As online merchants demand consumer-friendly payment solutions to increase transactions and consumers demand security and choice, the number of alternative online payment providers expands. Since 2006, one category of alternative payment providers, nonbank wallets, saw an influx of new entrants: Amazon, Google, BidPay, and Moneta. As the new entrants and the incumbent, PayPal, gain traction, the banking industry grows wary. This Research Note provides a market update of US retail e-commerce, a review of five nonbank wallet providers, and an analysis of the providers' impact on the bank sponsors of traditional payment methods and the financial services industry.
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