Alternative debit products such as a PayPal Inc. and Moneta Inc. are growing and finding a home in the e-commerce market as "payments as a service," but brick-and-mortar stores are still waiting for a true leader to emerge, according to a report from the Mercator Advisory Group. Alternative debit payments made via a proprietary or electronic funds transfer network and settled through the automated clearinghouse system are front-runners in the emerging ACH debit-product market, according to the report. PayPal and Moneta use proprietary software to reformat transactions to connect to the ACH system for settlement, according to Patricia Hewitt, the report's author and principal analyst at Mercator. ID90 Technologies LLC, which provides 50,000 airline employees a means to buy discounted airfares on other airlines, uses Moneta's ACH-payment option (CardLine, 12/16/08). An increase in the use of smart-phone technology at the point of sale may help Moneta and PayPal become a payment option outside e-commerce transactions, the report says. But merchants may need to boost incentives or rewards to convince customers to use Moneta or PayPal if they become an option at the point of sale, the report says. "The challenge for these type of products is to translate themselves into brick-and-mortar retail payment methodologies," Hewitt says. Self-service checkout lanes also offer a possibility for alternative debit products if mobile-payment adoption stalls, Hewitt says. "If it can be self-service where, instead of swiping a card I have a touchscreen and [PayPal or Moneta] are an option, that's another way into brick-and-mortar," she says.