Alternative payment methods explained: wallets to Pix

An alternative payment method (APM) is any way of paying that does not run on a Visa or Mastercard card: digital wallets, buy now pay later (BNPL), bank transfers and open banking, and national schemes such as iDEAL in the Netherlands, BLIK in Poland, Pix in Brazil and UPI in India. They are run by very different operators (technology companies, bank consortia, licensed lenders and, in Brazil's case, the central bank), and merchants usually connect to them through a payment service provider rather than one by one.

APMs at a glance

All figures are as published by the operator or body named, checked 3 November 2026. Figures from different years are not directly comparable.

How APMs differ from cards

A card payment travels from the merchant's acquirer through a card scheme to the cardholder's issuer, with interchange paid on each transaction (see how card payments work). Most APMs skip some or all of that chain. A bank-transfer method pulls money straight from the payer's account. A BNPL provider pays the merchant and collects from the shopper later. A wallet may simply store a card and pass it to the card network, or it may hold its own balance.

That matters for three practical reasons:

• Cost structure. Without card interchange, pricing is set by the scheme operator and the PSP.
• Refunds and disputes. These follow the APM's own rulebook. Stripe notes, for example, that Wero supports disputes while iDEAL does not, although both support refunds.
• Reach. Many APMs are national. A shopper in the Netherlands may expect iDEAL, one in Poland BLIK, one in Brazil Pix.

Digital wallets

Wallets fall into two broad types. Pass-through wallets store a card (usually as a token) and, at checkout, send a card transaction over the normal card rails; the merchant's acquirer handles it as a card payment. Staged or balance wallets hold money in an account at the wallet provider, so the payment is a transfer between two accounts inside that provider, funded by card, bank transfer or stored balance.

The type affects who the merchant contracts with and how it is settled. Our profiles of PayPal and Revolut cover the licences each holds, and the PayPal alternatives page compares options.

Buy now pay later

With BNPL, the shopper splits the price into instalments or pays after a delay, and the BNPL firm pays the merchant. The merchant pays a fee to the provider; the shopper's repayments go to the provider.

Klarna is the best-known European example. Its About page (checked 3 November 2026) names Klarna Bank AB (publ), based in Stockholm, as the operating entity, says the company obtained a full banking licence in 2017, and states that the parent, Klarna Group plc, listed on the New York Stock Exchange (ticker KLAR) in September 2025. The same page says its monthly financing product is issued by WebBank. It lists 26 supported countries, without a date for that figure.

Rules on BNPL differ by country, so merchants should check which legal entity provides the credit in each market they sell into.

Bank transfers and open banking

Bank-based APMs move money directly between accounts. In Europe the main forms are:

• Pay by bank via open banking. A licensed payment initiation provider asks the payer's bank to send a transfer to the merchant. See open banking payments explained and our profile of Trustly.
• Instant credit transfers. The European Payments Council's SEPA Instant Credit Transfer scheme went live in November 2017. Its rulebook sets a 10-second maximum execution time (with a 20-second time-out in exceptional cases), runs every day of the year and has a default cap of EUR 100,000 per transaction unless participants agree otherwise.
• Direct debits, used mostly for recurring bills. See our profile of GoCardless.

Local payment schemes

iDEAL and Wero (Netherlands and wider Europe)

iDEAL launched in 2005 and, according to a 28 October 2025 press release published by Wero, is used by more than 350,000 businesses and handles more than 1.5 billion transactions a year, around 72% of Dutch e-commerce. The shopper picks their bank and confirms the payment in their banking app.

iDEAL is moving to Wero, the payment service of the European Payments Initiative (EPI). EPI Company SE is based in Brussels and was authorised as a payment institution by the National Bank of Belgium on 20 February 2024. De Nederlandsche Bank oversees both iDEAL and Wero. The timeline, as published by EPI, the Dutch Payments Association and Stripe:

Sources: EPI (16 July 2026), Dutch Payments Association (16 July 2026), Stripe support page (checked 3 November 2026).

BLIK (Poland)

BLIK is operated by Polski Standard Płatności. The European Commission's fintech map says it launched in February 2015, created by six Polish banks: PKO Bank Polski, Alior Bank, Bank Millennium, ING Bank Śląski, Bank Zachodni WBK (now Santander Bank Polska) and mBank. The same page reports 763 million BLIK transactions in 2021.

The shopper generates a six-digit code in their banking app. According to BLIK's own FAQ, the code is single-use, valid for two minutes and managed centrally by the operator. BLIK covers online and in-store payments (including contactless on Android), ATM withdrawals, transfers to a mobile number and recurring payments. Nuvei, which supports BLIK, notes that merchants need an agreement with a bank or PSP that offers it, and that recurring payments require alias registration and BLIK's UX certification.

Pix (Brazil)

Pix is the instant payment system created by Banco Central do Brasil, which launched it in November 2020. The central bank owns the rulebook, sets the security rules and runs the anti-fraud database, according to a European Payments Council article published on 30 May 2024. That article reports:

The central bank's 2022 Annual Report described Pix as having more than 141 million users at that time. Features added since launch include payment scheduling, payment initiation through third-party providers and cash withdrawal at merchants (Pix Saque and Pix Troco).

UPI (India)

UPI is run by the National Payments Corporation of India (NPCI), which describes itself as the umbrella organisation for retail payments in India. It was launched in Mumbai on 11 April 2016 by Raghuram Rajan, then Governor of the Reserve Bank of India, together with NPCI's leadership. UPI lets users send and request money instantly using a virtual payment address, similar to an email address, and link several bank accounts. NPCI described it as an advanced version of its Immediate Payment Service (IMPS). At launch, 29 banks had agreed to offer it.

How merchants add APMs

Most merchants do not sign separate contracts with each scheme. A payment service provider or gateway aggregates them behind one integration and one settlement report. When comparing providers, check:

• which APMs are live in each country you sell into, and which are on a roadmap;
• whether the PSP is a direct participant in the scheme or uses a partner;
• refund and dispute handling for each method;
• settlement timing and currency;
• any scheme changes ahead, such as the iDEAL move to Wero.

See payment gateway vs PSP vs acquirer for how these roles divide, our Stripe profile for one PSP's coverage, and the APM hub for more.

Key terms

• APM: alternative payment method; any payment method other than the major card schemes.
• BNPL: buy now pay later; the provider pays the merchant and the shopper repays in instalments or later.
• Pass-through wallet: a wallet that stores a card and sends a card transaction.
• Staged wallet: a wallet that holds a balance and settles inside its own system.
• Payment initiation: a licensed service that starts a bank transfer from the payer's account on their instruction.
• SCT Inst: the SEPA Instant Credit Transfer scheme for euro payments in seconds.
• Virtual payment address: the UPI identifier that replaces account numbers.