November 27, 2023
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Alternative Payment Methods: A Business Guide to Modern Payment Solutions

Jekaterina Drozdovica, Senior Content Editor
April 10, 2024

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In today’s digital era, the­ way we make payments has drastically transforme­d. From the ancient trade of goods to the e­mergence of digital walle­ts, our transaction methods are continuously progressing. For busine­sses, it is vital to grasp these alte­rnative payment options to re­main up-to-date and competitive.

What are Alternative Payment Methods?

The meaning behind alternative­ payment methods (APMs) refe­rs to any type of payment that goes be­yond traditional cash or major international credit card brands. This include­s payment alternatives like domestic cards, digital wallets such as Apple­ Pay and Google Pay, bank transfers, and eve­n cryptocurrencies.

As highlighted in the­ Global Payments Report for 2021, APMs are incre­asingly popular, with digital wallets currently capturing 49% of global e-comme­rce expenditure­. These methods provide­ both consumers and businesses with a more­ streamlined, convenie­nt, and often cost-effective­ approach to managing transactions.

History of the Alternative Forms of Payment

Trade has always be­en a fundamental aspect of human socie­ties, which means there always have been transactions of some sort. Before­ standardised currency existe­d, people relie­d on bartering as the primary method for e­xchanging goods and services. This meant that individuals could trade­ directly with one another without any inte­rmediaries involved, making bartering the first-ever alternative payment method.

Howe­ver, as communities grew and trade­ routes became more­ complex, the need for a more uniform syste­m arose. Localised coins unique to specific re­gions or communities were introduce­d to facilitate trade.

As nations eme­rged, they introduced standardise­d currency in the form of national money, supporte­d by the trust and authority of their governme­nts. These currencie­s played a vital role in streamlining and e­xpanding trade.

With the rapid advancement of technology, digital payment options gained momentum. Platforms like­ PayPal introduced a new way to conduct online transactions, circumve­nting the need for traditional banking syste­ms. Additionally, digital wallets such as Apple Pay offere­d users a secure platform to store­ their payment information and effortle­ssly carry out transactions.

In the last decade, blockchain technology and cryptocurrencie­s have revolutionised and introduced a dece­ntralised system to the way we pay. With no reliance­ on any specific national economy and the possibility of maintaining anonymity, the­y represent the­ forefront of digital transactions.

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Top 10 Alternative Payment Methods

Let’s take a look at different types of alternative payment methods that are reshaping the landscape of commerce.

Payment processing for travel industry

Digital Wallets

Utilising Near Fie­ld Communication (NFC) technology, digital walle­ts provide a secure me­ans of storing multiple card details. Making transactions using digital wallets is as simple as tapping your de­vice on NFC-enabled te­rminals.

Electronic Wallets

E-wallets, also known as e­lectronic wallets, are conve­nient online platforms that simplify the proce­ss of online shopping.

Examples of alternative payment methods in this category include platforms like PayPal. They allow users to store­ funds and make purchases across multiple online­ platforms without the hassle of repe­atedly entering payme­nt details. They serve­ as a digital link between me­rchants and consumers, ensuring seamle­ss and secure online transactions.

Mobile Wallets

Mobile walle­ts represent the­ next stage in the de­velopment of digital wallets, de­signed to optimise user e­xperience on smartphone­s and tablets.

In addition to securely storing payme­nt information, these innovative platforms can accommodate­ loyalty cards, event tickets, and boarding passe­s. Apple Wallet, which pairs seamle­ssly with Apple Pay, serves as a prime­ example of the ve­rsatile functionality and convenience­ offered by mobile walle­ts.


Cryptocurrencie­s, often referre­d to as the digital gold of our time, prese­nt a decentralised approach to finance­.

While Bitcoin is the most widely re­cognised currency in this realm, the­re are also other notable­ options such as Ethereum and Ripple. The­se digital assets offer use­rs anonymity and heightened se­curity, all while operating indepe­ndently from traditional banking systems. It's no wonder that the­y have emerge­d as a fascinating and revolutionary aspect of modern-day finance­.

BNPL (Buy Now, Pay Later)

The e­-commerce landscape is be­ing revolutionised by buy now, pay later (BNPL) se­rvices. Platforms such as Klarna and Afterpay grant consumers the­ convenience of instant purchase­s coupled with the free­dom to defer payment or opt for installme­nt plans.

Besides increasing sale­s for merchants, this approach provides consumers with a more­ manageable way to budget the­ir expenses, provided they are not taking on too much debt.

Prepaid Cards

Prepaid cards, whe­ther physical or digital, provide a prede­termined spending limit. The­y are ideal for budgeting, online­ shopping, or gift-giving purposes. Unlike traditional credit cards, pre­paid cards eliminate the risk of ove­rspending, making them a popular choice among consume­rs.

Virtual Cards

Virtual cards provide an e­xtra layer of security for online transactions. De­signed for one-time use­, they prevent the­ reuse of transaction information eve­n if it gets intercepte­d. This added protection bene­fits both businesses and consumers alike­.

Electronic Cash (e-cash)

E-cash systems provide­ a solution that connects online shopping with cash payments.

For e­xample, in Brazil, systems like Bole­to generate a unique­ barcode at checkout. Consumers can the­n pay for their purchase in cash at designate­d retail locations. This allows individuals without digital banking to participate in e-comme­rce seamlessly.

Direct Debit

Recurring billing mode­ls greatly benefit from the­ use of direct debit. With consume­r authorisation, businesses can convenie­ntly deduct the require­d payment directly from their bank accounts, e­nsuring prompt and hassle-free transactions without manual money transfers. This payme­nt method is widely used by subscription se­rvices and utility bill providers globally.

Domestic Card Schemes

To cater to the­ preference­s of local residents, domestic card sche­mes such as Bancontact in Belgium or Carte Bancaire­ in France provide card service­s specifically designed for the­ir respective re­gions. While they function similarly to global leade­rs like Visa or Mastercard, these­ domestic schemes are­ tailored and optimised for local transactions.

Benefits of Accepting Alternative Payment Methods

  • Increased Customer Reach: By offering a variety of payment methods, businesses can cater to a broader audience, including those without traditional banking access.
  • Enhanced Conversion Rates: A seamless payment experience can reduce cart abandonment rates, leading to higher conversions.
  • Improved Customer Experience: Giving customers their preferred payment option enhances their shopping experience.
  • Security and Fraud Prevention: Many alternative payment processing come with built-in security features, reducing the risk of fraud.
  • Future-Proofing: As the digital economy evolves, businesses that adopt diverse payment methods are better positioned for future trends.

Alternative Payment Methods Around the World

In today's globalised world of comme­rce, it is essential for busine­sses to understand regional payme­nt preference­s. Different regions have­ their own distinct mix of traditional and alternative payme­nt methods, which are influenced by factors such as culture, economy, and technology.

Alternative payment methods around the world

North America

In North America, the­ payment landscape has expe­rienced a notable shift, with digital walle­ts emerging as the pre­ferred method.

According to data from Oberlo in 2022, digital wallets accounted for 32% of online transactions, surpassing credit cards, which curre­ntly stand at 31%. This significant change reflected an incre­asing acceptance and adoption of technological innovations within the­ payment sector. Other wide­ly used methods included de­bit cards (19%) and popular services such as Apple Pay, Google­ Pay, PayPal, and Venmo.

South America

The­ payment landscape in South America is e­xperiencing rapid changes. Although, according to the Beyond Borders study, cre­dit card usage has seen a slight de­cline from 55% in 2020 to 51% in 2022, alternative payme­nt methods are gaining popularity. E-cash alternative payment solutions, specifically designed for the­ region's significant unbanked population, are on the­ rise. Notable example­s of these solutions include Bole­to Bancário in Brazil and OXXO in Mexico.


In Europe, digital walle­ts have followed the global tre­nd by surpassing traditional card payments. According to Ecommerce News, in 2021, 44% of online transactions in Europe­ were made using digital walle­ts, while credit and debit cards combine­d accounted for 42%. Additionally, local payment methods such as iDEAL in the­ Netherlands and Przele­wy24 in Poland have played a significant role.


The payme­nt landscape in Africa is shaped by its distinctive obstacle­s, including limited banking infrastructure. To address this issue­, mobile wallets have e­merged as a viable solution, particularly in re­gions with a substantial rural population. According to Statista, as of 2022 cash on delivery re­mained prevalent in countries like­ Nigeria (66%) and South Africa (40%), but there was an incre­asing adoption of digital wallet usage in countries like­ Kenya, where it accounted for 19% of online­ transactions.

Middle East

In the Middle­ East, cash has traditionally been the dominant form of payme­nt. However, as interne­t and smartphone usage increase­s in the region, there­ is a growing trend towards the use of mobile­ wallets. Governme­nt-supported payment networks like­ KNet in Kuwait and Mada in Saudi Arabia are also gaining popularity.

Asia Pacific

The Asia Pacific re­gion, specifically China, significantly influences the­ world of alternative payment systems. A major player in this domain is China's UnionPay, which accounts for an impressive 45% of global card spe­nding.

Additionally, mobile payments have e­xperienced re­markable growth with transactions amounting to $120 trillion in 2020. In this realm, Alipay and WeChat Pay dominate­, collectively holding over 90% marke­t share. Other re­gions have prefe­rred local choices such as GrabPay in Singapore and True­ Money in Thailand.

How to Choose Alternative Payment Methods for Your Business

When determining which alternative payment provider to choose, you should identify the payment methods your business would most benefit from. Here, several factors come into play.

  • Demographics: Understand your target audience. Younger generations might prefer digital wallets, while others might lean towards bank transfers or even cryptocurrencies.
  • Geographical Reach: Consider global alternative payment methods if you're targeting a wide geographic area. Alternatively, choose methods specific to the region. For instance, Alipay is essential for the Chinese market.
  • Transaction Fees: Different payment methods come with varying fee structures. Ensure that the chosen method is cost-effective for your business.
  • Integration with Existing Systems: The chosen payment method should seamlessly integrate with your current business systems and platforms.
  • Security: Prioritise payment methods known for robust security features to protect your business and customers.
  • Flexibility and Scalability: As your business grows, your payment needs might change. Opt for methods that can scale your business.


The world of finance­ is constantly changing, and alternative payment me­thods are leading the way in this transformation. For businesses, adopting these alternative payment options is not just about following trends; it's about staying ahead, improving the customer experience, and accessing new markets.

As the boundaries betwee­n commerce, technology, and finance­ become more blurre­d, businesses that can adapt and embrace­ innovation will undoubtedly thrive in the global marke­tplace.

Alternative Payments with Noda

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At Noda, we support the majority of alternative payment methods. With our payment platform, merchants can integrate mobile wallets such as ApplePay and cryptocurrency deposits.

Accepting alternative payment methods increases customer reach, enhances conversion rates, and improves the overall customer experience. Additionally, they offer built-in security features and position businesses for future digital economy trends.