Alternative Payment Methods

Beyond Credit Cards & ACH

Expand Your Payment Options to Reach More Customers

Give your customers the payment flexibility they demand. Coastal Pay supports alternative payment methods that go beyond traditional credit cards and bank transfers—including digital wallets, buy now pay later, cryptocurrency, international payment methods, and emerging payment technologies that increase conversions and reduce cart abandonment.

Popular Alternative Payment Methods:

Digital Wallets (Apple Pay, Google Pay, PayPal)
Buy Now Pay Later (Affirm, Afterpay, Klarna)
Cryptocurrency Payments (Bitcoin, Ethereum, Stablecoins)
QR Code Payments & Contactless
International Payment Methods (Alipay, WeChat Pay, iDEAL)
Bank Transfers & Real-Time Payments

What Are Alternative Payment Methods?

Alternative payment methods (APMs) are any payment options beyond traditional credit and debit cards. These include digital wallets, mobile payments, bank transfers, buy now pay later services, cryptocurrency, and region-specific payment methods. As consumer preferences evolve and global commerce expands, alternative payment methods have become essential for businesses that want to maximize conversions, reach international customers, and meet diverse payment preferences.

Why alternative payment methods matter:

Consumer preference: 55% of online shoppers prefer non-card payment options
Higher conversion: Offering preferred payment methods increases checkout conversion by 20-30%
International reach: Many countries prefer local payment methods over cards
Younger demographics: Gen Z and Millennials gravitate toward digital wallets and BNPL
Fraud reduction: Some APMs offer lower fraud rates than traditional cards
Lower costs: Certain APMs can reduce processing fees

Growth trends:

Digital wallet transactions expected to exceed $10 trillion globally by 2025
Buy now pay later growing 39% year-over-year
Cryptocurrency payment adoption increasing in B2B and high-value transactions
Real-time payment networks expanding across Europe, Asia, and North America

Digital Wallet Payment Processing

Mobile Wallet Payments

Accept payments from the most popular mobile wallets with seamless, secure, one-tap checkout experiences.

Apple Pay

Apple’s mobile payment and digital wallet service for iOS devices, Apple Watch, Mac, and Safari browser

How it works:

Customer adds credit/debit cards to Apple Wallet
At checkout, customer selects Apple Pay
Authenticates with Face ID, Touch ID, or passcode
Payment processes instantly with tokenized card data
Works in-app, on websites, and in-person (contactless)

Benefits for merchants:

Faster checkout (30% higher conversion on average)
Lower cart abandonment
Reduced fraud (tokenization + biometric auth)
No need to enter card details
Built-in customer authentication

Customer demographics:

iPhone users (40% of U.S. smartphone market)
Higher household income on average
Tech-savvy, convenience-focused shoppers
Strong adoption in urban areas

Processing fees:

Standard card processing rates apply
No additional fees from Apple for online/app transactions
In-person contactless same as regular card swipe

Google Pay

Google’s digital wallet for Android devices, Wear OS smartwatches, and supported web browsers

How it works:

Customer stores cards in Google Pay app
Select Google Pay at checkout
Authenticate with fingerprint, face unlock, or PIN
Tokenized payment data sent for processing
Available on Android apps, websites, and in-store

Benefits for merchants:

Reach Android users (60% of global smartphone market)
Streamlined checkout flow
Strong security with tokenization
Cross-device compatibility
Integration with Google ecosystem

Customer demographics:

Android smartphone users
Global reach (especially strong outside U.S.)
Price-conscious shoppers
Tech-comfortable consumers

Processing fees:

Standard card processing rates
No additional fees from Google
Same cost structure as regular card transactions

PayPal & Venmo

The most widely adopted digital payment platforms in the United States and internationally.

PayPal:

435+ million active accounts globally
Customer pays from PayPal balance, linked bank, or card
Trusted brand with buyer protection
One-click checkout for logged-in users
International transactions in 200+ markets

Venmo (PayPal-owned):

Popular with younger demographics (18-34)
Social payment experience
Growing in e-commerce adoption
Mobile-first design
Split payment functionality

Benefits for merchants:

Massive installed user base
Higher trust factor (recognized brand)
Reduced data entry (users already have accounts)
Buyer and seller protection programs
Multi-currency support

Processing considerations:

Higher rates than direct card processing (typically 2.9% + $0.30 to 3.49% + $0.49)
Funds held in PayPal initially (transfer to bank account required)
Potential for account holds or limitations
Chargeback protection programs available

Best for:

E-commerce businesses
Marketplaces and platforms
International sales
Businesses targeting millennials/Gen Z (Venmo)

Samsung Pay

Samsung’s mobile payment solution for Samsung Galaxy devices.

Unique feature: MST (Magnetic Secure Transmission)

Works with older non-NFC terminals
Emulates traditional magnetic stripe card
Broader compatibility than Apple Pay/Google Pay
NFC support for modern terminals

Benefits:

Works at nearly any payment terminal
Strong presence in Asian markets
Samsung’s large global device footprint
Rewards program for customers

Processing fees:

Standard card processing rates
No additional fees from Samsung

Digital Wallet Integration

In-App Integration

Native SDK integration for iOS and Android applications:

Apple Pay SDK for iOS apps
Google Pay API for Android apps
Samsung Pay SDK
PayPal/Venmo mobile SDK

Website Integration

Web-based digital wallet acceptance:

Apple Pay on the Web (Safari)
Google Pay for web
PayPal Checkout buttons
Venmo web integration

In-Person Integration

Contactless NFC terminal acceptance:

EMV contactless readers
Mobile wallet tap-to-pay
Wearable payment device support
Dual-interface terminals (chip + contactless)

Implementation requirements:

HTTPS/SSL certificate required
Domain verification (for Apple Pay)
Merchant validation
Proper button placement and branding
Compliance with brand guidelines

Buy Now Pay Later (BNPL) Solutions

What is Buy Now Pay Later?

Buy now pay later services allow customers to split purchases into installment payments, typically with no interest if paid on time. BNPL has exploded in popularity, particularly among younger consumers, as an alternative to credit cards.

How BNPL works:

Customer selects BNPL option at checkout
BNPL provider performs instant credit check (soft inquiry)
Customer approved for payment plan in seconds
Merchant receives full payment upfront (minus fees)
Customer pays BNPL provider in installments
BNPL provider assumes credit risk

Key benefits for merchants:

Increase average order value by 30-50%
Improve conversion rates by 20-30%
Reduce cart abandonment
No credit risk (merchant paid in full immediately)
Attract younger, credit-averse shoppers
Competitive advantage over card-only competitors

Key benefits for customers:

No interest if paid on time
No hard credit check (doesn’t impact credit score)
Easier approval than credit cards
Budget-friendly installments
Flexible payment schedules
Transparent fee structure

Major BNPL Providers

Affirm

Leading BNPL provider focusing on transparency and longer-term financing.

Key features:

Loan amounts: $50 to $17,500+
Payment terms: 3, 6, 12, 18, 24, 36 months
APR: 0% to 36% (disclosed upfront)
No late fees or hidden charges
Reports to credit bureaus (builds credit)

Best for:

Higher-ticket items ($500+)
Electronics, furniture, home goods
Travel and experiences
B2C businesses with larger transactions

Merchant fees:

2-8% per transaction (varies by terms)
Higher fees for longer payment terms
No monthly or setup fees

Afterpay

Popular BNPL focused on fashion, beauty, and retail with younger demographics.

Key features:

Fixed 4 installments (pay every 2 weeks)
0% interest always
Late fees apply if payment missed
Maximum purchase limits ($1,500-2,000 typically)
Instant approval in seconds

Best for:

Fashion and apparel
Beauty and cosmetics
Retail and lifestyle products
Younger demographics (18-35)

Customer demographics:

80% of users are under 40
Female-dominant user base
Average household income $50-75K
Impulsive, trend-conscious shoppers

Merchant fees:

80% of users are under 40
Female-dominant user base
Average household income $50-75K
Impulsive, trend-conscious shoppers

Klarna

European-based BNPL with strong international presence and multiple payment options.

Key features:

Pay in 4 installments (interest-free)
Pay in 30 days (extended due date)
Financing options (6-36 months)
One-time card numbers for in-store use
Strong presence in Europe and growing in U.S.

Payment options:

Level 2 data minimum (tax, customer code)
Level 3 for large purchases ($5,000+)
Clear merchant descriptor for expense categorization
Itemized receipts for reconciliation

Best for:

International businesses
Fashion and retail
Home goods and furniture
European market expansion

Merchant fees:

3.29% + $0.30 per transaction (pay in 4)
5.99% + $0.30 (financing options)
No monthly fees

PayPal Pay in 4 / PayPal Credit

PayPal’s integrated BNPL solution leveraging existing user base.

Pay in 4:

Split purchases into 4 interest-free payments
$30 to $1,500 purchase range
Payment every 2 weeks
Integrated with PayPal checkout

PayPal Credit:

Revolving credit line
6 months no interest on purchases $99+
Standard APR after promotional period
Instant approval for existing PayPal users

Benefits:

Massive existing user base
Seamless integration with PayPal checkout
No separate integration needed
Familiar brand trust

Merchant fees:

Standard PayPal rates apply (2.9% + $0.30 to 3.49% + $0.49)
No additional BNPL fees

Sezzle

Smaller BNPL provider with competitive rates for merchants.

Key features:

4 interest-free installments
Pay every 2 weeks
Lower merchant fees than competitors
Focus on small to medium businesses

Best for:

Budget-conscious merchants
Smaller average order values
Fashion, beauty, wellness brands

Merchant fees:

2–6% per transaction (lower than most)
No setup or monthly fees

BNPL Integration & Best Practices

Integration methods:

Pre-built e-commerce plugins (Shopify, WooCommerce, Magento)
API integration for custom platforms
Hosted checkout redirect
JavaScript SDK for embedded experience

Conversion optimization:

Display BNPL options prominently at checkout
Show installment amounts on product pages
Use provider logos (brand recognition)
Include messaging: “or 4 interest-free payments of $25”
A/B test placement and messaging

Customer communication:

Educate customers on how BNPL works
Clarify terms and potential fees
Explain approval process
Highlight no credit impact for soft checks

Risk management:

Educate customers on how BNPL works
Clarify terms and potential fees
Explain approval process
Highlight no credit impact for soft checks

Cryptocurrency Payment Processing

Why Accept Cryptocurrency?

Digital currency payments offer unique benefits for specific business models and customer segments.

Benefits for merchants:

Lower processing fees (typically 1% vs 2.5–3.5% for cards)
Irreversible transactions (no chargebacks)
Faster settlement (same-day or instant)
Global reach (no currency conversion needed)
Access to crypto-native customer segment
Hedge against currency fluctuation (if held)

Benefits for customers:

Privacy (no personal information shared)
Lower fees for international transactions
Use crypto holdings for purchases
Fast transaction confirmation
Decentralized payment option

Common use cases:

High-value B2B transactions
International payments
Digital goods and services
Tech-savvy customer base
Remittances and cross-border payments
Customers with significant crypto holdings

Popular Cryptocurrencies for Payments

Bitcoin (BTC)

The original and most recognized cryptocurrency.

Characteristics:

Highest brand recognition and acceptance
Most liquid (easy to convert to fiat)
Slower transaction times (10+ minutes)
Higher transaction fees during network congestion
Best for larger transactions ($500+)

Merchant considerations:

Most requested by crypto customers
Volatile price movements
Convert to fiat immediately to avoid volatility risk
Use Lightning Network for faster, cheaper transactions

Ethereum (ETH)

Second-largest cryptocurrency with smart contract capabilities.

Characteristics:

Faster transactions than Bitcoin (seconds to minutes)
Variable gas fees (can be expensive during high usage)
Large developer and DeFi ecosystem
Supports programmable payments

Use cases:

Smart contract-based transactions
NFT purchases
DeFi integrations
Programmable payment logic

Stablecoins (USDC, USDT, DAI)

Cryptocurrencies pegged to stable assets like the U.S. dollar.

Characteristics:

Price stability (1 stablecoin ≈ $1 USD)
Fast transactions
Low volatility risk
Ideal for everyday payments

Benefits for merchants:

Price stability (1 stablecoin ≈ $1 USD)
Fast transactions
Low volatility risk
Ideal for everyday payments

Popular stablecoins:

USDC: Circle-issued, regulated, fully backed
USDT (Tether): Most liquid stablecoin globally
DAI: Decentralized, algorithmic stablecoin

Litecoin (LTC) & Bitcoin Cash (BCH)

Bitcoin alternatives designed for payments.

Characteristics:

Faster transaction times than Bitcoin
Lower transaction fees
Less brand recognition than BTC/ETH
Payment-focused design

Best for:

Smaller transactions
Customers seeking Bitcoin alternatives
Cost-conscious crypto payments

Cryptocurrency Payment Processing Solutions

Crypto Payment Processors

Third-party services that handle crypto payments and convert to fiat.

How they work:

Customer selects crypto payment option
Payment processor generates crypto address/invoice
Customer sends crypto from their wallet
Processor confirms transaction on blockchain
Processor converts crypto to fiat (if desired)
Merchant receives fiat deposit in bank account

Popular processors:

BitPay: Largest crypto payment processor
Coinbase Commerce: Integrated with Coinbase exchange
CoinGate: European-focused, multi-crypto support
NOWPayments: Wide crypto selection, low fees

Processor benefits:

Handle crypto complexity for you
Instant fiat conversion (avoid volatility)
Multi-cryptocurrency support
Compliance and tax reporting
Familiar checkout experience

Typical fees

1% per transaction (vs 2.5–3.5% for cards)
Optional currency conversion fee (0.5–1%)
Withdrawal fees to bank account

Direct Wallet Integration

Accept crypto payments directly to your business wallet.

How it works:

Generate crypto receiving address
Customer sends payment to address
Monitor blockchain for confirmation
Manually fulfill order after confirmation

Benefits:

No processor fees (only network fees)
Complete control over funds
Privacy and decentralization
Keep crypto holdings if desired

Challenges:

Manual order reconciliation
Need crypto wallet management expertise
Handle volatility risk yourself
Tax and accounting complexity
No automatic fiat conversion

Best for:

Crypto-native businesses
Those wanting to hold crypto
High-volume, low-margin businesses
Businesses with crypto expertise

Lightning Network (Bitcoin Layer 2)

Faster, cheaper Bitcoin transactions for smaller amounts.

How it works:

Off-chain transaction layer on top of Bitcoin
Instant transactions (seconds)
Minimal fees (fractions of a cent)
Settles periodically to main Bitcoin blockchain

Benefits:

Perfect for small transactions ($1–100)
Near-instant confirmation
Extremely low fees
Scales better than main Bitcoin network

Use cases:

Microtransactions
Point-of-sale payments
Subscription billing in Bitcoin
Cross-border remittances

Cryptocurrency Payment Implementation

Integration methods:

Payment processor plugins (Shopify, WooCommerce)
API integration with crypto processors
Direct wallet address generation
Lightning Network payment requests (LNURL)
QR code payment displays

Best practices:

Price in fiat, accept crypto (avoid crypto volatility)
Convert to fiat immediately unless intentionally holding
Set appropriate transaction confirmations (1–6 depending on amount)
Educate customers on transaction times
Display supported cryptocurrencies clearly
Show real-time exchange rates

Compliance & tax:

Cryptocurrency treated as property by IRS
Must report capital gains/losses
Maintain detailed transaction records
Issue proper tax forms (1099-B for some transactions)
Consider crypto accounting software
Consult tax professional for crypto-specific guidance

Risk management:

Monitor blockchain confirmations
Be aware of double-spend attacks (rare with confirmations)
Understand exchange rate volatility
Secure wallet storage (cold storage for large amounts)
Backup wallet keys and recovery phrases
Consider insurance for crypto holdings

QR Code & Contactless Payments

QR Code Payment Processing

Mobile-friendly payments via scannable QR codes—popular globally and growing in the U.S.

How QR code payments work:

Merchant generates QR code (static or dynamic)
Customer scans code with smartphone camera or payment app
Payment details pre-populate or customer enters amount
Customer confirms payment
Transaction processes instantly
Digital receipt delivered

QR code types:

Static QR Codes

Fixed payment destination
Customer enters amount (or fixed amount)
Reusable across multiple transactions
Print on invoices, signs, stickers
Good for tips, donations, fixed prices

Dynamic QR Codes

Unique code per transaction
Pre-set amount and order details
Single-use for security
Expire after time period
Track individual transactions

Use cases for QR code payments:

Restaurants & Hospitality

Table-side ordering and payment
No need to handle cards or cash
Split checks easily
Tip addition
Contactless and hygienic

Retail & Point of Sale

Faster checkout lines
No card reader needed
Works with any smartphone
Backup if terminal fails
Outdoor/mobile selling

Invoicing & Billing

Print QR code on paper invoices
Email invoices with embedded QR
Instant payment collection
Track invoice payment status
Reduce payment friction

Events & Ticketing

Festival and event payments
Parking and transit
Admission and ticket sales
Merchandise sales
Concessions

Donations & Tips

Nonprofit fundraising
Street performer tips
Service gratuity collection
Easy giving at any amount
No cash handling

QR payment platforms:

Venmo & PayPal QR Codes

Popular in U.S. market
Large existing user base
Social payment features
In-app QR scanner

Square & Clover QR

Integrated with POS systems
Track inventory and orders
Customer loyalty integration
Employee management

Alipay & WeChat Pay QR

Dominant in Chinese market
Essential for Chinese tourists
Cross-border payment support
Large Asian diaspora user base

Generic Payment QR Codes

Platform-agnostic codes
Link to hosted payment page
Supports multiple payment methods
Custom branding and experience

Benefits of QR code payments:

No hardware required: Works with smartphone cameras
Contactless: Hygienic, no physical touch
Universal: Any phone with camera works
Fast setup: Generate and display codes instantly
Low cost: Minimal processing infrastructure needed
Flexible: One code or unique per transaction
Mobile-first: Optimized for smartphone users

Implementation:

Generate QR codes via payment gateway
Display on digital screens, print materials, or both
Ensure adequate lighting for scanning
Test with multiple devices and apps
Provide instructions for first-time users
Monitor usage and optimize placement

Contactless & NFC Payments

Tap-to-pay technology using Near Field Communication (NFC) for fast, secure transactions.

What is NFC payment?

Short-range wireless technology that enables devices to communicate when within 4 inches of each other. Used for contactless card payments, mobile wallets, and wearable payment devices.

How contactless payments work:

Customer taps card, phone, or wearable on terminal
Device and terminal communicate via NFC
Tokenized payment data transmitted
Transaction authorizes in seconds
Confirmation displayed/vibrated
No signature needed (typically under $50)

Contactless payment types:

Contactless Cards

EMV chip cards with NFC antenna
“Tap to pay” logo on card
Works at any NFC-enabled terminal
Faster than chip insertion
Same security as chip transactions

Mobile Wallets (NFC)

Apple Pay, Google Pay, Samsung Pay
Tokenization for security
Biometric authentication
Works with NFC terminals
Can store multiple cards

Wearable Payments

Smartwatches (Apple Watch, Wear OS)
Payment rings and wristbands
Fitness tracker payment features
Convenient for active lifestyles
No phone needed

Benefits of contactless payments:

For merchants:

Faster checkout (30–50% faster than chip)
Reduced line congestion
Lower hardware costs (dual-purpose terminals)
Enhanced security (tokenization)
Hygiene appeal (no touching)
Modern customer experience

For customers:

Speed and convenience
No PIN required for small amounts
Keep card in wallet/phone
Secure (tokenization + biometrics)
Works globally
No physical wear on cards

Adoption drivers:

COVID-19 accelerated contactless adoption
Younger consumers expect contactless options
Public transit increasing contactless acceptance
Global contactless usage growing 40%+ annually
Card issuers converting to contactless cards

Equipment requirements:

NFC-enabled payment terminal
EMV certification for contactless
Support for multiple wallet types
Clear contactless logo display
Placement at optimal tap height

International Payment Methods

Regional Payment Methods by Market

Europe

iDEAL (Netherlands)

Direct bank transfer system
60%+ of Dutch online transactions
Real-time bank-to-bank transfer
No chargebacks (payment guaranteed)
Essential for Dutch market

SEPA Direct Debit (EU-wide)

Bank account debits across 36 countries
Recurring payment capability
Lower fees than cards
14-day chargeback window
B2B and B2C versions

Sofort/Klarna (Germany, Austria)

Real-time bank transfer
Instant payment confirmation
No account creation needed
Strong in German-speaking markets

Giropay (Germany)

Bank-based payment method
Direct connection to German banks
Secure online banking authentication
Popular for e-commerce

Bancontact (Belgium)

Dominant payment method in Belgium
Card and online payment support
Mobile app integration
Essential for Belgian market

Asia-Pacific

Alipay (China)

Over 1 billion users globally
Digital wallet and payment platform
QR code and app-based payments
Essential for Chinese customers
International tourist payment

WeChat Pay (China)

800+ million active users
Integrated with WeChat messaging app
QR code payments
Mini-programs for e-commerce
Social and payment combined

UnionPay (China)

Chinese bank card network
9+ billion cards issued
Global acceptance growing
Debit and credit cards
Essential for Chinese market

GrabPay (Southeast Asia)

Super-app payment wallet
Dominant in Singapore, Malaysia, Philippines
Ride-hailing, food, payments combined
Regional market leader

PayNow (Singapore)

Real-time bank transfer
Mobile number or ID-based
Instant payments
Government-backed system

PromptPay (Thailand)

Real-time payment system
Mobile-based transfers
Free person-to-person payments
Growing e-commerce adoption

Latin America

PIX (Brazil)

Instant payment system
Launched 2020, massive adoption
Real-time 24/7 transfers
Free for individuals
QR code and key-based

Mercado Pago (Latin America)

Leading digital wallet
Strong in Argentina, Brazil, Mexico
E-commerce and POS payments
Installment payment options

OXXO (Mexico)

Cash payment at convenience stores
Essential for unbanked population
Generate payment code online
Pay in-person at store
Receipt confirms payment

Boleto Bancário (Brazil)

Payment voucher system
Print or receive via email
Pay at bank, online, or convenience store
Popular for unbanked consumers

Middle East & Africa

M-Pesa (Kenya, East Africa)

Mobile money transfer service
Text message-based payments
Financial inclusion for unbanked
Dominant in East African markets

Fawry (Egypt)

Payment aggregator
Online and offline payments
Cash collection network
Essential for Egyptian e-commerce

Why Offer International Payment Methods?

Market access:

Many countries have low credit card penetration
Local payment methods preferred/required
Build trust with local payment options
Competitive requirement in some markets

Conversion improvement:

30–50% higher conversion with local methods
Reduce cart abandonment
Meet customer expectations
Remove payment friction

Cost optimization:

30–50% higher conversion with local methods
Reduce cart abandonment
Meet customer expectations
Remove payment friction

Risk reduction:

Lower fraud rates for local methods
Guaranteed payments (some methods)
Better authentication
Regulatory compliance

International Payment Integration

Integration approaches:

Payment Service Providers (PSPs)

Global payment platforms that aggregate multiple local payment methods:

Adyen: 250+ payment methods globally
Stripe: 40+ countries, many local methods
WorldPay: Enterprise-grade global payments
2Checkout (Verifone): Digital goods focus

Benefits:

Single integration, multiple methods
Handles local compliance
Multi-currency support
Unified reporting
Local acquiring

Regional specialists:

Asia-Pacific: Asiabill, Oceanpayment
Europe: Mollie, MultiSafepay
Latin America: EBANX, dLocal
Middle East: PayTabs, Telr

Implementation considerations:

Currency handling:

Dynamic currency conversion
Multi-currency pricing
Local currency settlement
Exchange rate management
Transparent fee disclosure

Compliance:

Local payment regulations
Tax and VAT requirements
Data localization rules
Consumer protection laws
AML/KYC requirements

User experience:

Auto-detect customer location
Display relevant payment methods
Show local currency prices
Localized checkout language
Cultural payment preferences

Technical requirements:

Local payment method support
Currency conversion APIs
Multi-language interfaces
Regional fraud detection
Local bank integrations

Real-Time Payment Networks

What Are Real-Time Payments?

Payment networks that settle funds immediately (within seconds) rather than batch processing over days.

Characteristics:

Instant or near-instant settlement
24/7/365 availability
Irrevocable payments (no reversal)
Includes remittance information
Lower costs than wire transfers

Benefits over traditional methods:

vs. ACH:

Instant instead of 3–4 days
Available 24/7 (vs. business days only)
Immediate confirmation
Real-time payment tracking

vs. Wire Transfers:

Much lower cost ($0–2 vs $15–45)
Same-day settlement
Simpler process
Better for smaller amounts

vs. Credit Cards:

Lower processing fees
No chargebacks
Direct bank-to-bank
Better for large amounts

Global Real-Time Payment Networks

FedNow (United States)

Federal Reserve’s real-time payment system launched July 2023.

Features:

Instant payment settlement (seconds)
24/7/365 availability
Direct bank-to-bank transfer
Payment with remittance data
No transaction limit

Use cases:

Urgent bill payments
Payroll (same-day pay)
Insurance claim disbursements
Emergency funds
Gig economy payments

Adoption timeline:

Gradual bank participation
Growing merchant acceptance
Expected mass adoption 2024–2026

RTP Network (United States)

The Clearing House’s Real-Time Payments network (since 2017).

Features:

Real-time payment clearing
Immediate funds availability
Request for Payment feature
Rich remittance data
Payment confirmation

Participating banks:

Major U.S. banks already connected
Covers 65%+ of U.S. demand deposit accounts
Growing adoption among smaller banks

Faster Payments Service (United Kingdom)

UK’s real-time payment system since 2008.

Features:

Payments clear in seconds
Maximum £1 million per transaction
Available 24/7
Widespread adoption (all major banks)

Usage:

Used for 3+ billion transactions annually
Standard for UK online payments
Mobile banking integration
Bill payment and P2P transfers

SEPA Instant (Europe)

European instant payment scheme across 36 countries.

Features:

Settlement in 10 seconds
Available 24/7
€100,000 transaction limit
Pan-European reach
Growing adoption

UPI (Unified Payments Interface - India)

European instant payment scheme across 36 countries.

Features:

Real-time bank transfers
Mobile-first design
QR code payments
Zero transaction fees for consumers
Simple mobile number/ID addressing

Scale:

10+ billion transactions monthly
350+ million users
Dominant digital payment method in India
Model for other countries

PIX (Brazil)

Brazil’s instant payment system launched 2020.

Features:

Real-time 24/7 transfers
QR code payments
Free for individuals
Simple key-based addressing (phone, email, CPF)

Adoption:

140+ million users in 3 years
Majority of Brazilian adults use it
Replacing cash and cards rapidly
Model for Latin American countries

Real-Time Payment Use Cases

B2C payments:

Instant refunds
Same-day payroll
Gig economy worker payments
Insurance claim payouts
Customer rebates and rewards

B2B payments:

Supplier payments with instant confirmation
Just-in-time inventory payments
Emergency vendor payments
Freight and logistics payments
Professional services payments

Consumer use:

Bill payments with instant posting
Person-to-person transfers
Rent and mortgage payments
Split bills and group payments
Emergency fund transfers

Benefits for businesses:

Improve cash flow (immediate access)
Reduce payment delays
Lower processing costs
24/7 payment capability
Better customer experience

Alternative Payment Methods Integration

Choosing the Right Payment Methods

Factors to consider:

Customer demographics:

Age (Gen Z prefers digital wallets/BNPL)
Income level (affects card vs. alternative preferences)
Tech-savviness
Geographic location

Business type:

E-commerce vs. in-person
Subscription vs. one-time
Ticket size (BNPL for higher amounts)
International vs. domestic

Geographic markets:

Local payment method preferences
Credit card penetration rates
Mobile payment adoption
Regulatory environment

Transaction characteristics:

Average order value
Purchase frequency
Fraud risk level
Refund/return rates

Payment method selection framework:

Essential baseline:

Credit/debit cards (Visa, Mastercard, Amex, Discover)
ACH/bank transfers (for larger amounts)

High-impact additions:

Digital wallets (Apple Pay, Google Pay) – 15-30% conversion lift
PayPal – trusted brand, large user base
Buy now pay later (if AOV >$100) – 30-50% AOV increase

Geographic expansion:

Local payment methods for target markets
Multi-currency support
Regional digital wallets

Niche/specialized:

Cryptocurrency (tech-savvy, high-value, international)
Real-time payments (B2B, urgent payments)
Cash alternatives (unbanked segments)

Payment method selection framework:

High Priority (implement first):

Major credit/debit cards
ACH/bank transfers
Apple Pay & Google Pay
PayPal
Buy now pay later (if AOV >$100)

Medium Priority (implement for growth):

International payment methods (if selling abroad)
Additional digital wallets (Venmo, Samsung Pay)
Real-time payments (B2B focus)
QR code payments (if mobile-heavy or international)

Low Priority (niche use cases):

Cryptocurrency (if tech audience or high-value)
Regional payment methods (if expanding to specific countries)
Cash alternatives (if targeting unbanked)

Technical Integration Approaches

Payment orchestration platforms:

Unified API to access multiple payment methods through single integration.

How they work:

One integration connects to many payment methods
Smart routing to optimal payment method
Automatic failover if one method fails
Unified reporting across all methods
Simplified PCI compliance

Popular platforms:

Stripe (40+ payment methods)
Adyen (250+ payment methods)
Checkout.com (150+ payment methods)
Braintree (PayPal-owned, multiple methods)

Benefits:

Faster time to market
Single technical integration
Easier to add new methods
Unified reconciliation
Reduced development costs

Considerations:

Higher fees than direct integration
Less customization control
Vendor lock-in potential
May not support all desired methods

Direct integration:

Individual connections to each payment method provider.

When to use:

Need maximum control
High transaction volumes (negotiate rates)
Specific payment method customization
Existing relationships with providers

Challenges:

Multiple integrations to maintain
Different APIs and documentation
Separate contracts and relationships
Complex reconciliation
Higher development costs

Best for:

Large enterprises
Specialized payment flows
Cost optimization at scale

Hybrid approach:

Orchestration for some methods, direct for strategic partners.

Strategy:

Direct integration with highest-volume methods
Orchestration platform for long-tail methods
Best rates on primary methods
Quick access to emerging methods

Payment Method Display Optimization

Best practices for checkout:

Show relevant methods only:

Detect customer location (display local methods)
Show based on cart value (BNPL for higher amounts)
Filter by device (mobile wallets on mobile)
Progressive disclosure (expand for more options)

Optimize method order:

Most popular for your audience
Lowest-cost methods (encourage adoption)
Newest/promotional methods
Alternative/regional methods

Visual presentation:

Display official payment method logos
Use recognizable branding
Show “no fees” or benefits
Indicate estimated delivery time
Badge trusted/secure methods

Reduce friction:

Pre-select optimal method
Save customer preferences
One-click for returning customers
Express checkout buttons
Guest checkout option

A/B testing strategies:

Test variables:

Method order and placement
Logo size and styling
Descriptive text vs. logo only
Expanded vs. collapsed display
Badge and trust indicators

Measure:

Conversion rate by payment method
Cart abandonment rate
Average order value
Time to complete checkout
Method selection distribution

Iterate:

Adjust based on customer behavior
Seasonal preferences
Geographic differences
Device-specific optimization

Alternative Payment Methods: Benefits & Challenges

Benefits of Offering Multiple Payment Methods

Increased conversion rates:

30% of shoppers abandon cart if preferred method unavailable
Offering 3-5 payment methods optimizes conversion
Digital wallets increase mobile conversion 20-30%
BNPL increases conversion 20-30% for higher-value items

Higher average order value:

BNPL increases AOV by 30-50%
Digital wallets encourage impulse purchases
Multiple methods attract higher-spending segments
Payment flexibility removes budget constraints

Expanded market reach:

Access international markets with local methods
Serve unbanked/underbanked populations
Attract younger demographics (Gen Z prefers alternatives)
Compete effectively in new geographic markets

Improved customer experience:

Meet customer expectations and preferences
Reduce payment friction
Faster checkout processes
Build trust with familiar payment options

Reduced fraud & chargebacks:

Some methods have lower fraud rates
Guaranteed payments (real-time, bank transfers)
Better authentication (biometrics, 3D Secure)
Irreversible payments (crypto, instant transfers)

Lower processing costs:

ACH cheaper than cards for large amounts
Crypto processing 1% vs. 2.5-3.5% cards
Real-time payments cheaper than wires
Direct bank transfers bypass card networks

Challenges & Considerations

Technical complexity:

Multiple integrations to manage
Different APIs and documentation
Various testing requirements
Ongoing maintenance burden
Security across multiple platforms

Cost management:

Variable fee structures per method
Currency conversion costs
Chargeback fees (where applicable)
Setup and monthly fees
Hidden costs in some methods

Reconciliation complexity:

Multiple settlement timelines
Different reporting formats
Currency conversions to track
Split payments across methods
Accounting system integration

Compliance requirements:

Different regulations per method
Regional compliance variations
Data localization rules
AML/KYC for some methods
Tax implications vary

Customer support:

Staff training on multiple methods
Different refund processes
Method-specific issues
Language and currency support
Extended support hours for global methods

Risk management:

Fraud patterns differ by method
Chargeback rights vary
Some methods irreversible
Currency volatility (crypto)
Counterparty risk assessment

Best Practices for Alternative Payment Methods

Start strategic:

Add methods based on customer data
Prioritize high-impact additions
Test with limited rollout first
Monitor adoption and optimization
Scale based on results

Maintain simplicity:

Don’t overwhelm with too many choices
Show only relevant methods
Clear, simple presentation
Guided selection if needed
Default to most popular

Educate customers:

Explain unfamiliar methods
Highlight benefits (no interest, instant, etc.)
Show security features
Provide FAQs
Transparent about fees or timing

Monitor performance:

Track conversion by method
Measure cost per transaction
Monitor fraud rates
Analyze customer preferences
Calculate ROI per method

Stay current:

Emerging payment trends
New method launches
Regional preferences changing
Technology improvements
Regulatory changes

Alternative Payment Methods FAQs

What are alternative payment methods?

Alternative payment methods (APMs) are any payment options beyond traditional credit and debit cards. This includes digital wallets (Apple Pay, Google Pay, PayPal), buy now pay later services (Affirm, Afterpay, Klarna), cryptocurrency (Bitcoin, Ethereum, stablecoins), bank transfers, QR code payments, and regional payment methods like Alipay, iDEAL, or PIX. APMs have grown rapidly as consumer preferences evolve and global e-commerce expands.

Why should I offer alternative payment methods?

Offering alternative payment methods increases conversion rates by 20-30% because customers can pay using their preferred method. Benefits include: higher average order values (BNPL increases AOV 30-50%), expanded market reach (access international customers and younger demographics), lower processing costs (some APMs cost less than cards), reduced fraud rates, and improved customer experience. 30% of shoppers abandon their cart if their preferred payment method isn’t available.

Which alternative payment methods should I offer first?

Start with digital wallets (Apple Pay and Google Pay) for the immediate 15-30% conversion lift on mobile transactions. Add PayPal for its trusted brand and large user base. If your average order value exceeds $100, implement buy now pay later (Affirm, Afterpay, or Klarna) to increase conversions 20-30% and boost AOV 30-50%. For B2B businesses or large transactions, prioritize ACH bank transfers. Expand to international methods and cryptocurrency based on your specific customer base and business model.

What is buy now pay later and how does it work?

Buy now pay later (BNPL) allows customers to split purchases into interest-free installment payments (typically 4 payments over 6-8 weeks). The BNPL provider performs an instant credit check, approves the customer in seconds, pays you in full immediately (minus processing fees of 2-8%), and assumes all credit risk. Customers pay the BNPL provider in installments. Popular providers include Affirm (best for higher-value items $500+), Afterpay (fashion and retail), Klarna (international reach), and PayPal Pay in 4 (leverages existing PayPal users).

How much do alternative payment methods cost?

Costs vary significantly by method: Digital wallets (Apple Pay, Google Pay) use standard card processing rates (2.5-3.5%) with no additional fees. PayPal typically charges 2.9% + $0.30 to 3.49% + $0.49. Buy now pay later fees range from 2-8% per transaction depending on terms. Cryptocurrency processing costs around 1%. ACH bank transfers cost 1% at Coastal Pay. Real-time payments and bank transfers often cost less than cards. QR code payments depend on the underlying payment method. Always compare total cost of acceptance including processing fees, chargebacks, and fraud.

Do alternative payment methods have chargebacks?

Chargeback rights vary by payment method. Credit cards and PayPal have chargeback rights (customers can dispute 60-180 days after transaction). Buy now pay later providers handle disputes with customers directly (merchants typically not liable). Cryptocurrency and real-time bank payments are irreversible (no chargebacks possible). ACH has return rights (customers can dispute unauthorized debits within 60 days). Digital wallets follow the underlying funding source rules (card-funded can chargeback, bank-funded cannot). Some methods like PIX and UPI have limited or no chargeback rights.

How do I accept cryptocurrency payments?

Accept cryptocurrency through payment processors like BitPay, Coinbase Commerce, or CoinGate that handle crypto complexity and convert to fiat currency, or accept direct crypto payments to your business wallet (requires crypto expertise). Most merchants use processors for automatic fiat conversion (avoiding volatility), multi-cryptocurrency support, familiar checkout experience, and compliance support. Processing fees average 1% compared to 2.5-3.5% for cards. Popular cryptocurrencies for payments include Bitcoin, Ethereum, and stablecoins like USDC. Crypto works best for high-value B2B transactions, international payments, tech-savvy customers, and businesses wanting lower fees.

What are digital wallets and why are they popular?

Digital wallets store payment information securely on smartphones or devices for fast, contactless payments. Popular wallets include Apple Pay (iPhone users), Google Pay (Android users), PayPal, Venmo, and Samsung Pay. Customers authenticate with biometrics (Face ID, fingerprint) or PIN rather than entering card details. Digital wallets are popular because they offer faster checkout (30% higher conversion), enhanced security (tokenization prevents card number exposure), convenience (no manual entry), contactless payments (tap to pay), and they work across devices. 55% of online shoppers prefer digital wallets over entering card details manually.

Which payment methods work best for international sales?

For international sales, offer region-specific payment methods preferred in target markets: Europe needs iDEAL (Netherlands), SEPA bank transfers (EU-wide), Sofort (Germany), and Giropay (Germany). Asia requires Alipay and WeChat Pay (China), UnionPay (China), GrabPay (Southeast Asia), and UPI (India). Latin America needs PIX (Brazil), Mercado Pago, OXXO (Mexico cash payments), and Boleto (Brazil). Also support multi-currency pricing, local language checkout, region-appropriate payment providers, and compliance with local regulations. Customers are 3-4x more likely to complete purchases when their local payment method is available.

What is a real-time payment network?

Real-time payment networks settle funds instantly (within seconds) rather than batch processing over days, and operate 24/7/365. Examples include FedNow and RTP Network (U.S.), Faster Payments (UK), SEPA Instant (Europe), UPI (India), and PIX (Brazil). Benefits include instant settlement (seconds vs. 3-4 days for ACH), availability 24/7 (vs. business days only), lower costs than wire transfers ($0-2 vs. $15-45), immediate confirmation, and irrevocable payments (no reversals or chargebacks). Best for urgent payments, same-day payroll, gig economy payouts, B2B supplier payments, and instant refunds.

How do QR code payments work?

QR code payments let customers scan a code with their smartphone camera to initiate payment. Merchants generate static QR codes (reusable, customer enters amount) or dynamic QR codes (single-use with pre-set amount and details). Customer scans code, payment details populate, customer confirms payment, transaction processes instantly, and digital receipt is delivered. Use cases include restaurant table-side payment, retail contactless checkout, invoice payments, events and ticketing, and donation collection. QR payments work with any smartphone (no special app needed), require no card reader hardware, are contactless and hygienic, and are popular globally especially in Asia and Latin America.

What is the difference between Apple Pay and PayPal?

Apple Pay is a digital wallet that tokenizes credit/debit cards stored on Apple devices for tap-to-pay and online checkout using biometric authentication. Standard card processing fees apply (2.5-3.5%). Only works on Apple devices (iPhone, iPad, Mac, Apple Watch). PayPal is a payment platform and digital account where customers can pay from PayPal balance, linked bank account, or stored cards. Charges 2.9-3.49% + fixed fee. Works on any device/browser. Apple Pay is faster for Apple users with cards already stored. PayPal has broader compatibility and larger user base (435+ million accounts).

Can I offer multiple buy now pay later options?

Yes, offering multiple BNPL providers increases adoption because different customers prefer different providers. Consider offering 2-3 providers: One mainstream option (Affirm for higher values, Afterpay for fashion/retail, or Klarna for international). PayPal Pay in 4 (leverages existing PayPal users, easy integration). One specialized option based on your customer demographic or industry. Display options clearly at checkout with logos and brief descriptions. Customers typically have strong provider preferences based on where they already have accounts or previous positive experiences. Multiple options can increase overall BNPL adoption by 40-60%.

Are alternative payment methods secure?

Yes, most alternative payment methods use security measures equal to or better than credit cards. Digital wallets use tokenization (replaces card numbers with secure tokens), biometric authentication (Face ID, fingerprint), and device-specific encryption. Cryptocurrency uses blockchain cryptography and irreversible transactions. Bank transfers authenticate through online banking credentials or banking app. Buy now pay later providers perform identity verification and fraud checks. Real-time payments use bank-level security. QR code payments link to secure payment pages with encryption. Always use reputable payment providers, ensure PCI compliance where applicable, monitor for fraud patterns, and keep software updated.

How do I handle refunds for alternative payment methods?

Refund processes vary by payment method. Digital wallets refund to original wallet/card (3-5 business days). PayPal refunds to PayPal account instantly. Buy now pay later refunds handled by provider (typically cancels installment plan). Cryptocurrency refunds require new transaction to customer wallet (you send crypto back). ACH refunds via reverse ACH credit (3-4 days). Real-time payments require new payment to customer (no automatic reversal). QR code payments follow the underlying method’s rules. Always process refunds promptly, communicate clearly with customers about timing, keep records of refund transactions, and account for processing fees (usually not refunded).

What payment methods do Gen Z and Millennials prefer?

Younger consumers (ages 18-40) strongly prefer alternative payment methods over traditional cards. Top preferences include: Digital wallets (Apple Pay, Google Pay, Venmo) for speed and convenience. Buy now pay later (Afterpay, Klarna, Affirm) for budget flexibility without credit cards. PayPal/Venmo for trusted brands and social features. Cryptocurrency (growing interest, especially among tech-savvy). Mobile-first payment methods (QR codes, app-based). Real-time payments and instant transfers. This demographic values: speed and convenience, no credit card debt, social payment features, mobile-optimized experiences, and transparent pricing. Not offering alternative methods significantly reduces conversion rates with younger buyers.

How do alternative payment methods affect my PCI compliance?

Many alternative payment methods reduce PCI compliance burden. Digital wallets use tokenization (your systems never touch card data) resulting in the simplest compliance questionnaire (SAQ A). Buy now pay later providers handle payment data (you redirect to their system) with no PCI requirements for you. Cryptocurrency doesn’t involve card data (no PCI requirements). Bank transfers and QR codes (if linking to hosted pages) minimize card data touch. PayPal hosted checkout reduces PCI scope. Direct card acceptance requires full PCI compliance. Using alternative methods strategically can significantly simplify your compliance requirements while improving customer experience.

Can I accept cryptocurrency without holding crypto?

Yes, cryptocurrency payment processors like BitPay, Coinbase Commerce, and CoinGate convert crypto to fiat currency automatically. Customers pay in cryptocurrency, processor confirms blockchain transaction, processor converts to USD/EUR immediately (avoid volatility), and you receive fiat deposit in your bank account within 1-2 business days. Processing fees around 1% plus optional conversion fee (0.5-1%). You never hold cryptocurrency or manage wallets. Benefits include crypto payment acceptance without volatility risk, no crypto expertise needed, automatic conversion at current rates, fiat settlement in your bank account, and tax reporting support. This is the most common approach for businesses new to crypto.

What's the future of alternative payment methods?

Alternative payment methods will continue growing and diversifying. Key trends include: Real-time payment adoption accelerating (FedNow, instant transfers replacing ACH), buy now pay later maturing (regulation increasing, consolidation expected), cryptocurrency gaining mainstream acceptance (especially stablecoins for payments), embedded finance (payment methods integrated directly in platforms), biometric authentication becoming standard (face, fingerprint, voice), account-to-account payments growing (direct bank transfers bypassing card networks), super-apps combining messaging, payments, and commerce (following Asian models), and AI-powered payment optimization (automatically routing to best method). Businesses should maintain flexibility, monitor emerging methods, test new options carefully, and prioritize customer preference.

Get Started with Alternative Payment Methods

Expand Your Payment Options, Increase Conversions

Stop losing 30% of customers who abandon checkout when their preferred payment method isn’t available. Coastal Pay supports multiple alternative payment methods with seamless integration.

What happens next:

Consultation to identify optimal payment methods for your business
Integration planning for your platform and customer base
Technical implementation with full developer support
Testing and optimization across all payment methods
Launch and monitor conversion improvements

Questions About Alternative Payment Methods?

Our payment experts can help you understand which alternative payment methods will benefit your business most and provide implementation guidance.