Embracing alternative payment methods (APMs) is crucial in today's highly competitive digital commerce landscape. Our research finds that 69% of UK consumers abandon their carts when their preferred payment method is unavailable.
Survey shoppers in any other market, and you’ll likely find similar results. This highlights the critical need for merchants to understand their customers’ payment preferences and ensure a diverse range of options at checkout.
Read on to explore the different types of APMs, the global landscape, and why integrating them can make a powerful difference for your business.
In this article:
- What are alternative payment methods?
- Types of alternative payment methods
- How APMs are growing around the world
- Benefits of alternative payment methods
- What to consider when choosing an alternative payment method
- How Primer is making it easier to implement alternative payment methods
- How Conforama used Primer to roll out alternative payment methods
Integrate hundreds of payment methods—including APMs like Apple Pay and Google Pay— in just a few clicks with Primer. Book a call with our experts to find out more.
What are alternative payment methods?
An APM refers to any payment option that is not cash, or a debit or credit card from the major international schemes.
APMs can be global, like PayPal, Apple Pay, Google Pay, and Klarna, or highly localized.
For example, Pix in Brazil is widely adopted, with approximately 153 million Brazilians (around 75% of the population) and 15 million companies using it. The same is true with Bancontact in Belgium, which is a local card scheme. In 2022, Belgians made over 2.3 billion transactions using Bancontact.
The rise of APMs offers consumers greater choice and flexibility in managing their finances. For merchants, this has added a layer of complexity to the payment landscape.
Yet, forward-thinking merchants see the opportunity: offering APMs not only meets customer expectations but can also boost conversion rates and extend customer lifetime value.
Types of alternative payment methods
Account to Account (A2A) payments
The rise of digital banking is driving the growing popularity of A2A payments in digital commerce. A2A payments enable consumers to pay online directly from their bank accounts, offering a secure, straightforward experience. At checkout, customers choose the bank transfer option and are redirected to their bank for quick authentication and authorization.
Open banking has further fueled the growth of A2A payments, creating a streamlined and cost-effective solution for both merchants and consumers. The adoption rates and impact vary by region. For instance, over 65% of Singaporeans use PayNow for one-time and recurring payments.
Buy now, pay later
Buy now, pay later (BNPL) lets customers split purchases into manageable installments with minimal or no interest fees. This flexible payment option appeals to customers who want to make larger purchases without needing immediate funds. Leading BNPL providers like Klarna, Atome, and Clearpay have gained traction by offering consumers this convenient and accessible way to pay over time.
Cash-based electronic payments
Consumers favor cash-based payments as a payment method in certain areas, notably Latin America, where they constitute 20% of ecommerce expenditure. Cash-based payments typically commence with issuing a voucher containing a barcode given to the customer upon checkout. This voucher can be utilized at any participating physical store or bank, allowing the customer to pay using cash.
While cash-based payments allow merchants to reach a wider audience, they also come with challenges, including longer transaction confirmation times and extended settlement periods.
Cryptocurrency
Cryptocurrencies are digital assets that utilize blockchain technology to facilitate decentralized and secure transactions. For example, TripleA's crypto payment gateway allows merchants to securely and effortlessly embrace cryptocurrency payments. Although a relatively recent development, cryptocurrencies are gaining traction as a payment method, particularly in sectors such as gaming.
Digital wallets
Digital wallets have surged in popularity, especially among unbanked populations where cash once dominated. Acting as electronic repositories for funds, these wallets allow users to conveniently make payments via a unique identifier or electronic devices. Without the need for physical cards, consumers are drawn to digital wallets for their speed at checkout and secure transactions. This ease of use, robust security, and multiple top-up options have driven the rapid adoption of digital wallets as a preferred payment method.
Mobile wallets
Pass-through digital wallets like Apple Pay and Google Pay act as virtual versions of financial accounts or cards, allowing users to make seamless contactless payments through their devices.
These wallets streamline the checkout experience by enabling quick biometric authorization and storing additional details like the customer’s address, phone number, and email. This simplifies the payment process, speeds up transactions, and enhances user convenience.
How APMs are growing around the world
In the 21st century, payment methods have evolved dramatically, fueled by changing consumer preferences and rapid technological advancements. APMs have emerged to offer consumers unprecedented choice—from the convenience of digital wallets to the flexibility of buy now, pay later, and the transformative potential of open banking.
The growth of alternative payment methods shows no signs of slowing down. According to Worldpay research, by 2027, digital and mobile wallets are expected to account for 40% of European e-commerce payments. Cards are projected to hold a 30% share, while account-to-account (A2A) payments will make up 19% of transactions.
APMs are reshaping the digital economy on a global scale, but their development is far from uniform. Influenced by politics, culture, and technology, regional variations create a complex and fragmented landscape.
Let's take a quick tour around the world.
Alternative payment method development in Africa
Alternative payment methods (APMs) are a powerful driver of economic growth in sub-Saharan Africa, significantly shaping the region’s financial landscape. International remittances processed using mobile money wallets exceeded $21 billion in 2022. Digital wallets and improved interoperability between mobile wallets are gaining popularity, promoting financial inclusion across the continent.
One of Africa's most notable and transformative APMs is M-Pesa, which originated in Kenya and now has 66.2 million customers across Africa. M-Pesa operates through SMS-based technology, allowing users to conduct financial transactions effortlessly. Whether paying for goods, transferring money, or saving funds, M-Pesa has empowered millions with a convenient, accessible way to manage their finances.
Alternative payment method development in APAC
The Asia-Pacific (APAC) region exemplifies a highly complex and fragmented market regarding payment preferences, presenting challenges for merchants aiming to meet diverse consumer needs across countries. Mobile payment methods dominate in China, where 92% of the population uses QR-code-driven e-wallets like Alipay and WeChat Pay.
In Thailand, PromptPay has become a leading real-time proxy payment service, enabling users to transfer funds instantly and securely—a popular choice for individuals and businesses. Meanwhile, in Indonesia, the OVO Wallet is the preferred payment method. This digital wallet platform has gained substantial traction, offering services from bill payments and online purchases to peer-to-peer transfers.
Read more: A guide to alternative payment methods in Asia-Pacific
Alternative payment method development in Europe
The European payments landscape is a diverse and intricate mosaic of various payment methods. While mainstream cards still dominate in major economies like the UK, many European countries favor local payment schemes and online banking methods.
For example, Bancontact is at the forefront of electronic payments in Belgium. In the Netherlands, iDEAL is the leading online banking option. At the same time, Austria has embraced EPS as a popular bank transfer payment option.
Read more: A guide to alternative payment methods in Europe
Alternative payment method development in Latin America
Alternative payment methods account for 40% of Latin America's digital commerce payments. Notable APMs like Pix in Brazil, PSE in Colombia, and digital wallets are rapidly gaining traction in the region. As these methods evolve and gain acceptance, they are expected to play a crucial role in advancing financial inclusion and driving the growth of Latin America’s digital economy. For businesses aiming to tap into this dynamic and expanding market, embracing and supporting APMs will be essential.
Alternative payment method development in the Middle East
In recent years, the Middle East has emerged as a hub for payment innovation, transitioning from a traditionally cash-centric approach to embracing digital payment methods.
As ecommerce and mobile commerce gain traction in the region, various digital payment solutions, including mobile wallet options like Apple Pay, have become commonplace among consumers. The Middle East features numerous popular local payment methods and schemes alongside these global solutions. For example, Qatar’s QPay and Kuwait’s KNet have gained significant prominence, while buy now, pay later options are also witnessing substantial regional growth.
Alternative payment method development in North America
Credit and debit card payments remain dominant in this market, owing to their deep penetration and long-established presence. However, mobile wallets, such as Apple Pay, Google Pay, and PayPal, have been gaining popularity in North America, particularly as more commerce moves to mobile devices. Digital wallets account for approximately 37% of transactions in North America.
Among the emerging payment methods, Venmo is particularly favored by younger demographics, while ACH remains a prevalent option for bill payments. Additionally, Buy Now, Pay Later brands like Afterpay and Paybright are rapidly expanding their market presence. Businesses operating in Canada should also be mindful of the domestic card scheme, Interac, which is used widely by individuals nationwide.
Read more: A guide to alternative payment methods in the US
Benefits of implementing alternative payment methods within a checkout
Offering alternative payment methods provides merchants various benefits, from preventing cart abandonment to enhancing customer experience and expanding their customer base.
Let's explore these in more detail.
Meet local payment preferences and increase conversion rates
Providing highly localized payment methods is crucial for staying competitive. Many consumers expect to see their preferred local payment options available at checkout. Without these options, you risk losing valuable conversions.
Enable faster transactions to reduce cart abandonment
A slow payment process will lead 76% of UK shoppers to abandon their carts. Alternative payment methods, such as pass-through wallets like Apple Pay and Google Pay on mobile devices, streamline the checkout experience, allowing customers to complete transactions with just a few taps.
Additionally, concepts like BNPL lower barriers to entry, making goods and services more affordable and accessible. These alternative payment solutions not only foster heightened customer satisfaction but also contribute to increased loyalty.
Reduce the risk of fraud thanks to encryption and tokenization
Robust security features like encryption and tokenization within alternative payment methods act as barriers against fraud. By adopting these measures, businesses can eliminate expensive chargebacks and unauthorized transactions, creating a secure payment ecosystem that strengthens customer trust and protects sensitive data.
What to consider when choosing an alternative payment method
Now that we’ve explored the benefits of offering alternative payment methods and the diverse options available, the next question is: how do you decide which payment methods to provide?
Integrating a new payment method into your stack to reach more customers in existing or new markets requires carefully assessing several factors.
The popularity of an APM does not necessarily guarantee a perfect fit for your business in terms of features, user experience (UX), or technical compatibility. Making the right choice can help you manage risks, increase conversion rates, enhance customer retention, and reduce costs.
Does the APM have the features you need?
Certain APM features are more important for different business types. Subscription-based services, for example, require secure recurring payment support and tokenization to manage involuntary churn. While wallets, bank transfers, and BNPL providers typically cater to this need, some regions may lack the necessary support for these payment flows.
In contrast, ecommerce businesses prioritize immediate payment confirmation and automated refunds to streamline processes and enhance customer engagement and loyalty. In these cases, bank transfers or wallet methods are often preferred unless the region heavily relies on cash-based solutions.
It’s important to consider how payment lifecycle changes may impact your operations. Additionally, ecommerce businesses should offer relevant BNPL options to increase buyer incentives and provide flexibility and convenience.
How is the user experience?
While offering payment methods that your customers want to use in your respective markets is essential, you also need to consider the overall experience these methods provide within your commerce flow.
The payment touchpoint in your customer journey can either enhance the interaction with your product or create friction and uncertainty. Key factors such as the authentication method and the number of redirections play a crucial role in shaping this experience. Therefore, it’s wise to be mindful of user experience when selecting which payment methods to offer.
How much does it cost (and how secure is it?)
When evaluating different payment methods, comparing fees, charges, security features, and integration complexity is essential. Look for options that align with your budget while providing robust security measures to safeguard your business and protect your customers’ sensitive information.
How easy is it to integrate, and is there a lot of maintenance?
Integrating multiple alternative payment methods (APMs) can be complex, requiring careful consideration of how each processor and APM will be technically maintained and managed within your payment stack. This aspect is as crucial as the initial implementation.
A solution like Primer simplifies this process by offering seamless integration with various payment methods. This enables you to effortlessly activate new options, streamlining the management of your payment infrastructure.
How Primer is making it easier to implement alternative payment methods
Primer is a unified payments infrastructure, enabling businesses to accept, optimize, and manage payments through multiple providers with a single API integration. By eliminating technical complexities, we empower businesses to unlock and accelerate growth without the typical constraints tied to payment technology.
Here’s how we can help you easily integrate with the APMs you need to achieve your business goals:
Save engineering time by quickly adding new payment methods with Primer’s no-code integration
Integrating APMs traditionally requires extensive engineering resources, diverting focus from product innovation. Each new APM involves separate integrations, compatibility checks, and ongoing maintenance.
With Primer, you can streamline this process. After an initial integration, our unified payment API grants you access to various APMs without the need for additional integrations. This includes digital wallets like Apple Pay and Google Pay, Buy Now, Pay Later options such as Klarna and ClearPay, and local payment options.
You can easily toggle payment options on or off for your customers with just a few clicks in Universal Checkout, allowing you to stay agile and respond to changing market conditions. For example, take the Apple Pay outage in 2023. Primer customers could quickly deactivate it to keep their transactions running smoothly, switching it back on once service was restored.
Ferryhopper, an online travel agency making ferry travel easier and more accessible, partnered with Primer to simplify adding alternative payment methods during its global expansion. Using Primer’s single, no-code integration, Ferryhopper quickly introduced popular options like Apple Pay, Google Pay, and PayPal, scaling operations across 12 countries effortlessly.
Primer’s streamlined solution freed Ferryhopper to focus on enhancing its booking platform instead of managing complex payment integrations. Ferryhopper also utilized Primer’s Fallbacks feature to automatically reroute failed payments to a secondary processor, recovering 1% of bookings—revenue that would have otherwise been lost.
Read more about our work with Ferryhopper: Charting a new course for payments at Ferryhopper
Track and optimize payment methods with real-time insights across all processors
Gaining insight into each APM’s performance is essential for monitoring and adjusting your payment strategy. However, gathering and interpreting this data is often challenging due to the fragmented nature of payment data sources.
Each APM and payment processor tends to use unique data structures, meaning you’ll have to manually reconcile multiple data formats, track down inconsistencies, and manage separate reporting standards.
This complexity can make it almost impossible to achieve a comprehensive, unified view of your payment ecosystem, leading to time-consuming processes and the potential for inaccuracies.
This isn’t a problem when you use Primer. Our Observability solution consolidates data from every payment processor and APM in one place. This gives reliable, consistent insights across all payment processors, making it easier to track and analyze payments accurately from a single source.
Observability provides 100+ visualizations and 30+ filters, allowing you to dissect data based on payment method, region, customer segment, and more.
For example, if you need to analyze the performance of Apple Pay vs Google Pay across different regions, Primer’s dashboard lets you view these details in seconds, helping you make quick, data-driven adjustments to your strategy.
These are just a few ways Primer can help you unlock your payment potential.
We can also help you:
- Recover up to 20% of failed payments by configuring fallbacks to route transactions to a secondary processor.
- Increase authorization rates by up to 4% and reduce fraud by up to 30% with network tokenization.
- Reduce 3DS friction and improve success rates with Agnostic 3DS.
- Optimize costs and success rates with smart payment routing.
- Develop and refine your payment strategy with an expert team dedicated to your success.
Ready to see how Primer can help transform your payment strategy? Book a call with our payment experts.
How Conforama used Primer to roll out alternative payment methods
Conforama, one of Europe’s largest home furnishings retailers, knows that payments are one of the most crucial parts of the overall customer experience. With complex needs across in-store, online, and marketplace channels, Conforama needed a partner to help them build a flexible, customer-focused payments infrastructure.
After an extensive search, Conforama chose Primer as their unified payments partner. Primer’s platform has enabled Conforama to quickly roll out alternative payment methods and adapt to regional preferences without tapping into their engineering resources.
“Primer allows us to launch a new payment method, like Account-to-Account payments, in days rather than the months it would have taken us in-house,” says Lucas Quinio, Conforama’s Head of Payments.
Primer’s tools also empower Conforama to optimize every stage of the payment lifecycle, from checkout to reconciliation. Since going live, Conforama has already seen higher authorization rates and streamlined payment flows, helping them improve the overall checkout experience and drive conversions.
With Primer, Conforama has transformed payments from a backend function into a strategic asset.
Read the full case study: Reimagining the role of payments at Conforama
Offer alternative payment methods to your customers with Primer
Alternative payment methods have become increasingly crucial for businesses to maintain a competitive edge in the market. Providing customers with various payment options like digital wallets, mobile payments, and cryptocurrencies allows businesses to stay in tune with the shifting demands of their customer base.
With Primer's unified payments infrastructure, you can streamline your payment process, create exceptional customer journeys, and conquer new markets.
Try Primer and ignite growth today.
Frequently Asked Questions (FAQs)
Are there payment methods I can use with no payment fees?
Payment methods involve multiple parties and processes, each with a unique fee structure.
Payment rails, which are mechanisms that allow the transfer of funds from one account to another, can be complex. Each party involved in the payment process, such as payment processors, banks, and card networks, may have their fee structures in place.
It is crucial to carefully review and compare the fee structures of different payment methods, considering factors such as transaction volume, currency conversion, chargebacks, and other potential costs.
Through diligent research and proactive negotiations with payment providers, businesses can find options that provide more favorable fee arrangements and greater transparency regarding the associated costs.
Which payment method is the best for paying globally?
Businesses should evaluate the regions or countries where they conduct business and identify their target markets for expansion. This understanding will help them tailor their payment methods to the preferences and behaviors of those specific markets.
They should also research the availability, acceptance, and practicality of various payment methods in their target markets, accounting for infrastructure and regulatory considerations to enhance cross-border transactions.
https://docs.stripe.com/payments/eps?locale=en-GB
https://worldpay.globalpaymentsreport.com/en
https://www.mckinsey.com/industries/financial-services/our-insights/the-future-of-payments-in-africa
https://www.statista.com/topics/982/mobile-payments/
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