Jul 25, 2013 Sean Albert
Electronic payment options have been increasing in recent years. With the continued use of the Internet as a marketplace, accounts receivable companies are constantly developing new electronic platforms for consumers. In the past, mediums of payment were confined to credit or debit cards from traditional banks. However, many companies have entered the electronic transaction market, which has created more competition, according to Business 2 Community.
The source stated that close to 90 percent of all online transactions between businesses and consumers are conducted through Electronic Data Interchange (EDI). Although most of those were made via cards, the source did note that third-party payment firms such as PayPal are seeing a boom in business. In the first quarter of 2013, the company experienced a 21 percent growth in payment volume.
Despite PayPal's long-held dominance of the EDI sector, the source indicated that the company's market share is on the decline. With more than 50 viable challengers to PayPal services, the source reported that firms such as Dwolla are making the electronic payment field more competitive, which should be good for consumers. By undercutting PayPal's transaction fees and creating innovative payment services, Dwolla has been able to carve out a nice market for itself.
One electronic payment technology that has been used more frequently in recent years has been ACH cards. According to The Electronic Payments Association (NACHA), ACH payments topped $36.9 trillion in 2012, a 8.76 percent increase from the previous year.
During 2012, consumer credit payments via ACH spiked by 7.6 percent. Also, the source reported that B2B transactions saw a 5.1 growth in volume.
With so many new payment options available, financial institutions may be looking to take advantage of the emerging technologies. If unique services are offered with consumer and corporate desires in mind, banks and other fiduciary enterprises could attract more business.