The Role of APMs in Payment Orchestration

27 Mar, 2024 . 4 minutes

Alternative payment methods (APMs) are gaining traction as diverse and popular alternatives to conventional bank payments like credit or debit cards. These non-traditional payment solutions are reshaping the global payment landscape.

In the United States, a market traditionally dominated by card payments, there's a growing shift towards these alternative methods. A study by EY  reveals that over 85% of major US merchants are preparing to adopt new APMs within the next one to three years. This move towards APMs is driven by their rising prominence in North American e-commerce, where digital wallets have become the go-to payment method. This shift suggests that APMs could soon be central to the US payments ecosystem.

The eagerness to embrace APMs is not without reason. Around 73% of merchants acknowledge that not accepting APMs could negatively impact their sales. This indicates that businesses recognise the importance of diversifying their payment options to meet evolving consumer demands.

The Growth of APMs

Looking at the global market, the adoption of alternative payments is not just confined to the digital realm but is also expanding in physical stores. Forecasts predict that by 2027, the market for alternative payments will surpass $15 trillion, marking an impressive compound annual growth rate of 16.3% from 2017 to 2027.

In terms of market share, PayPal currently leads the pack, holding 59% of the overall alternative payment market as of 2023. It's followed by MyBank at 25% and Sofort by Klarna, which accounts for 3% of total collections via methods other than credit cards. 

Top Alternative Payment Methods 

There's no precise count of how many APMs exist globally. However, several key APMs are widely recognised and used across different markets. Here are some of the top alternative payment methods:

  1. Digital Wallets/E-Wallets: Digital wallets, like PayPal, Apple Pay, Google Pay, and Samsung Pay, store users' payment information for quick and easy transactions.

  2. BNPL: Buy now, pay later providers like Klarna, Afterpay, and Affirm allow consumers to purchase items and pay for instalments over time.

  3. Bank Transfers: Services like SEPA in Europe facilitate direct bank-to-bank transfers, often used for larger transactions.

Digital Wallets

A digital wallet, also known as an e-wallet, is a service that enables individuals and businesses to make electronic transactions. Users can deposit money in the digital wallet before any transactions, or an individual's bank account can be linked to the digital wallet. Users might also have their driver's licence, health insurance card, loyalty card(s), and other ID documents stored in the wallet. The wallet can usually be accessed through a smartphone app or the web.

Advantages and Disadvantages of Digital Wallets

  • Advantages:

    • Convenience: Streamlines the process of transactions, making them quicker and easier.

    • Security: Typically uses encryption and tokenisation to protect user information.

    • Rewards and Incentives: These are often associated with rewards, cashback offers, or other incentives.

  • Disadvantages:

    • Security Concerns: While secure, they can be vulnerable to hacking and other cybersecurity threats.

    • Dependency on Technology: Relies on smartphones and internet access.

    • Limited Acceptance: Not all merchants accept all types of digital wallets.


BNPL is a financing option that allows consumers to buy products and pay for them over time in instalments. This service is often offered at the point of sale, with the promise of low or no interest fees, subject to the user's creditworthiness.

How Does BNPL Work?

When a customer opts for BNPL, they usually pay a portion of the cost upfront (often nothing) and the rest over an agreed period. The payment terms and schedules can vary depending on the provider. The remaining amount is paid in subsequent instalments, which can be weekly, fortnightly, or monthly.

Is BNPL a Loan?

Yes, BNPL is a type of loan. While it might not always feel like a traditional loan, it involves borrowing money to be repaid over time, often with added terms and conditions and sometimes interest or fees, depending on the provider and the agreement terms.

Domestic Payment Schemes

A domestic payment is a financial transaction that occurs within the same country. This can include bank transfers, check payments, card transactions, and direct debits, all processed within the same national financial system. Domestic payments typically have lower fees and shorter processing times than international transactions. They are governed by local financial regulations and systems and are a crucial part of a country's economic activity.

Advantages of Alternative Payment Methods

  1. Convenience: They offer quick, streamlined transactions, especially in online and mobile environments.

  2. Wider Accessibility: Beneficial for individuals without traditional bank accounts or credit cards.

  3. Enhanced Security: Often provides robust security features, reducing the risk of fraud.

  4. Cost-Effectiveness: This can be cheaper than traditional payment methods due to lower transaction fees.

  5. Global Transactions: Facilitate easier international purchases and transfers.

  6. Customer Preferences: Cater to the diverse payment preferences of a global customer base.

Global Alternative Payment Methods

Global alternative payment methods and services like Apple Pay, Klarna, PayPal, and Google Pay stand out for their innovative approaches and widespread adoption. Apple Pay, with its seamless integration into iOS devices, offers a highly secure and convenient contactless payment experience, making it a popular choice among iPhone users. Klarna, originating from Sweden, has revolutionised online shopping with flexible payment solutions, including "pay later" and instalment options, catering to a modern consumer base seeking financial flexibility. 

PayPal, a pioneer in digital payments, continues to dominate the online payment landscape with its user-friendly interface and robust security, facilitating transactions in numerous countries and currencies. Google Pay, similar to Apple Pay but for Android users, provides a streamlined and secure method for in-app, online, and in-store purchases, leveraging Google's vast ecosystem.

There are also region-specific, such as Alipay and WeChat Pay in China, UPI in India, Boleto Bancário in Brazil, and SEPA transfers in Europe. Their popularity depends on regional consumer habits, regulatory environments, and technological infrastructure.

Payment Gateway (APM) Integration

This involves incorporating alternative payment methods into a business's payment gateway. It's crucial for businesses looking to expand their market reach or cater to specific customer preferences. The process typically involves working with payment gateway providers or using APIs to integrate APMs into existing systems.

The integration cost varies depending on factors like the chosen payment methods, the complexity of integration, and the payment service provider. Some APMs may have higher initial setup costs but offer lower transaction fees. In comparison, others might be cheaper to integrate but incur higher ongoing costs. Businesses should weigh these factors against their specific needs and customer base.

Alternative Payment Method Trends

Several key trends are reshaping how businesses and consumers transact. At the forefront is the rise of mobile payments. This trend highlights the growing preference for using mobile devices, like smartphones or tablets, to make transactions.

Simultaneously, businesses are increasingly accepting cryptocurrencies. This trend is not limited to niche markets but is expanding into mainstream commerce, reflecting a broader openness to this digital, decentralised form of money. Cryptocurrencies are being embraced for their potential to facilitate quick, secure, and borderless transactions.

Another prominent trend is the growth of BNPL schemes. Particularly evident in the e-commerce sector, BNPL offers a flexible payment option that allows consumers to purchase goods immediately and pay for them over time. This method has gained popularity due to its user-friendly approach to financing, aligning well with the modern consumer's desire for convenience and immediacy.

Region-specific payment preferences are also critical to the APM landscape. Businesses are tailoring their payment options to align with different regions' unique preferences and regulatory frameworks. This approach caters to local consumer habits and navigates the diverse regulatory environments across global markets.

A continuous focus on enhancing security measures is pivotal in the APM space. As alternative payment methods are popular, the need for robust security protocols to protect against fraud and cyber-threats becomes increasingly important. This commitment to security builds consumer trust and ensures the stability and sustainability of these emerging payment methods.

APEXX's Alternative Payment Method Solutions

At APEXX, we specialise in various APMs and focus on enhancing business sales conversions. Our gateway supports over 120 payment methods tailored to meet diverse global customer preferences. We understand the value of offering familiar payment options to consumers, which is essential in today's diverse payment landscape. Our solutions are designed to be versatile, ensuring instant access to a range of payment methods and aligning with consumers' evolving habits worldwide. For more detailed information, please visit our APM page.

Sign up for the newsletter

By submitting this form, you acknowledge that you have reviewed the terms of our Privacy Statement and consent to the use of data in accordance therewith.

The APEXX Payment Orchestration Platform is the last integration you will ever need

Lowest cost
We structure ourselves to operate in the most efficient way. We are not an additional cost as we take the place of the payment gateway.
Lead in Orchestration
We enhance the payment experience by driving up acceptance rates thereby reducing friction and lost sales for our Merchants.
Excellent Customer Support
The APEXX Payment Orchestration Platform is architected to the highest industry standards of security and support ensuring that our merchants have the best protection and support access at all times.