3 PAYMENT METHOD SCORECARD:
DIGITAL WALLET (STAGED/STORED-VALUE)
Cost
acquirer for merchants utilizing their services. Merchants can also directly integrate into some service providers (e.g. AliPay) via APIs to skip the middleman of a gateway. When accepting via a third-party processor, a merchant needs to consider the cost premiums in comparison to direct integration; however, there may be bespoke partner and merchant development costs with a direct integration. Whether the merchant uses a plug-in or an API, in-store payments may require some hardware if the merchant desires to scan the consumer’s Alipay QR code to receive payment, but merchants can provide the QR code for consumers to initiate payment via their device. 826 Consumer/Bank Costs Rewards While many staged/stored-value digital wallets do not offer rewards, there are a few examples of operators offering discounts or offers to consumers. 827 Interest Payment on Debt Given the nature of staged/stored-value digital wallets, debt is not accrued. Surcharging Consumers are not typically surcharged on this payment method.
Metrics
Weight Score
Average Fee Level
15% 5.0 10% 3.0
Competitive Leverage
Competition within Payment Method
15% 2.5
Fixed Cost Rewards
10% 4.0 15% 1.5 15% 5.0 20% 5.0
Interest Payment on Debt
Surcharging TOTAL SCORE
3.8
Merchant Costs Average Fee Level
According to CMSPI’s Cost of Payments Analysis, staged/stored-value digital wallet’s average cost is 0.89%. Competitive Leverage Merchants’ pressure to accept staged/stored- value digital wallets is dependent on the region. For example, this payment method is more popular in Asia-Pacific than North America. Competition within Payment Method Competition within staged/stored-value digital wallets is dependent on the digital wallet. In India, merchants can access various digital wallets easily given their real-time payments network, UPI. However, many of these staged/stored-value digital wallets are take it or leave it for merchants; meaning, the competition is amongst payment methods versus the merchant having the ability to choose amongst various networks like in most debit
card markets. Fixed Costs
A merchant’s fixed costs to accept staged/stored- value digital wallets are also dependent on the size of the merchant and their ability/desire to create unique integrations with a provider. Many staged/stored-value digital wallets like PayPal or Alipay are available through a gateway or
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