Also called: APMs, Local payment methods, Local payments, Alternative payments
What alternative payment methods are
Alternative payment methods, or APMs, are payment options outside a standard credit or debit card checkout. The label covers several distinct methods, including digital wallets, pay-by-bank transfers, ACH debit, buy now, pay later (BNPL), vouchers, and cryptocurrency. A local payment method is an option popular or available in a particular country or region.
The label does not always mean the payment avoids card networks. A customer can tap a digital wallet that uses a stored card, so the transaction still runs over the card networks. Pay-by-bank moves money directly from a customer’s bank account to your business, while BNPL splits the customer’s purchase into installments.
APMs are a category, not one payment rail. A wallet, bank transfer, and installment plan have different costs and rules.
How APM payments work
The payment flow depends on the method. With a wallet, the customer approves payment on a phone or computer using saved payment details. With pay-by-bank, the customer selects a bank and authorizes a transfer. Some online bank payments redirect customers to their bank and then back to your checkout.
With BNPL, the customer chooses installments over several weeks or months. The BNPL provider pays you upfront and collects the installments from the customer. That changes who collects the debt, but it does not make the method interchangeable with a card payment for checkout, refunds, or reporting.
What APMs mean for your costs
There is no single APM fee or rate. Each method has its own pricing, and the available research does not establish standard fee amounts. Pay-by-bank avoids card-network processing for that payment, which can reduce card-related costs, but the payment provider may still charge a fee. A wallet funded by a credit card still follows the card payment flow.
Compare the fee for each method with the card costs it would replace, then weigh that against customer demand and checkout completion. For example, offering a payment method customers already use in a target market can help you serve them; adding a method with little customer demand adds integration and reconciliation work without a clear sales benefit.
Where APMs can go wrong
APMs do not share one set of settlement, refund, or dispute rules. Some methods do not use card chargebacks, while others have their own customer protections and dispute processes. Record the payment method and its transaction status so your staff can match orders, refunds, and deposits.
Redirect payments create a specific checkout risk: a customer can approve payment with a bank or wallet, then close the browser before returning to your site. Your order system needs to confirm the final payment status before treating the order as paid or shipping it.
Where APM charges show up
APM fees do not have a universal statement label. Look for the method name, transaction count, gross amount, fees, refunds, and net deposit in your payment reports or settlement records. Reconcile those totals separately from card sales, since a wallet funded by a card and a direct bank payment follow different payment flows.
What you can actually change
- Start with demand. Check where your customers live and which methods they already use. Add a small number of relevant options instead of filling checkout with unfamiliar choices.
- Compare the full cost. For each method, compare its fees, refunds, dispute rules, funding timing, and reconciliation work with the card payment it could replace. Do not assume a wallet avoids card fees.
- Test the order flow. Place test payments and confirm your system records approved, pending, failed, and refunded transactions correctly. Make sure an order is not treated as paid until the final status is confirmed.
Frequently asked questions
What counts as an alternative payment method?
The category includes digital wallets, pay-by-bank transfers, ACH debit, buy now, pay later, vouchers, and other payment options outside a standard card checkout. A digital wallet can still use a stored credit or debit card, so the category does not always mean the payment bypasses card networks.
Are alternative payment methods cheaper than credit cards?
Some methods, such as pay-by-bank, avoid card-network processing for that payment. That does not guarantee a lower total cost, because the payment provider may charge its own fee. Compare the actual fee and funding flow for each method against the card payment it would replace.
How do alternative payment method fees appear on a merchant statement?
There is no standard APM statement line. Look for method-specific fees and transaction totals in your payment reports or settlement records, then reconcile them against deposits. Keep wallet payments funded by cards separate from direct bank payments when comparing costs.
Should my business offer alternative payment methods?
Offer methods that match your customers’ preferences and the way they shop. Before adding one, compare its fees, refund and dispute process, settlement reporting, and technical requirements. A short list of relevant options is easier to manage than a checkout crowded with methods customers do not use.