods, which the author, a bank exec at a global institution, is calling Alternative Payment Methods (APMs). Members of our Debit and Alternative Products service will already have a pretty good idea of what’s been happening, but in this case, the emphasis is on how these APMs might be reshaping treasury operations as it pertains to payments. We have also covered this topic recently in member research on cash cycle management.
‘A number of trends are playing out and accelerating the deployment of APMs. Post the pandemic, there has been an explosion of online sales using mobile devices or computers. “Whether they are products or services, people are reaching out to their mobile phones or laptops to procure products or services,” Narayan continues. “This has created a huge shift in the way the services are being rendered whether you are a B2C or a B2B organization.”…
It has become absolutely critical, he says, for organizations to keep this shift in mind. And in this era of instant gratification, consumers also expect services to be rendered instantaneously. They similarly expect the experience – and the convenience – to be the same when it comes to payments.’
The article drifts between what consumers are seeking in terms of payment experiences and how that seems to be influencing the way corporates think of these types of new payment instruments. We suppose this points to the whole concept of ‘consumerization’ of corporate experiences, accelerated during this ongoing pandemic with WFH and the growing mobile payment preferences, as well as bleeding into other work processes. So, we think the real tie-in is simply digitization, which encompasses the whole of financial operations and creates more visible and faster transactions. The author also reminds us of the growing tendency for central banks to study and pilot new digital currency experiments, especially taking off in the Asia region.
‘For Narayan, this is a win-win for consumers, intermediaries, and merchants. “Things are evolving very fast,” he observes. “Central banks are playing an active role if you look at what’s happening across Asia in terms of deploying the fast payment rails, and quickly following through with the overlay services such as the QR code, request-to-pay, etc.”… Countries such as Singapore, Hong Kong, and India, are ahead of the curve but many others are catching up.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group