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Alternative Payment Method (APM) Gateways

09 July 2025

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Written by Libby James
Libby James is co-founder, director and an expert in all things merchant services. Libby is the go-to specialist for business with more complex requirements or businesses that are struggling to find a provider that will accept them. Libby is regularly cited in trade, national and international media.
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    APM Payment Gateway Guide for Merchants

    Alternative Payment Methods (APMs) refer to any payment method that does not involve cash or a major credit/debit card scheme such as Visa, Mastercard, or American Express. In today’s fast-evolving digital economy, APMs are increasingly favoured by consumers worldwide, offering more flexible, secure, and often lower-cost ways to pay.

    With no single APM dominating the global landscape, businesses must adapt to local preferences and technical requirements. This guide explores how APM gateways work, the types of APMs available, the benefits of using them, and how to choose the right options for your business.

    What is an APM Gateway?

    An APM gateway enables businesses to process transactions via alternative payment methods through a single integration. Rather than connecting to each APM provider individually, merchants can access a broad array of local and global payment options through one unified system.

    This approach helps simplify payment infrastructure, streamline checkout processes, and boost international conversions.

    Types of Alternative Payment Methods

    1. Prepaid Cards

    Prepaid cards are pre-loaded with funds. They are not linked to a bank account or credit facility and are popular among consumers who want spending control or do not qualify for traditional cards.

    2. Cash-Based Payments (E-Cash)

    Customers receive a barcode or payment reference during online checkout, then pay with cash at a participating retail location. Once confirmed, the goods or services are released. Examples include Boleto (Brazil), Oxxo (Mexico), and Fawry (Egypt).

    3. Real-Time Bank Transfers

    These allow immediate bank-to-bank payments without the use of cards. Common in Europe and Asia, examples include iDEAL (Netherlands), Sofort (Germany), and POLi (Australia/New Zealand).

    4. Direct Debit

    Often used for recurring transactions, direct debit allows a merchant to pull funds from a customer’s account with prior consent. Examples include SEPA Direct Debit, ACH (US), and BACS (UK).

    5. Domestic Card Schemes

    These local card networks cater to regional markets and are often cheaper for merchants. Popular examples include Bancontact (Belgium), Cartes Bancaires (France), and Mada (Saudi Arabia).

    6. E-Wallets

    Consumers load digital wallets with funds using various methods and use them to pay online or in-store. They may also support peer-to-peer and cross-border transfers. Examples include PayPal and Alipay.

    7. Mobile Wallets

    Stored on smartphones, these allow payments via NFC, QR code, or SMS. Funding is usually from cards, banks, or mobile operators.

    8. Digital Wallets

    These store card details securely and generate tokenised card numbers for each transaction. Apple Pay and Google Pay are popular examples.

    9. Buy Now, Pay Later (BNPL)

    BNPL options let customers split payments into instalments or defer the cost. They improve affordability and are particularly effective for e-commerce.

    Local vs Global APMs

    APM popularity is influenced by regulation, culture, and banking infrastructure. For example:

    • In the Netherlands, iDEAL accounts for over 70% of online purchases.
    • In Germany, PayPal dominates digital wallets.
    • In France, Cartes Bancaires rivals Visa and Mastercard.

    This means a one-size-fits-all approach will not work. Localised payment strategies are key to conversion success.

    Benefits of Accepting Alternative Payment Methods

    1. Higher Conversion Rates Consumers are more likely to complete purchases when offered their preferred method.
    2. Lower Abandonment Rates APMs reduce friction at checkout, especially on mobile.
    3. Improved Customer Trust Familiar local methods increase trust and satisfaction.
    4. Increased Reach Access to underbanked and non-card-holding customers in emerging markets.
    5. Reduced Fraud and Chargebacks Tokenisation and bank-authenticated methods reduce disputes.
    6. Better Cash Flow Management Some APMs settle faster than traditional card networks.

    Using APMs and Reducing Checkout Bounce Rates

    Speed and convenience are critical in modern e-commerce. Shoppers expect fast, frictionless payment experiences, especially on mobile. One of the key reasons for cart abandonment is a slow or complicated checkout process. APMs, especially those integrated via pass-through wallets or one-tap mobile options, help reduce bounce rates by speeding up the transaction process.

    Technologies like Accelerated Mobile Pages (AMP) can also enhance load times and UX on mobile, further reducing friction at checkout. When paired with a seamless APM gateway, AMP-optimised payment pages can significantly lower abandonment rates, especially in regions where mobile usage is high, and internet speeds vary.


    How to Choose the Right APMs for Your Business

    1. Know Your Customers Use analytics or customer surveys to understand preferred payment methods in each region.
    2. Assess Business Fit Weigh up transaction fees, compliance requirements, and user experience.
    3. Evaluate the User Experience Look at the number of clicks, redirects, and mobile responsiveness.
    4. Security and Compliance Ensure the APM supports encryption, PCI DSS standards, and local regulations.
    5. Ease of Integration Choose a payment stack that allows plug-and-play APMs with minimal developer input.

    Wrapping It Up

    Alternative payment methods are no longer optional for growth-minded merchants; they are essential for reaching customers across the globe, improving checkout conversion, and reducing fraud. As payment preferences continue to evolve, staying ahead of consumer expectations is vital.

    At Merchant Advice Service, we help businesses like yours identify and implement the most effective payment solutions. Whether you're exploring new markets or improving your existing payment infrastructure, our Payments Directory® connects you with trusted providers who understand your sector and region. Start browsing today or get in touch for tailored support.

    FAQs

    What is the difference between an APM and a traditional card payment?
    APMs do not rely on card schemes like Visa or Mastercard. They include bank transfers, digital wallets, and voucher-based payments, offering more flexibility and often lower fees.
    Are APMs more secure than card payments?
    Many APMs use tokenisation and direct bank authentication, which can reduce the risk of fraud and chargebacks.
    Do I need a separate integration for each APM?
    Not necessarily. APM gateways allow you to offer multiple methods through a single integration.
    How do APMs affect conversion rates?
    Positively. Offering popular payment options tailored to local preferences significantly reduces cart abandonment.
    Can APMs be used for subscriptions?
    Yes. Direct debit, digital wallets, and some BNPL options support recurring billing.
    Do APMs cost more to process than card payments?
    Fees vary. In some markets, APMs offer lower transaction costs than cards.
    Are APMs suitable for high-risk businesses?
    It depends on the method. Some APMs are more lenient than traditional providers, but risk appetite varies.
    Can APMs help me expand internationally?
    Absolutely. Offering region-specific payment methods is crucial for entering and succeeding in new markets.

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