With the Covid-19 pandemic, we’ve all seen a rapid acceleration of the digitalisation of payments, resulting in cashless payments becoming an important part of the market.
There has been a significant increase in the number of alternative payment methods for online shopping, even though debit and credit cards still dominate.
In order to make payments easier and faster, new payment methods like digital wallets, QR codes, mobile apps and prepaid cards have become widely used. Increasing use of mobile devices for shopping online, instead of traditional online shopping using a computer or laptop, also drove this trend.
Whether you are looking for an alternative payment method that works for you or if you need assistance finding one that does, you have come to the right place. As cashless payments become more prevalent, let’s examine the best methods to process them.
What are alternative payment methods?
Alternative payment methods (APMs) can be defined as any non-card payment method. Over 200 alternative payment methods exist worldwide, including bank transfers, direct debit, digital wallets, cash on delivery, e-invoices, digital currencies, and several highly specific locally preferred forms of payment.
Let’s look at some of the most popular types of alternative payment methods:
Cash payments
A QR code or a reference number can be generated to identify a customer’s payment when making an online purchase using cash. These are used for paying in cash at their local post office or off-licence. The merchant ships the goods or credits the customer’s account once payment is confirmed.
Prepaid cards and accounts
The two types of prepaid options are prepaid cards, which operate on traditional platforms like Visa and Mastercard, and prepaid accounts, which operate independently of credit cards. A cash-in card must be loaded in advance to make a payment, and you can spend as much money as you have on the card.
Account-to-account payments (A2A)
Using this method allows consumers to use their bank accounts to pay for online purchases. Bank transfers are often used for recurring payments. Every payment is deducted directly from the customer’s bank account after they provide their bank account number and approve the recurring transaction.
Local card schemes
They function the same way as global card systems such as Visa and Mastercard, but these cards will only be accepted in one or a few markets. Consumers prefer them when available because they cater to their specific needs and cost merchants less to process.
E-Wallets
A payment wallet stores funds digitally. Customers can top up their e-wallets via bank transfer, card or cash and use them to make payments online, at points of sale, and over the phone. Among the most popular e-cash methods are Alipay, PayPal, and WeChat Pay.
Mobile wallets
Mobile wallets provide consumers with an alternative payment method that is user-friendly. App Stores offer mobile wallets you can download for your phone, which can be linked to debit cards and bank accounts into the app for mobile payments. Downloading or using these apps is free, and there are no transaction fees. The most common ones are Google and Apple Pay.
Buy Now Pay Later (BNPL)
Buy Now Pay Later (BNPL) allows customers to defer the entire amount or spread the cost over several payments without added interest. The payment of purchases is usually made by debit or credit card from a bank account. It is a good alternative for customers with no credit history or access to credit cards.
Cryptocurrencies
Cryptocurrencies have become one of the most popular alternative payment methods in recent years. Cryptography is used to encrypt this digital currency, and it’s almost impossible to counterfeit or duplicate.
Why you need to accept alternative payment methods
Your customers expect more from you than just quality products or services. It’s equally important to have a fast, user-friendly, and convenient checkout process.
You’ll undoubtedly get more customers if you offer more payment methods, and they’ll be happier to purchase from you. Don’t overlook the importance of offering more payment options as a competitive edge in your market.
With TRU Connect, businesses seeking the most payment options can access the next generation of online payments with a simple, easy and fast gateway that works on any device. Besides accepting most major currencies, we also offer alternative payment methods through our partner network.
Discover how more traditional and alternative ways of accepting payments can benefit your business.
