Mercator Blog

Debit and Alternative Products Advisory Service Update - June 2018
Date: June 14, 2018
Sarah Grotta
Director, Debit and Alternative Products Advisory Service

Like many of you, I have spent the last quarter attending a variety of payments-related conferences. My focus at many of these shows has been on faster payments, specifically its practical applications, as well as how the industry is preparing to manage fraud. At this point in its evolution in the United States, faster payments is more a conversation point than an actual application, but that will begin to change toward year end, I believe. We should also begin to see the market pricing for faster payments emerge, which will be critical in drive adoption. I will be providing updates throughout the year to the faster payments research we have published so far this year.

Following is a rundown of recent reports and what will be released soon: 

The report agenda:

Asian Payment Applications

Diverging a bit from debit and faster payment topics, I joined with my colleague Raymond Pucci to take a look at the Asian payment applications Alipay and WeChat Pay based in China and Paytm in India. These are fascinating applications that have captured billions of users. This is a far cry from the U.S. experience with mobile payment apps. The report, Asian Mobile Payment Apps as a Way of Life: A Look at Alipay, Paytm, and WeChat Pay, explains they have been so successful and some of the interesting aspects of these apps that providers in the U.S. are considering emulating to help boost consumer use of and loyalty to their own apps. Ray and I also recorded a webinar on this topic. If you are a Mercator member, you can listen to a recording of the webinar by clicking here.



Payment Account Reference (PAR)

I recently published a short Viewpoint titled Payment Account Reference: Finding the Cardholder Account in a Sea of Tokens. PAR is an EMVCo standard that groups the multiple tokens assigned to a single payment card together under one “parent” token. There are several applications for PAR, but the fact that it requires effort, investment, and cooperation on the part of both issuers and acquirers limit its use to niche markets.


Debit in Digital Channels

I am currently examining how payment cards, specifically debit cards, are used online, in app, and with mobile phones within retail store locations. Here’s a sneak peek of one topic that will be covered: Consumer survey data collected by Mercator suggest that U.S. consumers are getting the message that debit is safe to use in digital venues but still generally prefer to use credit cards. In the report later this month, I will discuss this point and several others, including tactics that issuers might consider for encouraging more payments on debit cards.

Around the Industry

In this section I like to highlight interesting articles or reports that have been published in the industry recently that may be of interest. 

The Federal Reserve is looking for feedback on its proposed governance framework. More on how that is shaping up and how you can get involved can be found on the FedPayments Improvement website:

Consider listening to the new payments-related podcasts posted on PaymentsJournal and available to all. They can be accessed through this link:

As always, if you have any comments regarding these debit trends or wish to discuss anything in the realm of pay now alternative products, I would enjoy hearing from you. Please feel to email or call:

Sarah Grotta
Director, Debit and Alternative Products Advisory Service
1-781- 419-1704