Alternative payment methods: what they are, why they matter, and how to choose them for your business

Non-card payment methods now account for 61% of global e-commerce transactions in 2024, a fundamental shift in how consumers expect to pay online. EY research shows that alternative payment method volumes reached $19 trillion globally. Yet 56% of online shoppers abandon purchases if their preferred payment method is not available. Credit cards are not dominant in most of the world's fastest-growing markets.

This guide walks through what alternative payment methods are, the major categories, how they vary by region, and how to choose which ones to offer. We also cover how Nuvei helps merchants support 720+ payment methods through a single integration, reaching customers wherever they are.

What are alternative payment methods?

Alternative payment methods, or APMs, are any payment system that is not a card network (Visa, Mastercard, American Express). This definition encompasses digital wallets, real-time bank transfers, buy now, pay later services, prepaid vouchers, cash-based systems, and cryptocurrency.

The distinction matters operationally. A card network is infrastructure owned and operated by Visa or Mastercard; every card transaction flows through their processing rules and settlement standards. APMs operate independently. A digital wallet like Apple Pay uses card networks as one routing option but is itself a distinct payment system. Pix in Brazil, iDEAL in the Netherlands, and Alipay in China are autonomous payment systems with their own infrastructure, governance, and settlement.

APMs emerged not as a novel innovation but as a response to economic reality. In many markets, credit card penetration is low. The World Bank estimates 1.4 billion unbanked adults globally. In Asia, mobile-first populations prefer digital wallets. 

In Europe, regulatory requirements and consumer distrust of card networks drove the creation of real-time bank transfers as alternatives. In Latin America, cash remains dominant despite digitization. The word "alternative" reflects a Western, card-centric view. 

For most of the world's fastest-growing markets, APMs are not alternatives—they are the primary payment method

As Adina Pop, SVP Global Payment Method at Nuvei says, “In short, LPMs can be a subset of APMs. What makes something an LPM is that it is built into and trusted within a specific geography. What makes something an APM is simply that it is not a traditional card or cash payment.”

The major APM categories explained

Digital wallets

Digital wallets are the fastest-growing APM category globally. They work by storing payment credentials (card data, bank accounts, or digital money) in encrypted form, then using proximity, QR code, or online authentication to authorize transactions without exposing the underlying credential.

The APAC region dominates wallet adoption. Alipay and WeChat Pay account for 89% of Chinese e-commerce. GrabPay, GoPay, Dana, and OVO are the dominant methods across Southeast Asia. In the West, Apple Pay and Google Pay are growing rapidly, and PayPal remains the largest third-party wallet by transaction volume.

For merchants, wallets provide two advantages: (1) reduced friction—a single tap or click completes the payment—and (2) reduced fraud because the merchant never sees the underlying card or account number. Discover more in the Nuvei APM guide.

Real-time bank transfers

Real-time bank transfers move money directly from a customer's bank account to the merchant's account. They are instant (settlements occur within seconds), have low fraud rates because they are reversible by the customer's bank (not by the customer alone), and carry low or zero interchange fees.

Regional examples include Pix in Brazil, which has registered over 140 million users since launch in 2021; iDEAL in the Netherlands, which holds 63% market share in online payments; Faster Payments in the UK; and UPI in India, which processes over 10 billion monthly transactions. SEPA Instant is emerging across the EU as a unified standard.

Merchants should prioritize real-time transfers in markets where they dominate. They reduce chargeback exposure significantly and settle at near-zero cost, improving margins.

Buy now, pay later

Buy now, pay later (BNPL) services allow customers to split a purchase into multiple payments, usually interest-free, with the BNPL provider funding the transaction and collecting payment from the customer later.

The BNPL market is reaching $750 billion by 2026. Leading providers include Klarna and Afterpay (now Afterpay US), Scalapay in Europe, and Tamara in the Middle East. Merchants report conversion uplifts of 20-30% for high average order value purchases when BNPL is available.

However, regulatory changes are material. The UK's FCA and EU regulators have classified BNPL as regulated consumer credit, meaning providers must now comply with lending rules. This is likely to increase the cost of BNPL provision and reduce profitability for some providers.

Prepaid cards and cash vouchers

Prepaid vouchers allow customers to buy a voucher at a retail location and redeem it online. Boleto in Brazil is the most widely used, allowing payments to be made at thousands of retail locations and banks. OXXO in Mexico, Fawry in Egypt, and Neosurf globally serve similar functions.

These methods are critical for reaching unbanked and underbanked populations. They require no bank account, no credit history, and no digital payment infrastructure beyond the retail network. For merchants, they require reconciliation management because customers generate a reference number at checkout, make the payment offline, and confirmation takes 24-48 hours.

Cash-based online payments

Some payment systems allow customers to pay cash at a physical location (a retail outlet, post office, or bank) for an online purchase. The customer receives a reference code during checkout and uses it to complete the cash payment. Confirmation is typically manual or next-day.

These are still significant in LATAM and Southeast Asia. They serve customers with minimal digital banking infrastructure. The tradeoff for merchants is operational complexity—each transaction requires post-payment verification—but the reach is substantial.

Cryptocurrency

Crypto payments (Bitcoin, Ethereum, stablecoins) are growing in merchant adoption, particularly for gaming and digital goods. Volatility management and regulatory requirements vary by jurisdiction. Stablecoin payments are emerging as a subset focused on stable value transfer, particularly for cross-border B2B.

For merchants, crypto payment support remains niche but is growing. It requires integration with a crypto payment processor and understanding of regulatory requirements in each market.

APMs by market: what your customers expect to pay with

Payment method preference is regional. Customers in different markets have deeply ingrained expectations. A merchant selling across multiple regions must map these expectations and offer the relevant subset of methods in each market.

How to choose the right APMs for your business

Start with your top 5 markets by revenue

Identify where your customers actually are, not where your head office is. Map your top 5-10 markets by revenue. For each market, identify the 2-3 dominant payment methods. This becomes your core APM list.

Avoid checkout fatigue

Research by Stripe and Baymard shows that too many payment options at checkout reduces conversion. The cognitive load of choice has a measurable negative effect. Show regionally relevant methods only, not your entire APM library at checkout.

Smart checkout design uses geolocation to identify the customer's likely region and shows the 3-4 most relevant methods, with an "other payment methods" fallback. This improves conversion while maintaining access to less common methods.

Evaluate the total cost of APMs

APM costs vary significantly. Some APMs (Pix, UPI) have zero or near-zero interchange. Others (BNPL) carry merchant discount rates of 2-6%. Prepaid voucher redemption involves reconciliation costs. Factor the total cost into your calculation of which methods to support.

Check regulatory and compliance requirements

Some APMs require local registration or licensing. BNPL is now regulated as consumer credit in the EU and UK. Crypto acceptance has jurisdiction-specific rules. Before committing to an APM, verify regulatory requirements in your target markets.

Evaluation checklist: choosing an APM provider

How Nuvei handles alternative payment methods

Nuvei is built to support global e-commerce at scale, with a native focus on merchant access to local payment infrastructure. The following capabilities are available to merchants processing international payments.

1. 720+ payment methods through a single integration

Nuvei supports over 720 alternative payment methods globally, covering more than 200 markets. A single API call handles all APM processing—there is no need to build separate integrations per method. Methods are continuously added as regional preferences evolve.

2. Dynamic APM presentation per customer location

The platform automatically detects the customer's location and shows only the relevant APMs for that region. This reduces checkout fatigue while maximizing conversion in each market. Merchants can also manually configure which methods appear in which regions.

3. Unified reconciliation across all methods

All APM transactions settle into a single reporting view. Reconciliation is unified, not fragmented across multiple provider dashboards. This dramatically reduces operational complexity, especially for merchants supporting 20+ methods across multiple regions.

4. Local acquiring in 50 markets

Local acquiring coverage spans 50 markets, including North America, Europe, LATAM, APAC, and the Middle East. Local acquiring routes transactions through in-country banks, improving authorization rates and reducing fraud on card transactions.

5. BNPL options including Klarna, Afterpay, Scalapay, and regional providers

Nuvei integrates major BNPL providers including Klarna, Afterpay, Scalapay, and Tamara. BNPL is automatically regulated as credit where required, with full compliance handling by Nuvei.

6. Cryptocurrency acceptance

Nuvei supports crypto payments including Bitcoin, Ethereum, and stablecoins. Volatility management and regulatory compliance are handled by the platform.

7. Prepaid and voucher networks globally including Boleto, OXXO, and Fawry

Prepaid and voucher methods are supported globally, including Boleto in Brazil, OXXO in Mexico, and Fawry in Egypt. Reconciliation is automated.

8. Real-time bank transfers including Pix, iDEAL, UPI, and Faster Payments

Real-time bank transfers including Pix, iDEAL, UPI, and Faster Payments are integrated natively. These methods have the highest margins (zero to near-zero interchange) and the lowest fraud rates.

9. APM specialist team with regional expertise

Beyond technology, Nuvei assigns APM specialist teams to merchants launching in new regions. These teams understand local issuer behavior, preferred methods by country, and regional payment processing best practices.

Frequently asked questions

What is the difference between an alternative payment method and a local payment method?

An alternative payment method (APM) is any payment system outside the card networks—digital wallets, bank transfers, BNPL, etc. A local payment method is one that is dominant in a specific geography. All local methods are APMs, but not all APMs are local methods. For example, PayPal is an APM globally but is not the local dominant method in any specific market.

Which alternative payment methods are growing fastest in 2025?

Real-time bank transfers (Pix, iDEAL, UPI) are growing fastest by transaction volume due to their speed, low cost, and regulatory support. BNPL is growing by merchant adoption but facing regulatory changes. Digital wallets continue to dominate in APAC. See the WorldPay Global Payments Report for detailed market-by-market data.

Do I need to integrate each APM separately?

No. A provider like Nuvei handles all 720+ methods through a single API integration. This dramatically reduces development effort and time-to-market. Without a unified platform, integrating each method separately would require months of work.

How do I know which APMs to offer in each market?

Start with the regional dominance data in this guide. The table above shows the 2-3 dominant methods by region. Offer those first, then add secondary methods based on customer demand. Tools like Nuvei's payment solution show which methods your customers are requesting at checkout.

Are alternative payment methods more or less secure than cards?

It depends on the method. Real-time bank transfers are more secure than cards because they are reversible by the customer's bank (not by the customer alone), creating a strong incentive for the bank to verify ownership. Digital wallets provide strong fraud protection through tokenization. BNPL is regulated as credit and includes consumer protection. Cards carry a higher chargeback rate because customers can dispute charges after delivery of goods. See Nuvei fraud management for details.

What is the settlement process for APMs like Pix or iDEAL?

Settlement timelines vary. Pix settles within seconds. iDEAL settles within one business day. Settlement goes directly to the merchant's bank account in most cases. Nuvei handles settlement for all methods, with transparent reporting of settlement status for each transaction.

How does BNPL regulation affect merchants in the UK and EU?

The UK's FCA and EU regulators have classified BNPL as regulated consumer credit. This requires BNPL providers to comply with lending rules, meaning merchants will face fewer BNPL providers and potentially higher merchant discount rates as providers absorb compliance costs. Merchants should verify that their BNPL provider handles all regulatory compliance.

How does Nuvei decide which APMs to show to a customer at checkout?

Nuvei's platform detects the customer's geolocation and automatically surfaces the 3-4 most relevant APMs for that region. Merchants can also set custom rules (e.g., "always show BNPL for orders over $100"). Methods are shown dynamically in real time.