Everything brands need to know about alternative payment methods

Alternative payment methods are any form of payment that isn’t cash or a physical credit or debit card. 

Think of them as an “untraditional” way to pay. 

However, in some markets, alternative payment methods are the norm and using cards or cash are more niche. So we prefer using “local payment methods” as every country has its own preferences. 

For the sake of this article, we’ll use “alternative payment methods” as it’s a more widely used term.

Whether it’s to diversify your payment options or save costs, here are the top four benefits of using alternative payment methods for your business: 

#1: Meet consumer demand 

Cash and physical cards are no longer the only way to pay online or in-person: 

• 27% of consumers don’t carry wallets and instead tap their phone for payments.

• Global QR code transactions are expected to reach $2.71 billion in 2025 (with 87% coming from the Far East and China).

• The global transaction value of BNPL is forecast to hit $565.8 billion in 2026. 

Expanding beyond traditional payment methods to include APMs can help you keep up with industry trends and consumer habits. 

#2: Manage payment costs  

According to our recent report, local payment methods have an average cost savings of 49% compared to credit and debit cards.

As your business scales and transaction volume increases, managing payment costs can help protect your bottom line. 

#3: Improve your mobile checkout experience

Mobile shopping is a top choice for consumers. 

Case in point: It’s estimated that global revenue from mobile ecommerce sales will reach $3.35 trillion in 2028. 

So making your mobile checkout experience as frictionless as possible is key. 

One way is to offer fast checkout options with APMs like digital wallets. Many of them are optimized for mobile and in-app payments, creating an easy (and secure) way to pay.

#4: Expand into new markets

If you’re looking to expand into new markets, it’s important to understand how locals like to shop. 

Integrating various APMs (or local payment methods) can not only create an easy checkout experience, but establish credibility with those new to your brand too.

As Dubarry’s Head of Ecommerce, Marc O’Donnell says: “Local payment methods are so important, especially where the brand is not so well known.” 

Even better? “They help to build trust and remove a potential barrier to purchase,” he adds. 

Now that we’ve covered what alternative payment methods are (and their benefits), here are the most common types: 

#1: Digital and mobile wallets 

A digital wallet is a digital payment system built for electronic transactions using cards, user accounts, or pre-loaded funds. 

Rather than pulling out your card to re-enter details for every transaction, a digital wallet stores all the necessary information needed to make a purchase. 

Popular digital wallets in North America and Europe include Apple Pay and Google Pay, whereas Alipay and WeChat Pay dominate in Asia.

#2: Buy Now, Pay Later 

BNPL is a form of financing that lets customers pay for something over time. 

A BNPL provider (like Billie or Klarna), pays the total amount to the business and then charges the customer at a later date — either in full or installments. 

While this concept has existed for over a decade, it’s taken the world by storm in recent years.

#3: Direct Debit 

With Direct Debit payments, customers instruct their bank to authorize an agreed amount of money from their account. 

While popular for recurring payments like monthly subscriptions or donations, Direct Debit can also be used for one-click purchases. 

#4: Online banking 

Known for its convenience (especially if you don’t have a card), online banking is a common alternative payment of choice for shoppers: 

• In Poland, online banking makes up 75% of its e-payment mix.  

• In Japan, shoppers use the online banking method Pay Easy — which lets them pay for purchases via an ATM.  

• In India, BillDesk has direct connections to over 60 Indian issuers.  

• In the Netherlands, iDEAL reached over $1.3 billion payment transactions in 2023. 

#5: Pay by Bank 

With Pay by Bank, shoppers pay directly from their bank account rather than charging a debit or credit card. They simply log in with their unique bank credentials, replacing manual card entry. 

The checkout experience is user-friendly and secure, and the appetite for this payment method is growing.

According to Juniper Research, global Pay by Bank payments will exceed $330 billion by 2027, a 479% increase from 2023. 

As local payment methods vary country to country, here’s a quick regional summary for you. 

Tip: For more details, browse our payment method navigator.

North America  

While traditional card schemes are common in North America, BNPL methods (like Afterpay and PayBright) are growing in awareness and usage. 

In the US specifically, digital wallets are especially on the rise — over 53% of shoppers prefer them to traditional payment methods. 

Latin America 

Latin America is a varied payment environment: 

• In Brazil, bank transfer method PIX is linked to over 700 financial institutions and has over 100 million users. 

• In Mexico, many consumers don’t have a bank account or credit card, so they use OXXO — a voucher-based payment method. 

Online banking and installment-payments are also common, and card adoption is growing in popularity too. 

Europe 

Europe is a combination of advanced mainstream card adoption, local schemes, online banking methods, and cash: 

• Visa and Mastercard dominate in Turkey, Switzerland, Italy, Croatia, and the UK.

• Local schemes prevail in areas like Belgium, where there are more Bancontact cards than there are Belgians.

• Online banking leads the way in the Netherlands, Austria, the Baltics, and Finland.

• Wallets are growing fast in Ukraine and Latvia, while cash is still heavily used in countries like Hungary, Malta, Slovenia, and Cyprus. 

Asia Pacific 

China is a global pacesetter for mobile payment methods, with 92% of the population using digital wallets like Alipay and WeChat Pay. 

The Philippines are also early adopters of mobile commerce, and Indonesian shoppers frequently use DOKU Wallet which lets them pay — even without a bank account. 

After India demonetised its ₹500 and ₹1,000 banknotes in 2016, cards currently dominate but online banking, direct debit, and wallets have seen an increase in usage. 

In Japan, cash remains strong, while Hong Kong, Singapore, and South Korea are go-to card markets. 

Middle East 

Local card schemes abound in this region, whether it’s KNET in Kuwait or BENEFIT in Bahrain.

In other areas like the United Arab Emirates, traditional card schemes are popular, while Egypt remains strongly cash-based.

Oceania 

While card dominates this part of the world, alternative payment methods are growing in popularity: 

• Banking service Poli lets New Zealanders make online debit payments.  

• Australians have been jumping on the BNPL train — Afterpay and Zip contributed to a 43% growth in 2020. 

Africa 

Cash remains dominant in this region, but mobile payment methods are rising fast. 

For example, M-Pesa is an SMS-based service that lets users send funds, pay bills, make in-store payments, and more. 

Launched in Kenya, it’s currently used in several countries across the continent. 

While there are many benefits to APMs, here are four factors you should take into account before integrating them: 

1. Customer behavior: Which payment methods are relevant to your target customer? If the majority of shoppers use digital wallets, start there. 

2. Security risks: Like integrating any new payment method, it’s important to make sure you have the right risk management tools in place to mitigate fraud. 

3. Technical issues: Is the APM compatible with your existing infrastructure? Using a financial platform that allows for easy integrations can help ensure seamless checkouts. 

4. Regulatory and legal issues: Alternative payment methods are subject to varying degrees of legal and regulatory requirements. So it’s important to ensure your legal team has a full understanding of the rules. 

Using a financial technology platform, like Adyen, can help you easily accept multiple payment methods — without having to integrate each one separately. 

We’ve built our single platform solution with the purpose of simplifying global commerce for leading businesses, and have our own integrations for popular payment methods. 

Simply flick a switch in the back end and turn on the methods you need. Voila.