What Are Examples of Alternative Payment Methods?

An alternative payment method (APM) is any payment method other than a traditional credit or debit card transaction. Whether it’s digital or mobile wallets, bank transfers, Buy Now Pay Later (BNPL), or other region-specific payment methods.

If you already accept credit and debit card payments online, it may be time to consider offering alternative payment methods.

Why You Should Accept Alternative Payment Methods

By giving your customers more payment options, you boost your conversion rate and reduce abandoned shopping carts. The more payment methods you offer, the more customers you’ll have access to, and the more customers will be happy to purchase from you.

In 2023, the average cart abandonment rate was 70.22 percent according to data collated by Baymard Institute. Many of these customers were “just browsing.” However, others abandoned their carts due to extra checkout costs or a lack of payment methods.

Offering more payment options is one of the best competitive edges you can give yourself, so don’t overlook its importance. If you want to keep your customers happy, you need to offer more than just a quality product. You need a checkout process that’s fast, user-friendly, and convenient for consumers.

Top Alternative Payment Methods

There are many alternative payment options that vary in speed, risk, and the region in which they are used.

APM	Best For	Processing Time	Risk Level	Popular Regions
Digital Wallets	Fast online checkout, mobile shoppers	Instant	Low	Global
Mobile payment apps	Contactless in-store & app payments	Instant	Low	Global
Bank Transfers (Open Banking, PIX)	Large payments, subscriptions	Instant – 1 day	Low–Medium	EU, Brazil
Buy Now Pay Later (BNPL)	Higher-ticket items	Instant approval	Medium (provider absorbs risk)	US, EU, AU
Cryptocurrencies	Tech-savvy/global customers	Minutes	Volatile	Global
Local Payment Methods	Cross-border e-commerce	Instant – 1 day	Low	Country-specific
E-cheques	Recurring payments	1–3 days	Low	US, Canada

Pay by Link

Pay by link is an alternative payment method in which the merchant generates a payment link and sends it to the customer via e-mail, SMS, or instant message. The customer opens the link and is directed to a hosted payment page. They choose their preferred payment method and complete the transaction without needing to log in or create an account.

This payment method has been gaining popularity in conversational sales contexts and is frequently used in Europe for professional services, healthcare services, travel, invoicing, and business-to-business (B2B) transactions.

Mobile Payments

Mobile payments are device-based payment apps that allow customers to pay efficiently and securely from their phones. To complete a transaction, the customer holds their near-field communication (NFC)-enabled device to an NFC-enabled payment terminal and then uses biometric authentication, such as their fingerprint, to approve the transaction on their phone.

Mobile payment apps are linked to a bank account and a bank card. However, rather than transmitting the card or bank account details over the payment networks, the app pays using a unique token each time, so the merchant doesn’t see or store the customer’s payment information. Popular apps include Apple Pay, Samsung Pay, and Google Pay.

Bank Transfers

A bank transfer occurs when funds are transmitted directly from one bank account to another. Transfers must typically be approved by the sender via online banking. In many cases, bank transfers are used for recurring payments. The customer provides their bank account number and approves the recurring transaction; each payment is deducted directly from the account (known as “direct debit”).

Many traditional payment processors avoid this service because it introduces an added vulnerability by requiring full bank account numbers. However, bank transfers are becoming more common in online sales, and many modern banks now use secure APIs, allowing for transactions without sharing full bank details. Examples include Open Banking in Europe and Pix in Brazil.

Wire transfers are a type of bank transfer, but they shouldn’t be confused with transfers facilitated through online banking. A wire transfer is a specific type of transaction that’s sent via a wire network. Because these types of transactions can be anonymous and difficult to trace, it’s recommended that you only approve wire transactions from people you know personally.

Cryptocurrencies

A cryptocurrency is a digital currency that’s encrypted using cryptography. Proponents love this payment method because it’s almost impossible to counterfeit or duplicate.

Cryptocurrency payments are becoming increasingly popular around the world, and many merchants aren’t sure how to handle them. Savvy merchants who accept these currencies gain a competitive edge among consumers who prefer virtual payment options.

Though Bitcoin is perhaps the best-known cryptocurrency, there were over 10,000 such currencies tracked worldwide in 2025. Other popular options include Ethereum, Ripple XRP, and Litecoin. If you want to accept these types of currencies, you’ll need to work with a payment processor that supports them.

Buy Now, Pay Later

The “buy now, pay later” (BNPL) model is also becoming more popular. The customer purchases an item on your website but doesn’t pay for it right away. Instead, they pay for it in monthly or biweekly instalments, usually divided among four or more payments.

Companies like Sezzle and Klarna have become leaders in this payment model. They partner with e-commerce businesses and act as a mediator between customers and merchants. As a business, you would typically be paid upfront by the BNPL provider, and they would then recoup the cost from the customer.

Electronic Cheques

An e-cheque, as the name suggests, is like a paper cheque in digital form. It’s sometimes called an internet cheque or online cheque. These transactions are similar to bank transfers, but they’re generally simpler and more secure.

Instead of using a payment gateway, like credit card transactions, payments are sent via a secure electronic funds transfer system, like an automated clearing house. As a result, e-cheques tend to have lower processing fees. Each transaction is facilitated by the merchant’s payment processor.

Other Alternative Payment Methods

We’ve covered some of the most popular alternative payment methods. However, there are other alternative payment methods that are fairly new, less used, or primarily used in specific regions.

• E-cash: Offering traditional payment methods is very important in regions like South America, where many people don’t have bank accounts. E-cash, or electronic cash, allows customers to print or save a photo of a barcode and use it to pay in cash at a participating store. Once payment is confirmed, the merchant ships the order to the customer. E-cash is an especially popular payment method in Mexico and Brazil.
• QR code: QR-code payments are becoming more popular with smartphone users who prefer not to carry cash. The merchant either displays a QR code that links to their business bank account or generates a unique QR code for each sale. The customer then scans the code and completes the transaction using their preferred electronic payment method.
• SMS: Text messages can be used to provide a payment link or to request authorisation for a recurring payment if the merchant has the customer’s card details on file. This is especially useful for subscription services and businesses like health clinics with long-term customers.
• Loyalty points and gift cards: These methods allow customers to pay using a stored balance. This might be a stored balance of loyalty points accrued or credit stored on a gift card. The difference between these and other payment types is that the balance can only be spent at the shop that issued the loyalty points or gift card.
• Cash on delivery: This alternative payment method remains popular in countries where many people are unbanked or prefer cash. Cash on delivery can work well for local businesses, such as restaurants. However, for items that need to be shipped outside of your immediate neighbourhood, e-cash is a safer option.

Most Popular APMs by Country

Alternative payment methods, including local payment methods, are vital for globalised e-commerce due to their popularity in specific countries. Accepting the dominant payment method in a given country will help you reach customers there. Here are a few payment methods that vary depending on the country:

• Netherlands: iDEAL accounts for more than 70% of online transactions in the Netherlands.
• France: Carte Bancaire is the national card network in France and processes most domestic card transactions.
• Germany: Girocard and SOFORT are very popular alternative payment methods used for international transactions.
• Belgium: Bancontact is Belgium’s most popular debit payment method and dominates domestic card payments.
• Poland: BLIK is an instant mobile-based bank payment solution that is very popular in Poland.
• Brazil: PIX is a real-time payment system that is operated by the Central Bank of Brazil and has become the number one online payment method in the country.

Benefits of Offering Alternative Payment Methods as a Business

Offering alternative payment methods in your business will not only improve customer retention but also increase security and overall revenue. As a business, you will benefit from:

• Faster checkout
• Reduced fraud
• Higher conversion rates
• Access to a wider globalised market
• Increased customer satisfaction and loyalty
• Lower processing fees

Deciding Which Alternative Payment Methods to Offer

Deciding which payment methods to offer depends on your customer base and business model.

• Your customers: Find out which payment methods are most popular among your customer demographic and in the area where your customers live. Carte Bancaire, for example, is a preferred payment method in France, but would be next to useless if your customers are based in Japan. Likewise, offering traditional payment methods like cash on delivery or e-cash payments is extremely important for businesses that serve elderly and rural customers. However, they may not be as necessary if you mainly serve Gen Z.
• Your business type: Different business models and industries lend themselves to different kinds of payment methods. Direct debit is a must-have alternative payment method if you operate on a subscription basis. In contrast, online grocery shops need to offer payment methods that are quick and convenient for one-time transactions. Mobile payments, local cards, and cash on delivery could be more suitable in this case.

Alternative Payment Methods FAQ

Are alternative payment methods secure?

Generally. Many alternative payment methods use encryption, tokenisation, or some type of high-level authentication.

Do alternative payment methods reduce cart abandonment?

Yes. Offering different payment options, such as mobile payments or local payment methods, facilitates and streamlines the checkout process for many customers, reducing cart abandonment.

Do APMs cost more than a credit card to process?

Not necessarily. Some mobile payment apps charge minimal transaction fees, and some bank transfers and e-cheques have lower fees than card payments.

Expand Your Customer Base With APMs

Accepting alternative payment methods was once considered “going the extra mile.” Today, you’re automatically at a disadvantage if you don’t. Customers around the world have a wide range of payment preferences. If you don’t accept their preferred method, they will take their money elsewhere.

The easiest way to expand your payment options (and your customer base) is to partner with a payment processor that handles a range of alternative payment methods. Then, all you need to do is identify the methods that best suit your customers and business type and add them to your checkout for increased sales… and more revenue.

Published: November 29, 2023
Last updated: April 8, 2026