TLDR
An alternative payment method is any payment method that does not rely on traditional card payments. Learn what APMs are and why businesses offer them.
What is an alternative payment method?
An alternative payment method (APM) is any payment method that allows customers to make payments without using traditional credit or debit card networks. APMs include a range of payment options, such as digital wallets, bank transfers, open banking payments, account-to-account (A2A) payments, buy now, pay later (BNPL) services, mobile payment solutions, and local payment methods.
The exact definition can vary by market, but in most payment ecosystems, an APM is considered any payment method that operates outside the traditional card payment model.
Common types of alternative payment methods
Alternative payment methods can take many forms depending on the country, payment infrastructure, and customer preferences.
Common examples include:
- Digital wallets (Apple Pay, Google Pay, PayPal).
- Open banking payments.
- A2A payments.
- BNPL services.
- Local bank transfer schemes.
- Real-time payment systems.
- Mobile payment solutions.
- Region-specific payment methods such as BLIK, PIX, iDEAL, or Bancontact.
The popularity of specific APMs often depends on local payment habits and market adoption.
Why businesses offer alternative payment methods
Customer payment preferences vary significantly between countries, industries, and customer segments. Offering relevant APMs can help businesses:
- Reach customers who prefer non-card payments.
- Support local payment habits.
- Improve checkout accessibility.
- Expand into new markets.
- Reduce payment abandonment caused by limited payment options.
For many international businesses, APM coverage is an important part of payment strategy and customer experience optimisation.
Managing alternative payment methods across providers
As businesses expand into new markets, the number of payment methods they support often increases. A single payment stack may include cards, wallets, bank transfers, open banking payments, BNPL providers, and local payment methods.
Payment orchestration helps businesses manage multiple payment providers and methods through a single layer, allowing teams to connect, manage, and monitor diverse payment options without having to operate each provider independently.