What is an Alternative Payment Method

23 Aug, 2022 . 4 minutes

What does APM stand for?

APM stands for Alternative Payment Methods and is used to describe payment methods outside of traditional methods of payment.

What is an APM?

AnAPM is a way of paying for goods and services that are not made through traditional credit or debit card schemes. This includes various methods such as mobile payments, e-wallets, bank transfers, cash-based vouchers, and Apple Pay or Google Pay.

Due to the rise of tech companies and financial institutions, the use of alternative payment methods has increased significantly. Alternative payment methods are expected to account for nearly 55% of all e-commerce transactions this year.

Introduction to APMs

How many alternative payment methods exist?

Although most people are familiar with PayPal as an alternative payment method, hundreds of other options are available, such as:


Apple Pay

Google Pay



What are the key APMs globally?

No single global payment method can be used across different countries. Each country has its own banking system, regulations, requirements, and payment methods. Payment habits can develop over time due to various factors such as technological changes, cultural differences, and political developments.

APMs in America

For instance, in the Americas, cards are the most commonly used payment method for online transactions. In 2019, GlobalData reported that cards – at 53% – were the most widely used payment method for online transactions in North America. Meanwhile, the 2019 Latin America Online Payment Methods report showed that more than 50% of consumers prefer to use a credit or debit card when making purchases online.

APMs in Europe

In Europe, cards are also the most commonly used payment method. According to a report released by Payments Europe in 2019, over half of the consumers on the continent prefer cards.

APMs in Africa

In Africa, mobile wallets are becoming more popular due to the lack of bank branches and large rural populations. Mobile wallets can be used for various transactions, including bank transfers and carrier billing.

APMs in Middle East

Cash has been the preferred payment method in the Middle East for a long time. However, cards are becoming more prevalent in several markets, such as Saudi Arabia, Bahrain, and Qatar.

APMs in China

One of China's most common payment methods is a domestic card scheme known as UnionPay. Mobile payments are also becoming more popular in the country with WeChat Pay and Alipay as the dominant players.

Why are APMs important?

In short, alternative payment methods give customers the convenience and choice they want. It allows people to pay in a way that suits them, so merchants must be able to offer a broad range of payment options at the checkout point. This allows merchants to gain an edge over their competitors, who may only provide traditional forms of payment.

It can also benefit companies seeking to enable seamless cross-border payments. While many countries will be well served by traditional credit cards, merchants may need to offer alternative payment methods to reach global customers, particularly those in emerging markets.

Alternative payment method benefits

Reducing cart abandonment with APMs

Making a purchase as effortless as possible ensures that the process is simple and convenient for customers. There are many reasons people do not complete a transaction, such as unexpected costs, having to create an account, or completing lengthy forms. However, with only one or two payment methods, most customers will still abandon their cart at the last moment if other options are unavailable.

With the average cart abandonment rate at almost 75%, merchants must do everything possible to prevent customers from leaving their site at any point.

One of the most important factors businesses consider when building their brand is creating a positive association with their customers. An APM helps them provide customers with convenient and quick payment methods. Additionally, an APM can help merchants secure their transactions. With better tokenization and encryption, they can be used both on the premises and online.

Other benefits of APMs

On top of reducing cart abandonment, biometric authentication makes APMs more secure than traditional payment methods, which usually rely on PINs and chip cards.

Reaching international markets with APMs

The rise of alternative payment methods has greatly impacted the payment landscape. In Germany, for instance, more than60% of shoppers prefer to use PayPal when making purchases online. In the Netherlands, iDEAL, a bank transfer service, has a 71% market share in the online payments industry.

According to a survey conducted by GlobalData in 2022, alternative payment methods have a combined market share of over66.5% in India. They have been gaining popularity among consumers, and their share has doubled over the past five years.

The rise of alternative payment methods is a major factor that has greatly impacted the payment landscape. New payment methods are being introduced every day, and they are becoming more secure and convenient. With an APM, consumers now have the freedom to pay with their preferred method.

What is the most popular alternative payment method?

Modern technology has made it easier for people to pay for their services and products using alternative payment methods such as digital wallets. These methods allow businesses to expand their reach and provide even more services to their customers.

A digital wallet allows people to make payments using their smartphones. It can be used to store various types of credit and debit cards, and loyalty and boarding passes. One of the most popular alternative payment methods is PayPal.

In 2021, PayPal processed over 19 billion payments, making it the world's most widely used payment processor. It has over 30 million merchants and 400 million active customers.

PayPal also allows users to send money through its service, a feature only available to a few online payment solutions. On top of that, users can make payments using their existing PayPal account or a credit or debit card. Money can then be sent to an email address, prompting users to sign up for a new account.

The number of people who use PayPal is also expected to grow. Between 2020 and 2025, the penetration of this payment method is expected to surpass that of people shopping online. This is because the number of people who use PayPal is expected to outstrip the number of people who shop online.

According to estimates by analysts, the number of people who use PayPal will continue growing. In 2020, it was around 8% of all digital buyers, and it will reach 9.1% by 2025.

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