How Alternative Payment Methods Are Redefining Global Commerce

Alternative Payment Methods (APMs) are gaining significant traction worldwide. APMs such as instant payments, digital wallets, and QR codes provide a seamless, more convenient way to purchase goods or services compared to cash, debit cards, and credit cards. APM solutions also build economic inclusivity for people who live in underbanked regions or lack the means to open a bank account.

Generally speaking, APMs are currently more popular in cash-dominated regions. Some notable examples of APMs include India’s Unified Payments Interface (UPI), Brazil’s Pix, China’s WeChat Pay, and Indonesia’s GoPay. Governments in these regions are accelerating their push for a cashless economy and, in some cases, desire greater control over domestic payment processing.

US$142 trillion

The total value of commerce transactions made using alternative forms of payment will grow by 170%, reaching US$142 trillion by 2030, per ABI Research report.

To inform businesses of the opportunities generated by APMs, this post lists three types of APMs, along with examples of each one. Furthermore, our research findings will help key stakeholders align technology deployments with prevailing trends in both in-store retail shopping and e-commerce.

To illustrate the differences and overlaps, Table 1 summarizes the definitions, key benefits, and primary use cases for each APM option:

Table 1: Comparative Analysis of the Types of Alternative Payment Methods

(Source: ABI Research)

Instant Payments

The first type of APM shaping the future of commerce is instant payments. Instant payments are electronic fund transfers that settle in real time or near-real time, meaning the money moves from one account to another almost immediately, at any time. This is different from traditional payment methods like writing a check or using a wire transfer, which can take hours or even days to clear.

Given its ease of use and convenience, instant payments are the most popular form of APM. A recent survey from the U.S. Federal Reserve indicates that 86% of businesses and 74% of consumers used faster or instant payment services in 2023.

45%

ABI Research estimates that instant payments account for 45% of total APM transactions in 2025. This comfortably makes instant payments the largest segment of APMs.

Instant payment systems are driven primarily by emerging markets shifting from cash-based to digital-based commerce. For example, India’s UPI allows users to pay using their UPI account number. This builds economic inclusivity by facilitating purchases without setting up a bank account.

Another example of this APM option is Brazil’s Pix, which is used by 74% of the country's population. Users benefit from being able to transfer money immediately, as opposed to waiting up to 30 days for a payment to be processed. Pix also exemplifies how to successfully implement robust security features into an APM. It uses payment Hardware Security Modules (HSMs) and stores encrypted data with the Banco Central do Brasil’s (BCB) internal systems to prevent fraud.

Digital Wallets

Another kind of APM redefining global commerce is digital wallets, which have been covered extensively by ABI Research’s Digital Payment Technologies team. Digital wallets are like electronic purses on your phone or computer, where you can store payment information securely and use it to pay for things online, in apps, or by tapping a Point of Sale (POS) terminal at a store.

41%

Digital wallets account for 41% of total APM transaction in 2025.

Digital wallets are one of the easier types of APMs to market, considering they have already had widespread use since the COVID-19 pandemic. A 2024 ABI Research/NFC Forum survey revealed that 55% of consumer prefer to make payments using a smartphone or smartwatch. Additionally, 50% of e-commerce payment transactions worldwide in 2023 were made with a digital wallet, according to Worldpay. It’s clear that people are well aware of digital wallets and show a willingness to leverage them.

Governments, in their quest to reduce reliance on foreign payment providers and digitalize fiat currency, are expected to drive adoption of APMs by offering Central Bank Digital Currencies (CBDCs). CBDCs require governments to issue digital wallets that serve the same function as a physical wallet would. Several European and Southeast Asian countries, along with China, show growing interest in CBDC wallets. Traction is gaining for integrating cryptocurrencies into CBDC wallets. The decentralized nature and potentially lower transaction fees are appealing attributes of crypto in the eyes of governments that want to digitalize their economies.

Some of the key marketing advantages for APM providers developing digital wallets are:

• Most consumers and merchants are comfortable using smartphone devices.
• Paying with a mobile device is quick and easy.
• Digital wallets can provide value beyond payments by storing transit tickets, healthcare cards, and more.
• APM providers can leverage best-in-class security features already available in mobile devices.

An example of an innovative APM system is Indonesia’s GoPay wallet. Used by 38 million people and processing 80% of total purchases in the country, GoPay provides customer value outside of payments. The platform can be used for loan services, monthly bill paying, investment funds, and health insurance programs. GoPay demonstrates the versatility of digital wallets and the opportunity for APM providers to tap into new markets.

QR Payments

The third and final type of APM analyzed in ABI Research’s report is QR payments. This form of alternative payment is where a customer scans a merchant’s QR code using a smartphone to complete a transaction. These low-cost APM transactions work by encoding payment details into the QR code, which, once scanned, prompts the customer to authorize the payment through a linked mobile wallet or banking app. Common use cases for QR payments include in-store retail purchases, food delivery, peer-to-peer transfers, and transportation services. QR payments allow businesses to process payments faster than traditional payment methods, integrate with digital wallets, and support cross-border payments.

14%

of all APM transactions are made via QR payment, making it the least used variation of alternative payment.

The vast majority of QR payments are made in cash-dominated markets like Asia-Pacific, Latin America, and the Middle East & Africa. APM technology providers in Asia-Pacific have excelled at integrating QR payments into social platforms, notably the domestically-based WeChat. By integrating with chat services and social media, QR payments support more than just users’ banking requirements; it adds a sense of community to the payment ecosystem. With WeChat Pay, businesses can directly interact with customers, publicize promotions within the app, boost engagement, and improve the customer experience.

APM vendors in Asia-Pacific take a different approach from North American and European vendors. Whereas Asia-Pacific vendors add a social aspect to QR payment platforms, their North American and European counterparts limit services to financial transactions, diminishing perceived value. QR payments are also held back in Western markets due to security concerns and the widespread use of POS terminals in retail. For these reasons, this type of APM is restricted to hospitality and charity fundraising in these regions.

Adapting to the APM Future Requires Technology Intelligence

APMs are rapidly changing global commerce by providing quicker, more seamless ways to make payments. For businesses, APMs offer a way to enhance the customer experience and expedite Business-to-Business (B2B) transactions. For incumbent banks and government entities, APMs break down barriers that have historically prohibited millions of people from accessing financial services and participating in commerce.

Choosing the right type of APM for your business depends on what features you prioritize. While all APMs share some common traits, they also have distinct features. Case in point, instant payments provide 24/7/365 access, digital wallets have proven mobile security features, and QR payments offer low-cost solutions.

As a digital payment technology provider, there is no ignoring the surge in APM adoption. As governments increasingly distance themselves from cash-based economies, hundreds of trillions of dollars will be spent on these new and improved forms of payment. For now, the biggest revenue opportunity for APMs lies in emerging markets, where banking infrastructure is underdeveloped and governments are centralizing digital currency.

To further analyze the growing role of APMs in commerce, their future outlook, and best practices for implementing them, read the ABI Research report summary, Alternative Payment Methods (APMs): Key Implementation Strategies for Payment Providers.

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