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What are alternative payment methods (APMs)?

Alternative payment methods (APMs) refer to payment options that serve as an alternative to traditional payment methods like credit cards and bank transfers. APMs have become increasingly popular among online shoppers and merchants in recent years as they provide more choice, convenience, and flexibility during checkout.

In this comprehensive guide, we will explore:

  • Reasons for the rising popularity of APMs
  • What are the main types of APMs?
  • Benefits of offering APMs for online merchants
  • Top APMs used in the UK and globally
  • Main Types of Alternative Payment Methods
  • Implementing and optimizing APMs for higher conversion

So, let’s dive into the world of alternative online payments and how they can benefit your e-commerce store!

There are several major categories of APMs available for e-commerce businesses today:

  • E-wallets - Digital wallets or e-wallets like PayPal, Apple Pay, and Google Pay allow customers to store their payment information online to make quick and easy payments.

  • Bank transfers - Direct bank transfers via platforms like Trustly or SOFORT provide a convenient bank-to-bank payment option.

  • Buy Now Pay Later (BNPL) - BNPL financing options like Klarna let customers split purchases into installments paid over time.

  • Cash-based - Includes options like cash on delivery or paying at convenience stores.

  • Cryptocurrency - Digital currencies like Bitcoin can be used for online payments.

  • Direct debit - Merchants can directly debit customer bank accounts on a scheduled basis.

  • QR code payments - To instantly pay, customers can scan QR codes via mobile payment apps.

  • Prepaid cards - Customers top up prepaid cards to dedicate funds for online shopping.

Benefits of Offering APMs for Online Merchants

There are several key reasons why online merchants should consider implementing alternative online payment methods:

  • Increased sales - APMs can help merchants tap into new customer demographics who prefer to pay via their preferred payment method. This can significantly increase online sales.

  • Improved conversion rates - Studies show that adding preferred local payment options can increase conversion rates by up to 31%.

  • Enhanced customer experience - More payment options and flexibility create a smoother, more convenient checkout experience.

  • Reduced cart abandonment - Up to 20% of online shopping carts are abandoned due to a lack of preferred payment options.

  • Lower transaction fees - Some APMs have lower transaction fees compared to credit cards.

  • Access to new global markets - APMs allow merchants to expand into and better serve international markets.

  • Competitive advantage - Merchants that accept diverse payment methods can differentiate themselves from competitors.

Top APMs Used in the UK and Globally

Now let's explore some of the most widely used APMs by online shoppers in the UK and around the world:


PayPal is one of the most ubiquitous e-wallets with over 20 million active UK users.

Allows customers to easily check out using their PayPal balance, bank account, or credit/debit cards linked to their PayPal account.

Very popular for international payments given its widespread global adoption.

Amazon Pay

Seamless checkout using Amazon account details makes it convenient for regular Amazon shoppers.

Customers can use stored payment methods in their Amazon account.

Most beneficial for merchants already selling on Amazon or targeting a similar customer base.

Apple Pay

Increasingly common mobile payment method for iOS users with supported devices.

Customers simply authenticate payments using Touch ID or Face ID.

Creates a smooth, one-touch checkout experience on mobile.


BNPL financing in the UK and other markets lets customers split payments interest-free over four installments.

It can help lower cart abandonment and increase order values.

Flexible payment options include Pay Now, Pay in 30 Days, and Financing with 4 interest-free installments.

Direct Debit

Allows merchants to directly debit customer accounts on a set date with their authorization.

Often used for recurring subscriptions or memberships.

Low costs and customer ease make it ideal for repeat transactions.

How to Implement APMs on Your E-commerce Store

Here are some tips for business owners on adding alternative payment options:

  • Assess your target audience - Consider geographic locations, demographics, shopping habits, and preferences to select locally popular payment methods.

  • Research top APMs - Use market research and local insights to create a priority list of the top 5-10 alternative payment solutions to offer.

  • Evaluate providers - Compare costs, contract terms, integration options, and features when selecting APM providers.

  • Consider regulations - Ensure you comply with regional payment regulations and licensing requirements.

  • Choose user-friendly options - Opt for APMs with simple, fast checkout flows to avoid customer friction.

  • Enable multi-currency pricing - Support different currencies to tap into international shoppers.

  • Integrate APMs - Work with your e-commerce platform (Shopline UK offers APM integrations) to add alternative payment plugins.

  • Promote available options - Clearly display icons and messaging at checkout to advertise accepted APMs.

Tips for Optimizing APMs to Boost Online Sales

  • Offer a logical mix - Balancing ease of use, global reach, and target customer preferences ensures widespread appeal.

  • Test and iterate - Use A/B testing and data-driven insights to measure performance and double down on top converting options.

  • Highlight options appropriately - Display preferred local APMs more prominently depending on the visitor's location.

  • Make options clear at checkout - Use icons, logos, and clear messaging so customers immediately understand available payment methods.

  • Ensure seamless mobile experience - APM and checkout flows should be optimized for smaller screens to minimize mobile cart abandonment.

  • Consider promotional incentives - Offer perks like discounts, free shipping, or cashback for customers who utilize specific APMs.

  • Analyze performance frequently - Use analytics to spot usage trends and identify ideal combinations of payment methods.

  • Localize messaging - Connect with international shoppers with localized descriptions, currencies, and languages.


Alternative online payment methods present an excellent opportunity for e-commerce businesses to drive higher conversion rates by catering to customer payment preferences. By following merchant best practices and localizing options to your target markets, you can successfully implement the optimal mix of APMs for your business.

Analysing performance data and iteration will help you provide the most seamless, convenient checkout experience. Give your customers the flexibility and payment methods they want to exceed their purchasing expectations.

To explore integrating the top alternative payment solutions for your UK online store, check out Shopline UK's payment options.

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