Guide to alternative payment methods

Key takeaways

• Alternative payment methods (APMs) are the primary way most customers pay online in many markets – not a niche backup to cards.

• Payment preferences vary by region, so the right mix depends on where your customers are and what they already trust.

• With Airwallex, you can accept 160+ local and global payment methods through a single integration, so you can move into new markets without adding more providers.

Selling across borders is more achievable than ever. But here’s the catch: your customers don’t all pay the same way. A shopper in the Netherlands expects to pay by bank transfer, a customer in China will likely reach for Alipay or WeChat Pay, and someone in Brazil might use PIX. If your checkout only offers Visa and Mastercard, you’re not just missing a preference – you’re losing the sale entirely.

So let’s get into it: what APMs are, the main types, how preferences vary by region, and how to work out which ones make sense for your business.

What are alternative payment methods?

Alternative payment methods (APMs) are any payment methods that aren’t traditional cash or a major international card scheme: Visa, Mastercard, or American Express. Think of them like the local roads that run alongside a motorway. They get customers to the same destination, but through routes they’re more familiar with. That means more completed checkouts and fewer customers dropping off because they couldn’t pay the way they wanted to.

The ‘alternative’ label can be a little misleading, though. In many markets, these methods aren’t alternative at all, they’re the default. Digital wallets, bank transfers, and local payment schemes are how the majority of online purchases are made across Asia, Europe, and Latin America.

Why alternative payment methods matter for your business

If a customer reaches your checkout and doesn’t see a payment method they recognise, most of them won’t look for a workaround. They’ll leave. That’s a direct cost, and it compounds quickly when you’re selling across multiple markets.

Here’s why you’d add APMs:

• Reduce cart abandonment: If a customer doesn’t see a familiar payment option at your checkout, they’re likely to leave without buying.

• Enter new markets: Some markets are near-impossible to crack without local payment methods – no Alipay, no sale in China; no iDEAL, far fewer sales in the Netherlands.

• Lower processing costs: Bank transfers and local schemes often cost less to process than international card transactions.

• Build customer trust: Familiar, locally trusted methods make your customers more comfortable completing a purchase.

Which types of alternative payment methods are there?

APMs aren’t one thing. They cover several distinct payment types, each working differently and fitting different situations depending on who your customers are and where they’re based. Here’s a quick overview:

Digital wallets

Digital wallets are apps or services that store your customer’s card or bank details, so they can pay without re-entering them every time. Think of it like keeping your card saved in your phone – instead of typing 16 digits at checkout, you authenticate with a tap or a fingerprint.

They work through tokenisation, which replaces your real card details with a unique code during the transaction, so the merchant never sees your customer’s sensitive data. Digital wallets split into two groups:

• Global wallets: Apple Pay, Google Pay, and PayPal work across many markets.

• Regional wallets: Alipay and WeChat Pay are dominant in China and essential for any business selling to Chinese customers.

Bank transfers and account-to-account payments

Bank transfers and account-to-account (A2A) payments move money directly from your customer’s bank account to yours, bypassing card networks entirely. They’re push payments where your customer initiates the transfer from their own bank, rather than you pulling funds from their card. Think of it like a direct bank transfer between friends, but built into an online checkout flow.

These methods often settle faster and carry lower processing fees than card transactions. Regional examples include:

• iDEAL: The dominant online payment method in the Netherlands

• SEPA: Euro bank transfers across Europe

• PIX: Brazil’s real-time payment system, available around the clock

• Direct Credit: New Zealand’s standard bank transfer method

Buy now, pay later and direct debit

Buy now, pay later (BNPL) lets your customers complete a purchase and pay in instalments or at a set future date, often interest-free. It tends to perform well on higher-value purchases and among younger or credit-averse shoppers – it’s a meaningful nudge for anyone hesitant about paying upfront. Popular BNPL providers include Klarna, Afterpay, and Zip.

Direct debit works differently; it’s a recurring automatic pull from your customer’s bank account. It is set up once, and then it runs on a schedule. It suits subscriptions and recurring billing rather than one-off purchases. Here’s how the two compare:

Local card schemes and cash-based methods

Local card schemes are card networks that operate within a specific country or region, often preferred over Visa or Mastercard by local customers. Examples include UnionPay in China, Cartes Bancaires in France, Bancontact in Belgium, RuPay in India, and mada in Saudi Arabia. Even if your customer has a Visa card, they may prefer to pay through their domestic network, so accepting only international schemes can still cost you sales.

Cash-based methods work differently; your customers generate a barcode or reference code at online checkout, then pay in cash at a participating retail location. OXXO in Mexico and Multibanco in Portugal are well-known examples. These methods matter in markets where card or bank account access is lower, and they let you reach customers who wouldn’t otherwise be able to complete an online purchase.

What payment methods do customers prefer in each region?

Payment preferences are shaped by local banking infrastructure, consumer habits, and regulation – not just technology. What works in the US won’t necessarily work in Brazil or Japan. Here’s a regional breakdown:

North America

Digital wallets play a leading role in online purchases – PayPal, Apple Pay, and Google Pay are widely used. ACH (Automated Clearing House) bank transfers are common for business-to-business (B2B) transactions and subscription payments because they cost less than cards and don’t expire. BNPL is growing fast, particularly among younger shoppers buying higher-value items.

Europe

Europe is the most fragmented APM market – each country has its own strongly preferred method. iDEAL leads in the Netherlands, Bancontact in Belgium, Cartes Bancaires in France, BLIK in Poland, Bizum in Spain, and Swish in Sweden. SEPA Direct Debit covers euro bank transfers across the region, and BNPL is especially strong in Germany and the Nordics. Offering only global card networks in Europe isn’t enough – local methods convert better than international cards in almost every country across the region.

Asia Pacific

Digital wallets dominate here – if you’re selling to customers in China, Alipay and WeChat Pay aren’t optional. Elsewhere, PayNow is widely used in Singapore, PromptPay in Thailand, GrabPay across South East Asia, and DANA in Indonesia. Australia and New Zealand lean more towards card payments and BNPL – Afterpay was founded in Australia – while Japan uses convenience store payments and domestic card schemes alongside digital wallets.

Latin America

PIX has transformed real-time payments in Brazil. It’s instant, available around the clock, and free for consumers. It’s rapidly becoming the dominant method for online purchases. Cash voucher systems like OXXO remain important in Mexico, where bank account access is lower. Brazil also has a strong culture of parcelamento – instalment payments – so it’s worth factoring that into your checkout design.

Middle East and Africa

Government-backed payment networks are essential across the Middle East: mada in Saudi Arabia and KNet in Kuwait are widely used for online purchases. In sub-Saharan Africa, mobile wallets are critical. M-Pesa dominates East Africa and reaches customers who don’t have traditional bank accounts. If you only accept international cards, you’re effectively shut out of a large portion of consumers in these markets.

How to choose the right alternative payment methods for your business

Understanding the APM landscape is one thing. Deciding what to actually offer – without multiplying your provider relationships – is where you might get stuck. The goal isn’t to offer every APM, it’s to offer the right ones for your customers.

Start with your target markets. The markets you sell in – or plan to enter – determine which APMs are non-negotiable. Use the regional breakdown above to identify which methods are dominant in your highest-revenue or fastest-growing markets. If you're planning an international expansion, a cross-border payments checklist can help you assess where your current setup has gaps.

Think about what your customers already trust. When your customers see an unfamiliar payment method at checkout or don’t see the one they normally use, many will abandon their basket rather than proceed. Familiar payment methods get customers over the line. New ones, however clever, often don’t.

Think about processing costs and settlement speed. Bank transfers and local schemes often cost less than international card processing. But cost isn’t the only factor – settlement speed matters too. Some APMs settle in real time, others take days, which affects your cash flow directly.

Consider like-for-like settlement. Like-for-like settlement means collecting and holding funds in the same currency your customer paid in, rather than converting immediately. Think of it like keeping euros in a euro account rather than converting them to NZD the moment they arrive. You only convert when you actually need to, at a rate and time that works for you. This avoids unnecessary foreign exchange (FX) conversion costs and gives you more control over your margins.

Don’t try to launch everything at once. Start with the highest-impact methods for your key markets, then expand based on actual conversion data. Payment preferences evolve, and new methods emerge. Treat your APM mix as something you refine over time, not a one-time decision.

How Airwallex can help you accept payments in every market

If you’re expanding your eCommerce business internationally and want to accept more payment methods without signing separate contracts for every market, Airwallex Checkout lets you accept 160+ local and global payment methods – cards, wallets, and bank transfers – through a single integration.

With local acquiring in 35+ markets, Airwallex processes payments through local networks which can mean better authorisation rates and lower cross-border fees. And with like-for-like settlement through Global Accounts, you can collect funds in your customer’s currency and hold them there — so you’re not forced to convert straight away and lose money to exchange rates.

Here’s what that looks like in practice:

• One integration: Accept local and global payment methods without separate provider contracts for each market.

• Local acquiring: Process payments through local networks in 35+ markets for better authorisation rates.

• Like-for-like settlement: Collect, hold, and spend in the same currency your customer paid in – no forced conversion.

• ML-powered optimisation: Machine learning (ML)-powered automatic retries and routing reduce failed payments without manual effort.

Frequently asked questions

Do you need to offer every alternative payment method to sell internationally?

No – focus on the methods most used in your key markets rather than covering every option. A targeted approach based on your customers’ locations and preferences will outperform a long list of rarely used methods every time.

What is the difference between alternative payment methods and local payment methods?

The terms overlap – local payment methods are APMs that are dominant in a specific market, like iDEAL in the Netherlands or PIX in Brazil. All local payment methods are APMs, but not all APMs are local – PayPal, for example, is a global APM used across many markets.

Are bank transfers cheaper to process than card payments?

Often yes – bank transfers and local schemes typically carry lower processing fees than international card transactions, though costs vary by method, provider, and region.

Are alternative payment methods secure for online transactions?

Yes – most APMs use tokenisation, bank-level authentication, or biometric verification, which means sensitive payment data isn’t exposed during a transaction. In many cases, this reduces fraud risk compared with entering card details manually.

Can you collect and hold funds in the same currency your customer pays in?

Yes, with the right provider. Airwallex’s like-for-like settlement lets you collect funds in a customer’s currency and hold them in a Global Account in that currency, so you’re not forced to convert straight away and lose money to exchange rates.

Airwallex (New Zealand) Limited is registered with the New Zealand Financial Service Provider Register (FSP No. 1001602) to provide a range of financial services in New Zealand.