What are Alternative Payment Methods?

Alternative payment methods are solutions that differ from traditional online payment options (i.e. credit/debit cards).These are sometimes referred to as APMs.

Exemples : 

• Portefeuilles numériques : Skrill and Neteller are examples of digital wallets. Some eCommerce stores might provide alternative payment methods, such as Apple Pay or Google Pay, as an option at checkout; this is important for online and in-store contactless payments. 
• Mobile Payment Platforms: These are commonly used for peer-to-peer (P2P) transactions, which is when users send money to each other. Venmo, MobilePay, and Cash App are some examples. 
• Bank Transfer: A user transfers money by entering the recipient’s bank details; tools like Zelle and its alternatives are frequently used for this.
• Buy Now, Pay Later (BNPL): Customers pay in chunks; this is often used for items like clothes and electronics. Klarna is one example. These tools are important for affordability, though you’ll need to ensure that the customer is reputable.
• Cryptocurrencies: Some websites let users pay with cryptocurrencies (e.g. Bitcoin); this isn’t yet as widespread as some of the other methods. Cryptocurrencies are important for potentially increased anonymity.

APM adoption has become more widespread for multiple reasons. Here are some of them: 

• Convenience: Alternative payment methods often complete transactions faster, and checkout is typically easier than card payments due to fewer steps being required, leading to a more streamlined process.
• Sécurité : APMs use advanced security measures, such as biometric authentication. This, along with tokenization and encryption, can reduce the risks of cybersecurity threats like fraud.

• Financial Inclusion: Not everyone has access to debit/credit cards; APMs can offer alternative options, meaning that more people have access to products and services. 
• Online Shopping: Frictionless payments are important for the customer experience in eCommerce. Alternative payment methods can facilitate this via streamlined payments and offering more options. 
• Rewards/Incentives: Consider cashback and other incentives for alternative payment methods. 

Some of the reasons why consumers should consider using APMs are: 

• Transactions: APM transactions are typically faster than traditional cards. It’s quicker to check out, and the money also leaves the user’s account faster in many instances. 
• Sécurité : Features like biometric authentication can reduce the risk of identity theft, fraud, etc. when using APMs. 
• Adaptability: APMs allow users to be more flexible with the payment options they choose. As a result, they can check out in a way that suits them. 
• Budgeting: Customers can use BNPL tools to pay for items in smaller chunks and manage their cash flows. 

For businesses:

• Sales: Offering more payment options can result in higher sales and revenue because customers aren’t limited in their checkout options. 
• Transaction Costs: APMs might have smaller transaction costs compared to traditional banks; it’s worth double-checking each tool you use in advance, though. 

• Cash Flow: Due to streamlined payments and quicker processing times, businesses can manage their cash flows better with APMs. 
• Loyalty: By providing the payment options that users want to use, you may increase brand/customer loyalty.

You need to think about both sides of the coin when implementing APMs. With that in mind, some of the other things to consider when implementing these methods are: 

• Sécurité : Understand the security elements of APMs and protect against possible downsides. 
• Regulation/Compliance: Keep an eye on the changing regulations around APMs. 
• Interoperability: Make sure that your APMs are compatible with one another. 
• Adaptation: Choose payment methods that your customers are familiar with, but understand that this might take time if they’re new to them.