As open-platform payment providers move into new markets, they should monitor their susceptibility to risks including potential market changes, a report from Aite Group LLC advised.
One risk is associated with payments via the automated clearing house network, Julie Conroy McNelley, an analyst for Aite, wrote in the December report.
ACH transactions provide a low-cost alternative to card payments, but if banks raise ACH fees to compete with card fees, it could jeopardize a number of these payment models, she said. Providers also should improve online security, McNelley said, moving beyond simple user names and passwords.
Aite estimated that by 2015, alternative payment providers globally will process $35 billion in gross dollar volume per year.
If providers can control the fraud-risk issues, open-platform payments may provide merchants with opportunities to "consolidate their payments business with one payments provider," McNelley wrote.