Alternative Payment Providers on the European Retail Payment Market

Abstract

The purpose of the paper is to identify prerequisites of the development of alternative PSPs and assess their position on the European payment market. Due to all changes which have emerged on payment market, the payment services have become expensive and complicated. So far, banks have been traditionally supplying such services and had the almost monopolistic position in this field. Unfortunately, banks’ IT systems are costly to maintain, overloaded and less able to adapt to new technological and environmental conditions. Alternative payment providers have proved to be more innovative and flexible than banks. Taking into account speed, cost and simplicity they have been offering products matched to customers’ needs and expectations. The prerequisites for their development on retail payment market include the development of new technology, innovations, e-commerce and m-commerce as far as new regulations. Among them are payment institutions and electronic money institutions. The EBC statistics show that their market position is still quite weak but diversified in different European countries.