Alternative payment methods: 2026 guide for businesses

Key takeaways:

• Alternative payment methods (APMs) are non-card, non-cash ways to pay, including digital wallets, bank transfers, direct debit, buy now pay later, and prepaid vouchers. In most markets, at least one APM sits alongside cards as a dominant payment option.

• When you sell across borders, your customers expect to pay with methods they already use locally. Offering only cards can cost you sales in markets where APMs are the default, such as PayNow in Singapore or AliPay in China.

• Airwallex Payments lets you accept 160+ local payment methods across 180+ countries through a single integration, with multi-currency settlement into one account.

Alternative payment methods now account for a significant share of online transactions in most major markets.

If your business sells internationally, understanding which alternative payment methods your customers use, and where, is one of the most direct levers you have over checkout conversion.

This guide covers what alternative payment methods are, which ones dominate in each major market, why they matter for cross-border growth, and how to choose the right mix for your business.

If you're looking for a breakdown of all payment methods available to Singapore merchants, see our payment methods guide.

What are alternative payment methods (APMs)?

Alternative payment methods (APMs) are payment options that don't rely on traditional card networks like Visa and Mastercard or cash. They include digital wallets, instant bank transfers, direct debit, buy now, pay later (BNPL), and prepaid vouchers.

They're especially important for businesses selling internationally because payment preferences vary by market. In many countries, customers are more likely to use a local payment method than a card.

A shopper in China may expect to pay with Alipay, while a customer in Germany might prefer Wero. If those options aren't available, many will abandon their purchase rather than switch to a card.

5 types of alternative payment methods

APMs fall into five main categories. Knowing which type applies in a given market helps you narrow down what to add.

1. Digital wallets

Digital wallets let customers store card details or a prepaid balance in an app and pay with a tap or a few clicks. They work for both online and in-store payments, and customers do not need to re-enter card details at checkout.

Examples: GrabPay, Apple Pay, Google Pay, WeChat Pay, AliPay

2. Bank transfers

Modern bank transfer APMs redirect customers to their banking app to authorise a payment directly from their account. They process in real time, provide instant confirmation, and carry no chargeback risk for merchants.

Examples: PayNow, iDEAL, UPI

3. Direct debit payments

Direct debit lets you pull funds from a customer's bank account on a scheduled date, with their authorisation. It suits subscriptions, memberships, and any recurring payment.

Examples: GIRO, Bacs Direct Debit, ACH Direct Debit

4. Buy now, pay later (BNPL)

With BNPL, the provider pays your business the full amount upfront and the customer repays in instalments. It reduces the cost barrier for larger purchases and tends to lift conversion among younger shoppers.

Examples: Atome, Klarna, Afterpay

5. Prepaid cards and vouchers

Prepaid options hold a fixed stored value that customers spend without linking to a bank account or traditional card. They are common in gaming, gifting, and markets where many consumers do not hold bank accounts.

Popular alternative payment methods around the world

Payment habits look very different from country to country. Here’s a quick overview:

Singapore

Cards remain important for higher-value purchases, but instant bank transfers and digital wallets dominate everyday spend:

• PayNow is the most widely used payment method for peer-to-peer and business transactions, preferred by 68% of Gen Z consumers in Singapore.¹

• GrabPay is the leading wallet, used by about 29% of Gen Z shoppers.¹

• Apple Pay and Google Pay also have strong adoption, particularly for contactless in-store payments.

For merchants, supporting PayNow alongside cards covers the two dominant payment tracks in Singapore. Adding GrabPay and one or two global wallets gives you meaningful reach with younger and mobile-first shoppers.

Malaysia

Most online payments in Malaysia go through FPX (Financial Process Exchange), an instant bank transfer scheme that connects directly to all major Malaysian banks.

DuitNow, Malaysia's real-time transfer network, works similarly to Singapore's PayNow. Touch 'n Go eWallet and GrabPay are the leading wallets for both eCommerce and everyday in-store spending.

China

China is the clearest example of APMs becoming the default. AliPay and WeChat Pay handle the overwhelming majority of everyday transactions, from small in-store purchases to large online orders. If you sell to Chinese consumers (whether they’re in China or travelling abroad), supporting at least one of these two is a must.

Hong Kong

Visa and Mastercard still carry significant volume in Hong Kong, but wallets are growing. AlipayHK, WeChat Pay, and Octopus (primarily for transit and retail) are the most recognised options.

Many merchants also accept contactless card payments through Apple Pay and Google Pay.

India

Unified Payments Interface (UPI) has become the dominant payment method in India. Customers initiate transfers from their banking or UPI app, often by scanning a QR code, and funds move in real time.

UPI handles an enormous share of India's digital payment volume and is the first APM to prioritise if you are selling to Indian consumers.

Australia

Wallets are growing fast in Australia, with Apple Pay and Google Pay both seeing strong consumer adoption for online and in-store payments.

PayID, Australia's real-time account-to-account transfer system, is increasingly used by businesses for invoice and B2B payments. Afterpay, which originated in Australia, remains a prominent BNPL option among local shoppers.

Europe

Europe has historically required a different APM for each market: iDEAL in the Netherlands, Giropay in Germany, Paylib in France. That is changing with Wero, a pan-European account-to-account wallet launched in 2024 by the European Payments Initiative.

Backed by 16 European banks, Wero had over 45 million users and more than €7.5 billion in transactions as of late 2025,² and is rolling out for eCommerce across Germany, France, and Belgium through 2026. Airwallex merchants can offer Wero directly through the platform.

Beyond Wero, PayPal dominates online APM spend across Western Europe, Klarna leads in the Nordics for BNPL, and SEPA direct debit is the standard for recurring billing across the eurozone.

America

Cards are still the default in the US, but PayPal is a major APM with very high consumer trust. Apple Pay and Google Pay have grown significantly for mobile and contactless payments. Cash App Pay has an active user base, particularly among younger demographics.

For merchants selling higher-ticket goods, Affirm and Klarna are the leading BNPL options.

Middle East and North Africa

Cash and cards remain common across the region, but digital payments are growing quickly.

In Saudi Arabia, mada (the national debit network) handles a large share of card and digital transactions. STC Pay is the leading wallet. In the UAE, local wallets and payment apps are gaining ground alongside international options.

In Egypt, Fawry is widely used for bill payments and eCommerce. Across the region, QR-based payments and merchant apps are expanding rapidly.

Why offer alternative payment methods: 4 key benefits

Adding the right mix of alternative payment methods helps you convert more customers, lower transaction costs, and support business growth. Here are five key benefits of offering APMs.

1. Higher checkout conversion

When customers see a payment method they already use, checkout feels familiar and low-risk. When they don't, many leave.

Our research shows that 77% of consumers are likely to abandon a cart if their preferred payment method isn't available. For cross-border merchants, this risk is higher: a shopper in China who expects AliPay, or a Dutch shopper used to Wero, won't treat a card form as an acceptable substitute.

2. Access to more customers in each market

In some markets, the dominant payment method isn't a card at all. Supporting the local option is what gets you in front of those customers in the first place.

This is especially relevant if you sell into China, India, or markets across Southeast Asia, where specific APMs account for the majority of digital transactions.

3. Lower processing costs

Cards are convenient, but they carry interchange fees, FX markups, and chargeback risk. Account-to-account bank transfers and direct debit schemes often come with lower per-transaction costs and zero chargeback exposure.

For high-volume merchants, the difference adds up.

4. Faster settlement and cleaner cashflow

Many modern APMs (PayNow, UPI, FAST, Wero) settle in real time. That means funds land in your account the same day, not two to five business days later like card settlements.

For businesses managing working capital across currencies, faster settlement makes cash flow easier to predict and control.

How to choose alternative payment options for your target markets

Not every APM is worth adding to every checkout. Here is a practical framework for deciding which ones to prioritise as you expand.

Start with your highest-traffic markets

Look at where your orders are already coming from, or where you plan to grow first.

The country-by-country breakdown above gives you the dominant APM for each market — start there rather than trying to support every option at once.

Identify the one or two methods that dominate

Most markets have one or two APMs that cover the majority of non-card transactions. Adding those two covers most of the gap. You rarely need five APMs per market to get meaningful lift in conversion.

Match the APM type to your business model

Not every APM type suits every business. Direct debit and SEPA are the right choice for subscription models. BNPL adds most value for higher-ticket goods or price-sensitive demographics. Wallets and instant bank transfers cover the broadest range of everyday purchases.

If you sell B2B on invoice terms, bank transfer schemes with instant confirmation are typically more appropriate than BNPL or wallets.

Consider settlement currency and FX costs

Each APM settles in a local currency. If you're accepting iDEAL in the Netherlands and converting euro settlements into SGD daily, the FX cost compounds.

Look for a payment provider that lets you hold balances in the settlement currency and convert on your own terms. Airwallex supports like-for-like settlement in 14 currencies, so you avoid forced conversion each time a local payment clears.

Factor in integration overhead

Adding ten APMs through ten separate provider relationships is impractical. The more realistic path is a single payment gateway that already supports the local methods you need, so you can turn on a new market without a new integration.

For reducing checkout abandonment more broadly, see our guide to reducing checkout abandonment in Singapore.

How Airwallex helps you accept alternative payment methods globally

If you're selling internationally, Airwallex makes it easier to offer the payment methods customers expect without stitching together multiple providers.

• Accept 160+ local payment methods. Offer popular options like PayNow, Alipay, Touch 'n Go, Wero, and PayPal across 180+ countries through a single integration.

• Settle in 14 currencies. Receive payments in the customer's currency and hold funds without automatic conversion, giving you control over when to exchange.

• Collect like a local business. Global Accounts let you receive payments and pay suppliers in 70+ countries without opening a local bank account in each market.

• Integrate with your existing systems. Connect with platforms like Shopify, WooCommerce, Xero, NetSuite, or build directly with our APIs.

Frequently asked questions (FAQs)

What kind of business needs alternative payment methods?

Any business that sells online or across borders. If your customers are in different countries, shop mostly on mobile, or regularly ask for wallets or local payment options, offering only cards will cost you sales. For a full breakdown of payment methods used in Singapore specifically, see our payment methods guide for Singapore businesses.

What fees do merchants pay on alternative payment methods?

It depends on the method. Account-to-account bank transfers and direct debit schemes are typically cheaper per transaction than cards, with lower or no chargeback exposure. BNPL tends to cost more but can lift conversion enough to offset that on higher-ticket items. Always compare the full picture: transaction fees, FX markups, refund handling, and settlement speed.

Are alternative payment methods secure?

Yes. Most major APMs use tokenisation, multi-factor authentication, and built-in fraud controls. Risks vary by method: bank transfers have no chargeback risk but limited dispute resolution, while cards offer buyer protection at higher cost. Choose a provider that follows PCI DSS standards and offers strong fraud monitoring.

What are the downsides of offering too many APMs?

Each additional APM adds operational complexity: separate reporting, different refund flows, and sometimes new settlement currencies. Adding methods without a clear rationale can increase overhead without meaningfully lifting conversion. The fix is to be selective: prioritise the one or two dominant methods per market, and use a single platform that handles them all in one integration.

What is Wero and should I offer it?

Wero is a pan-European account-to-account wallet launched in 2024 by the European Payments Initiative, backed by 16 European banks. It is designed to replace fragmented country-specific methods like iDEAL (Netherlands), Giropay (Germany), and Paylib (France) with a single wallet that works across European markets. If you sell to customers in Germany, France, or Belgium, it is worth supporting. Airwallex merchants can offer Wero directly through the platform.

How do I start accepting alternative payment methods?

The most practical approach is a single payment gateway that already supports the local methods you need, rather than integrating each provider separately. Airwallex supports 160+ local payment methods across 180+ countries through one integration, with all settlements flowing into the same multi-currency account. You can see the full list of supported payment methods in the Airwallex docs.

Sources

1. https://www.xero.com/sg/media-releases/digital-payment-trends-singapore-gen-z-leading-shift/

2. https://www.airwallex.com/global/newsroom/airwallex-becomes-a-principal-member-of-epi-to-bring-wero-europes-unified