What is an alternative payment method?

In short

An alternative payment method (APM) is any way of paying a merchant that does not run as a plain card payment on a global card scheme such as Visa or Mastercard. Alternative payment methods include bank transfers, direct debits, digital wallets, buy now, pay later, cash vouchers and stablecoins, each with its own rules on refunds, disputes and settlement.

Also called: APM, Alternative payment methods, Non-card payment method
Family: Payments and transfers
Facts checked: 13 October 2026

The main kinds of alternative payment method

The label says what a method is not, so the group is mixed. What its members share is a route that does not pass through a card scheme's authorisation and clearing, or that wraps a card in something else.

Bank transfers started from the checkout, often called pay by bank
Direct debits, where the merchant pulls the money under a mandate
Digital wallets that hold a balance or pass on a card
Buy now, pay later, where a lender pays the merchant
Cash vouchers and payments at a kiosk or a shop counter
Stablecoins and other crypto-assets

How an alternative payment method reaches a checkout

Each method has an operator: a bank scheme, a wallet company, a lender. A payment service provider connects to that operator, or to an aggregator holding many such connections, and shows the method on the payment page. Many methods send the buyer to a banking app or a wallet to approve, then return a result that may arrive seconds or days later.

The differences that matter come after the payment. Some methods cannot be charged back at all, some give the payer a refund right for weeks, and some settle in another currency or on another day than cards.

Why alternative payment methods matter to a gateway

In several countries a local method, not a card, is the buyer's first choice, so a checkout that offers only cards loses sales there. For the gateway, each method is a new integration, a new reconciliation file and a new set of refund and dispute rules to carry in the ledger.

Alternative or local payment method?

Local payment method: A method used mainly in one country or region. Most local payment methods are alternative ones, but a domestic card scheme is local without being alternative.
Digital wallet: One kind of alternative payment method. A wallet that only passes on a card, such as Apple Pay, still ends in a card payment.

Where an alternative payment method shows up in a platform

Modules that do the work

Platforms that need it

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