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The Best Alternative Payment Methods For Small Businesses

Cryptocurrency, ACH, digital wallets, or "Buy Now, Pay Later" are all possible alternative payment methods you may want to accept at your small business. Read our guide to find out the best options.

    Davina Ward
  • Last updated onUpdated

  • Frank Kehl
  • REVIEWED BY

    Frank Kehl

    Senior Staff Writer

Advertiser Disclosure: Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity.

Alternative payment methods are becoming increasingly common, with consumers coming to expect nontraditional payment acceptance in nearly every transaction.

For business owners, the slow shift toward a cashless society means keeping up with the various alternative payment methods on the market and deciding which options to offer within their business.

This guide takes a deep dive into the different types of alternative payment methods, including the definition of an alternative payment method and which nontraditional payment methods to consider supporting as a business owner.

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CompanyBest ForNext StepsBest For
PayPal

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  • Best overall alternative payment method
  • 3.49% + $0.49
  • Free PayPal business account to accept payments
  • Best overall alternative payment method
  • 3.49% + $0.49
  • Free PayPal business account to accept payments

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Venmo

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  • Sole proprietors offering in-person services
  • 1.9% + $0.10 for in-person transactions
  • Free Venmo business profile via the Venmo app
  • Sole proprietors offering in-person services
  • 1.9% + $0.10 for in-person transactions
  • Free Venmo business profile via the Venmo app

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Square Cash App

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  • Square users
  • 2.75% fee per transaction
  • No monthly fee for Square Cash App business account
  • Square users
  • 2.75% fee per transaction
  • No monthly fee for Square Cash App business account

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Zelle

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  • Free bank transfers
  • Variable bank fees
  • Zelle is completely free (banks charge fees)
  • Free bank transfers
  • Variable bank fees
  • Zelle is completely free (banks charge fees)

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Apple Pay

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  • Digital wallet services for Apple users
  • Fees vary by payment processor
  • Apple Pay doesn't charge fees to use
  • Digital wallet services for Apple users
  • Fees vary by payment processor
  • Apple Pay doesn't charge fees to use

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Google Pay

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  • Digital wallet services for android users
  • Fees vary by payment processor
  • Google Pay is free to use for merchants and customers
  • Digital wallet services for android users
  • Fees vary by payment processor
  • Google Pay is free to use for merchants and customers

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ACH

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  • Best for low-cost recurring payments
  • Average processing costs range from $0.26-$0.50 per transaction
  • Few processing limits
  • Best for low-cost recurring payments
  • Average processing costs range from $0.26-$0.50 per transaction
  • Few processing limits

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Affirm

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  • Buy Now, Pay Later services
  • Variable transaction fees
  • Many integrations
  • Buy Now, Pay Later services
  • Variable transaction fees
  • Many integrations

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Read more below to learn why we chose these options.

Table of Contents

What Are Alternative Payment Methods?

Alternative payment methods (APMs) are any payments without using cash, credit cards, or debit cards. Examples of alternative payment methods include cryptocurrency, ACH, buy now, pay later options, digital wallets, and more.

Alternative payments may be referred to as alternative methods of payment (AMOPs) or nontraditional payments.

Types Of Alternative Payment Methods

In general, there are five types of alternative payment methods:

  1. Digital Wallets
  2. Cryptocurrency
  3. Bank Transfers
  4. Buy Now, Pay Later
  5. Promotional Or Loyalty Program Payments

The five types of alternative payment methods encompass a range of popular alternative payment method options. For example, Apple Pay and Google Pay fall under the digital wallet category, while ACH and eCheck payments fall under the bank transfer category.

Here’s a breakdown of the five types of alternative payment methods:

Digital Wallets

A digital wallet is an app that stores personal payment information and can be used as a prepaid account that stores funds. Some of the most popular digital wallets include Google Pay, PayPal, Apple Pay, Cash App, Venmo, and AliPay.

In addition to serving as a storage center for payment information, most digital wallets enable users to load money into an account associated with the platform itself, creating a digital wallet balance that can be used to make in-person, online, and peer-to-peer payments. Notably, digital wallets may also store tickets for events or transit, coupons, IDs, and more.

Digital and mobile wallets provide enhanced security for their users since they don’t store customer data on a merchant’s servers.

Cryptocurrency

Cryptocurrency is a form of decentralized virtual currency, with the most popular cryptocurrency forms being Bitcoin and Ethereum.

Cryptocurrency is popular among the younger crowd and those who are involved in the decentralized finance community. However, it is far more commonly used in investments, than it is as a business payment method.

Bank Transfers

Bank transfers as alternative payment methods include ACH payments and wire transfers used to cover purchases.

ACH transactions process over an electronic computer network known as the Automated Clearing House (ACH) network to help merchants save on processing costs and provide a secure, convenient customer experience.

One of the biggest pros of accepting ACH payments is the fact that ACH payments and bank transfers typically cost less than debit or credit card payments and are typically free to your customers.

Wire transfers are electronic payments made between two different banks. Using wire transfers, individuals may send payments that surpass the $100,000 daily send limit on ACH transfers.

Buy Now, Pay Later

Buy Now, Pay Later options allow customers to pay a portion of their bill upfront and enter into an installment loan agreement with a lender. Offering Buy Now, Pay Later as an alternative payment method may encourage customers to make big-ticket purchases by lowering the purchase’s entry cost.

Additionally, despite the program’s name, merchants still receive the full purchase amount upfront when a customer uses Buy Now, Pay Later as a payment option.

There are currently many very popular Buy Now, Pay Later providers, including Klarna, Afterpay, Affirm, PayPal Pay In 4, Sezzle, and Zip.

Promotional Or Loyalty Program Payments

Promotional or loyalty programs may allow customers to accumulate points or credits that can be used to pay for a business’s goods or services — in a transaction, those points or credits are considered an alternative payment method.

One of the most popular examples of using promotional credits as a form of payment includes using a business credit card to accumulate airline miles and cover travel costs.

Business owners have complete control over the execution of the reward programs they want to offer customers and can easily manage loyalty programs through their POS’s loyalty program feature, using specific software, or manually. Customers will sign up for the program and reap the rewards, it’s pretty simple.

The 8 Best Alternative Payment Methods

The best alternative payment methods are affordable, popular with customers, integrate with existing payment processing solutions, and secure. Our picks for the top alternate payment methods include PayPal, Venmo, Apple Pay, Google Pay, Affirm, Zelle, Square Cash App, and ACH payments.

PayPal: The Best Overall Alternative Payment Method

PayPal


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Pros

  • Free PayPal business account
  • Excellent eCommerce checkout options
  • Many integrations
  • Supports in-person and online payment acceptance

Cons

  • High processing fee
  • Doesn’t support high-risk industries
  • Recurring billing costs extra

Why We Chose PayPal As One Of The Best Alternative Payments For Small Businesses

PayPal earned the top spot as the best alternative payment method because its popularity, convenience, versatility, and feature set cannot be beaten. When you compare PayPal’s functionality to some of the other alternate payment methods, such as Click To Pay or Affirm, PayPal vastly outperforms the competition.

Merchants can sign up for a free PayPal business account to gain access to PayPal’s extensive eCommerce software suite, including integration options that can bring PayPal to your brick-and-mortar POS or online store as an alternative payment option.

PayPal’s reach is extensive, with millions of users across the US and millions more internationally. As PayPal serves as a digital wallet, P2P payments facilitator, and offers a convenient contactless payment option, its versatility makes it a valuable solution for businesses and their customers alike.

PayPal Pricing

If you are using PayPal as a supplemental payment option, then you may have to pay additional fees depending on the payment processor or POS system you currently use. Additionally, you may have to pay PayPal’s processing fees, which come in at 3.49% + $0.49 when using PayPal’s digital payment methods.

PayPal also offers paid plans that start at $5/month for those businesses that want more advanced payments management.

PayPal Features

PayPal’s features are extensive, as the company boasts software and services that span the payment processing and eCommerce market. However, we’ll be focusing on PayPal’s features as an alternative payment method. So, here’s a look at PayPal’s features:

  • Smart payment buttons that change based on the transaction’s contextual details
  • Additional security with customers signing into their PayPal account before payment
  • Tons of integrations with in-person POS and eCommerce software
  • Extensive developer tools for businesses with online shops
  • Support for multiple payment types and multiple currencies, including Apple Pay, Bitcoin, Venmo, and more
  • Supports near field communication (NFC) technology for contactless payments
  • Built-in PCI compliance at no extra cost with PayPal Checkout
  • Completely free business account option with no monthly or hidden fees
  • Instant transfer options for fast payouts
  • Ability to use PayPal for nonprofits with donation-specific tools

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Venmo: Best Alternative Payment Method For Sole Proprietors Offering In-Person Services

Venmo


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Pros

  • Free, customizable Venmo business account
  • Low per transaction fee
  • Mobile payment acceptance
  • Social feed provides free marketing for businesses

Cons

  • Customers must have a Venmo account
  • Transaction limits may be restrictive for larger businesses
  • Limited functionality beyond payment acceptance
  • No FDIC protection

Why We Chose Venmo As One Of The Best Alternative Payment Methods

We chose Venmo as one of the alternative payment options because we think that Venmo works especially well for those businesses providing in-person services, such as photography, makeup application, or barber services. These businesses tend to start off as side hustles with friends and family serving as first customers, so Venmo payments work exceptionally well here.

Venmo is exceptionally simple to set up, and if you already have a personal Venmo account, you can simply add a business profile to your account in a few clicks. Venmo can also be added as an option to an existing Braintree or PayPal account for online purchases, though you’ll end up paying higher processing fees.

However, we don’t recommend Venmo for more established businesses or those accepting primarily online payments, due to Venmo’s transaction limits, higher fees for online payments, and no support for sales tax.

Venmo Pricing

Venmo’s payment processing fees are 1.9% + $0.10 per transaction using the Venmo app or a Venmo QR code. Online payments using Venmo have a higher processing cost at 3.49% + $0.49 per transaction. Additionally, you may be required to upgrade your account with your current processor to begin accepting Venmo payments.

Venmo Features

Compared to the other options on this list, Venmo’s features as an alternative payment method are very limited for merchants. However, Venmo can easily handle payment acceptance in person, offers some customization options, and even offers tipping. Here’s a more in-depth look at Venmo’s features:

  • Simple sign-up for existing and new Venmo users
  • Optional QR payment acceptance
  • Accept online payments with Venmo through PayPal or Braintree
  • Contactless payments and quick payments via mobile phone
  • Option to turn on tipping
  • Free, customizable business profile to show off your brand
  • Payments to your business may show up in your customer’s feed as free marketing to their friends
  • Predictable processing costs

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Square Cash: Best Alternative Payment Method For Businesses Already Using Square

Square Cash App


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Pros

  • Seamless integration with the Square product suite
  • Easy to use
  • Accept both credit and debit payments
  • No transaction limits for verified accounts

Cons

  • Challenging to maintain personal and business Cash App accounts
  • Limited functionality beyond payment acceptance

Why We Chose Square Cash As One Of The Best Alternative Payment Methods

We chose Square Cash App for business as one of the best alternative payment methods because it offers an accessible and convenient alternative payment method for businesses that are already within the Square ecosystem.

Cash App for businesses lacks the robust feature set that is usually expected of Square, but serves its purpose well enough. If you use Square Cash to accept payments from customers, you’ll make it easy for them to pay your business from their Cash App digital wallet or Cash balance.

The Square Cash App includes notable processing limits, which means merchants who process lots of high-ticket transactions should consider other alternative payment solutions. Since Square Cash’s support team is separate from Square’s standard support, this app is also poorly suited to merchants new to setting up and using alternative payment methods for their customers.

Square Cash App Pricing

Sending cash for personal use is free with Square Cash, although merchants pay a 2.75% fee per transaction and a 1.25% (min. $0.25) fee on instant deposits sent to their bank accounts.

Square Cash Features

Square Cash App’s features are limited for merchants, but make it easy to accept and manage customer payments. You’ll be able to offer Square Cash App as an online and in-person payment option (provided you already use Square and have compatible hardware or software). Here’s a look at Square Cash App’s features as an alternative payment method for businesses:

  • Credit and debit card payment acceptance
  • Verified business accounts can accept an unlimited number of payments
  • Allow customers to pay via QR code or payment link
  • Create custom cash tags to bolster your business’s brand
  • Accept Square Cash App payments without a Square Cash App account via Square’s hardware or software
  • Leave notes on transactions to track purchases from within the app
  • Fundraise with Square by accepting payments via Cash App

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Zelle: Best Alternative Payment Method For Free Bank Transfers

Zelle


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Pros

  • Free bank transfers
  • FDIC insured transactions
  • Supports contactless payments

Cons

  • Customers must have Zelle
  • Doesn’t support international payments
  • Variable bank fees and limitations

Why We Chose Zelle As An Alternative Payment Method

We chose Zelle as one of the best alternative payment methods because it offers free and fast bank transfers, even for business-to-business (B2B) transactions. We think it’s a great option for start-up businesses that need to quickly process low-volume payments or eCommerce businesses that are looking to keep payment processing costs as low as possible.

However, Zelle does have some limitations. Merchants can’t receive any funds sent from a debit or credit card to their Zelle account, which makes Zelle a less-than-perfect option for very small businesses and micro-merchants that thrive off individual, repeat customers.

If you’re running a business that mainly relies on credit cards for payments, this isn’t the app for you. Consider alternatives like Venmo, which lets merchants send, receive, and request funds using credit cards.

Zelle Pricing

Zelle is completely free for business use and doesn’t charge a single fee. In rare cases, your bank may charge fees, but those won’t be coming from Zelle.

There is some concern that Zelle will eventually begin charging for its services, but that has yet to come to fruition.

Zelle Features

Zelle offers fast and reliable bank transfers for both businesses and customers alike. However, like many of the alternative payment options on this list, it’s limited and should only be used as a supplemental payment option. Here’s a breakdown of Zelle’s features:

  • Receive funds from completed transactions almost immediately
  • Send and request payments via Zelle mobile app, supporting bank apps, email, or phone number
  • FDIC-insured transactions
  • Business accounts are supported by many popular US banks, including BofA, Citi Bank, USAA, Capital One, and more
  • Contactless payment support

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Apple Pay: Best Digital Wallet For Apple Users

Apple Pay


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Pros

  • Can be used to accept online and in-person payments
  • Full featured digital wallet
  • Excellent cybersecurity features
  • Apple doesn’t charge merchants to use Apple Pay

Cons

  • Requires NFC-capable card reader or iPhone
  • Limited to Safari browsers
  • Customers must use Apple products to use Apple Pay

Why We Chose Apple Pay As An Alternative Payment Method

We chose Apple Pay as one of the best alternative payment methods because it is one of the most feature-rich digital wallets on the market and is natively built into the Apple ecosystem.

As Apple Pay serves as a means to store card information, transit tickets, event passes, coupons, and a cash balance, accepting Apple Pay allows merchants to provide customers with many different payment options without too much hassle.

As for popularity, it’s hard to beat Apple, especially in the US market. Apple Pay is built into Apple devices, allowing customers to use it from compatible iPads, iPhones, Apple Watches, and Macs.

We’re not going to get into the Apple vs. Google debate here. When it comes down to it, both Google Pay and Apple Wallet offer virtually the exact same services and features, with the biggest difference being their native operating systems.

Apple Pay Pricing

Apple does not charge merchants any fees to use Apple Pay, however, merchants using Apple Pay will be on the hook for their payment processor’s fees depending on whether the transaction utilizes a debit or credit card.

Apple Pay Features

As one of the most popular digital wallets in the world, Apple Pay offers a comprehensive feature set for both businesses and their customers. Here’s a look at what Apple Pay can do:

  • Top-notch security features, including tokenization
  • Contactless payments support
  • Supported by major payment processors, including Square, Stripe, PayPal (via integration) and more
  • Integrate with accounting software via your payment processor to easily track Apple Pay transactions
  • Accept payments with your iPhone using a compatible mPOS app

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Google Pay: Best Digital Wallet For Android Users

Google Pay


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Pros

  • Works on Android and iOS devices
  • Excellent security features
  • Google Pay is free to use for both merchants and customers
  • Google Pay API and developer tools for eCommerce businesses

Cons

  • Requires NFC-capable card reader or iPhone
  • Limited bank support

Why We Chose Google Pay As An Alternative Payment Method

We chose Google Pay as one of the best alternative payment methods for small businesses because of its extensive global reach, robust functionality as a digital wallet, and excellent security features.

Google Pay, similar to a full-featured digital wallet, allows customers to store their credit cards, debit cards, cash, and loyalty cards in one place. It’s especially useful across the web, providing users with easy access to their payment methods during eCommerce transactions.

Google Pay really stands out as a secure solution. Google Pay safely stores card information which it encrypts using tokenization technology. Merchants who use Google Pay don’t need to worry about storing customer card info on their own system and can reduce the risk of fraudulent charges and chargeback claims.

Similar to Apple Pay, Google Pay is free to use for merchants and requires an NFC card reader.

Google Pay Pricing

Google Pay doesn’t charge merchants any fees to use, but merchants are still required to pay the processing fees charged by their payment processor.

Google Pay Features

Google Pay’s functionality as a digital wallet allows customers to easily make purchases online and in-person, using their Android device or Google account online.

Here’s a look at all the things Google Pay can do as an alternative payment method:

  • Allow customers to store and manage multiple payment methods, including debit and credit cards
  • Solid security features, including tokenization
  • Google Pay API and Google Pay website button options
  • Free Google Pay acceptance stickers
  • Make online checkout faster with Google Pay’s payment Autofill features
  • Google Pay is supported by multiple payment processors, including Chase Merchant Services, Stripe, Square, Helcim, and more

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ACH/eCHeck: Best For Low-Cost Recurring Payments

ACH


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Pros

  • ACH payments are popular with customers
  • Inexpensive recurring payment support
  • Secure payments
  • Support for same-day processing

Cons

  • Variable processing fees
  • Processing times can be slow

Why We Chose ACH As An Alternative Payment Method

We chose ACH as one of the best alternative payment methods because we believe it offers solid versatility for merchants who rely on subscription products and services, recurring online payments, eCommerce payment options, and electronic invoicing.

ACH/eCheck payments are also great for merchants who conduct business largely online and want to avoid credit card interchange fees.

ACH and eCheck payments offer convenience but fall short when it comes to speed. These payments are slow compared to other payment types since they need to travel from one point across the ACH network to another.

Merchants also need to verify that their payment service provider offers ACH options in the first place since ACH/eCheck payments are less prevalent than traditional credit card payments.

ACH Pricing

Costs to start using ACH/eCheck payments vary depending on your ACH payment provider; certain processing companies impose relatively high per-transaction fees, while others charge low per-transaction fees but high monthly fees.

ACH Features

ACH payment acceptance is relatively simple.

  • ACH payments are relatively secure
  • Support for payment automation and recurring payments
  • Relatively lower fees than traditional credit card processing and paper check deposits
  • Same-day processing options
  • Many banks don’t limit ACH processing for businesses
  • ACH payment processing is supported by major payment processors, including Stripe, Square, PaymentCloud, National Processing, and Host Merchant Services

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Affirm: Best Buy Now, Pay Later Alternative Payment Method

Affirm


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Pros

  • Most adult customers in the US are eligible for Affirm
  • Multiple integration options and an API
  • No monthly, integration, or annual fees
  • Customers are never charged late fees

Cons

  • High transaction cost
  • Doesn’t support international payments

Why We Chose Affirm As An Alternative Payment Method

We chose Affirm as one of the best alternative payment options because it’s the best Buy Now, Pay Later service provider on the market.

When customers choose to use Affirm, they are signing up for a short-term loan that is handled by Affirm. You receive the full cost of the transaction upfront, minus your transaction fees.

Affirm provides your customers with more spending power and reduces the upfront costs they pay for larger purchases.

While Affirm charges merchants a high per transaction fee, there’s no doubt that Affirm’s services could result in a significant increase in sales — which is a more than fair trade-off.

Affirm integrates with payment processors and eCommerce platforms, such as Shopify, Stripe, BigCommerce, WooCommerce, Magento, Lightspeed, and many more.

Affirm Pricing

Affirm charges merchants a merchant discount rate (MDR) and a transaction fee, which varies based on your business’s size, assessed risk profile, and the Affirm program you choose.

Affirm states that its typical fee is 5.99% + $0.30 per transaction.

Affirm Features

Affirm offers basic features for merchants, but this helps to keep things simple. Here’s a look at Affirm’s best features:

  • Merchants can control loan terms and minimum qualifying spend
  • Customer eligibility is limited to being 18 years old, having an SSN, and having a US phone number with SMS capabilities
  • Affirm integrates with top payment processors and eCommerce platforms
  • Affirm only performs a soft credit check for customers, so it won’t hurt their credit
  • Affirm can be used in-store and online
  • No late fees for customers

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Our Methodology For Choosing The Best Alternative Payment Methods For Small Businesses

In selecting the best alternative payment methods for small businesses we researched 15 of the most popular alternative payment methods available, and selected the ones that performed best according to the following criteria:

  • Security: We selected only alternative payment methods that offered secure transactions for both merchants and customers.
  • Affordability: Cost was a major consideration in determining the best alternative payment methods, we elected options that wouldn’t break the bank for small businesses who are already paying for payment processing.
  • Popularity: Following the basic economic principle of supply and demand, we looked for alternative payment methods that are popular with consumers. The more popular an alternative payment method is, the more likely it is that your customers will use it.
  • Features: Some options on our list are more feature-rich than others, but each option offers the essentials needed to make paying more convenient for both your customers and your business.
  • Ease Of Use: Alternative payment methods should be easy to use because their primary function is to make paying as easy as possible for customers. However, we also believe that alternate payment methods should be easy to use on the merchant’s end, too.
  • Integrations: Alternative payment methods are meant to be supplemental in most cases, so we selected options based on how well they could integrate with a business’s existing payment processing solution.

Why We Don't Recommend These Alternative Payment Methods For Small Businesses

We selected the best alternative payment methods according to our methodology was designed to provide recommendations that offered the most value and benefits for small businesses. Here’s why we don’t recommend AliPay, cryptocurrency, or Click To Pay as one of the best alternative payment methods for small businesses.

AliPay: Very Niche Market, Government Restrictions, & Poor Processor Partnership

While AliPay is the most popular payment platform in the world, we don’t recommend it as an option for US-based small businesses.

AliPay has partnered with Fiserv (formerly First Data Merchant Services) to extend AliPay’s services to US-based merchants and their customers. We do not believe that Fiserve is a good fit for small businesses.

Additionally, AliPay is most popular in China, with very limited consumer adoption in the US due to strict signup requirements. Very recently, AliPay has started allowing users to sign up for AliPay with a non-mainland China-based bank account, so adoption could pick up. However, this change was primarily made to aid foreigners visiting China’s virtually cashless society, rather than to expand AliPay’s adoption in the US.

Further, AliPay’s use has previously been restricted in the US, due to security concerns between the US and China. While this has also been overturned recently, the combination of all these issues means that we can’t recommend AliPay as one of the best alternative payment methods.

However, for some small businesses, especially those serving a customer base that is almost exclusively Chinese tourists in the US, offering AliPay as a payment option could make sense and help boost your business’s customer base through the convenience factor alone.

Cryptocurrency: Too Much Volatility & Very Limited Adoption

We don’t believe that now is the time for small businesses to be accepting cryptocurrency as an alternative payment option. Of the 33+ million businesses across the US, only about 2,300 or 0.006% of businesses accept cryptocurrency payments. In short, cryptocurrency isn’t a payment method that customers expect or use to the point of generating significant demand.

Further, due to the volatility of cryptocurrency rates, the need for specialized cryptocurrency payment gateways to simplify cryptocurrency acceptance, and the additional hassle of calculating taxes for cryptocurrency payments, we don’t recommend adopting cryptocurrency as an alternative payment method at this time.

However, there are a few businesses that may benefit from offering crypto as an alternative payment option, such as businesses dealing in NFTs, marketing goods or services specifically to the decentralized finance community, or selling luxury goods or services.

If your business belongs to any of those categories, you may consider utilizing one of the best cryptocurrency payment gateways to simplify your business’s crypto acceptance, reduce the impact of price volatility, and aid in currency conversion.

Click To Pay: Not Convenient Or Competitive

It’s clear that Click To Pay was launched to help credit card companies compete with one-click checkout options offered by bigger names, such as PayPal, Apple Pay, or Google Pay.

While, at last count, over 10,000 merchants have signed up to enable Click To Pay options on their site, there’s no incentive for customers to sign up for Click To Pay when they are already using more recognizable, proven options like those listed above.

Further, to enable Click To Pay, customers must sign up after seeing the Click To Pay icon on a checkout page. They can also sign up on their credit card provider’s website, but the question remains — why would they?

As online shopping has exponentially grown in the past 20 years, shoppers already have their payment cards stored online or in digital wallets. Those who don’t aren’t likely to sign up for the same one-click payment services they’ve already been shunning for decades.

There’s no doubt that Click to Pay is an excellent payment solution offered by the consortium of major credit card providers in the US. However, the fact remains that Click To Pay isn’t an intuitive solution for consumers, popular, or particularly competitive.

Should I Add Alternative Payment Methods To My Business?

Pros

  • Helps to avoid high card processing costs
  • Makes checking out more convenient for customers
  • Can speed up in-person payments
  • Some APMs boast a greater emphasis on cybersecurity

Cons

  • Merchants may incur added processing costs
  • Overwhelming number of APMs to choose from
  • Additional administrative tasks for merchants

If you’re considering adding alternative payment solutions to your business, take the time to survey your customers about which alternative payment options they would like to see from your business. If it’s not possible to directly ask your customers about their payment preferences, consider your current customer base and how your business works.

For example, if you’re running a NYC deli with a bustling morning rush, adding Apple Pay or Google Pay to speed up transactions will cater to those customers who are in a rush and likely already using their digital wallets for things such as transit tickets.

If you’re selling custom furniture with a higher upfront cost, choosing a Buy Now, Pay Later option, such as Affirm, could make your offerings more affordable for your customers without you having to lower your prices.

However, if you run a small-town diner that primarily serves regulars who have been frequenting your businesses for years, it may be a case of not fixing what isn’t broken. Alternative payment methods are a convenience, not a necessity.

If you do choose to go the alternate payment method route, it can be pretty easy. Third-party processors such as Square and Stripe both offer a wide range of integrations and developer support, as well as in-person credit card readers so that you can offer your customers more ways to pay.

The Bottom Line On Alternative Payment Methods

Alternative payments allow your customers to pay you on their terms and can eliminate any barriers to entry that were caused by limited checkout payment options. However, businesses may incur extra costs by implementing alternative payment methods, so it’s essential to choose a payment processor that suits your business model and offers alternative payment methods.

Do your due diligence, including estimating the cost of adding an alternative payment method and surveying which alternative payment methods your customers are actually interested in using. Fortunately, the best payment processors offer plenty of alternative payment method options, integrations, and won’t drive up your processing costs.

Otherwise, you might consider looking into one of the best mPOS software options, since they tend to have built-in alternative payment method options, such as Apple Pay and Google Pay via NFC technology. mPOS software can offer an easy way to accept a range of payment methods without too much extra work.

Alternate Payment Methods FAQs

What are the most popular alternative payment methods?

The most popular alternative payment methods include digital wallets, such as PayPal, Apple Pay, and Google Pay. Cryptocurrency, bank transfers, “Buy Now, Pay Later” options, and loyalty program payments are also among the most popular alternative payment methods.

What are the different types of alternative payment methods?

In general, there are five alternative payment methods, including “Buy Now, Pay Later” options, digital wallets, bank transfer payments such as ACH, cryptocurrency, and loyalty program rewards

What's the difference between alternative payment methods and preferred payment methods?

With regard to payment processing, a preferred payment method is the default payment method a customer selects to be used when making a purchase, while an alternative payment method is any payment method that is not cash, credit, or debit.

Is PayPal an alternative payment method?

Yes, when customers use PayPal to cover transactions, they are using an alternative payment method in the form of a digital wallet. Digital wallets securely store customer’s payment information and allow customers to maintain a cash balance in their accounts.

Which is better Venmo or PayPal?

PayPal is a far more robust payment processing solution and digital wallet/P2P payment support than Venmo — so in general, PayPal is a better option than Venmo for payment processing and sending payments to friends and family.

However, Venmo is designed primarily for P2P payments and functions exceptionally well in that category, while PayPal is one of the Goliaths of the payment processing industry and owns Venmo, so the comparison is uneven to begin with.

In Summary: The 8 Best Alternative Payment Methods

  • PayPal:
    • Best overall alternative payment method
    • 3.49% + $0.49
    • Free PayPal business account to accept payments
  • Venmo:
    • Sole proprietors offering in-person services
    • 1.9% + $0.10 for in-person transactions
    • Free Venmo business profile via the Venmo app
  • Square Cash App:
    • Square users
    • 2.75% fee per transaction
    • No monthly fee for Square Cash App business account
  • Zelle:
    • Free bank transfers
    • Variable bank fees
    • Zelle is completely free (banks charge fees)
  • Apple Pay:
    • Digital wallet services for Apple users
    • Fees vary by payment processor
    • Apple Pay doesn't charge fees to use
  • Google Pay:
    • Digital wallet services for android users
    • Fees vary by payment processor
    • Google Pay is free to use for merchants and customers
  • ACH:
    • Best for low-cost recurring payments
    • Average processing costs range from $0.26-$0.50 per transaction
    • Few processing limits
  • Affirm:
    • Buy Now, Pay Later services
    • Variable transaction fees
    • Many integrations
Davina Ward

Davina Ward

Senior Staff Writer
Davina joined Merchant Maverick in 2022, covering small business payroll and accounting. She began writing for small businesses in 2018 and has since gained expertise in the SaaS industry. She earned her Bachelor’s of Arts in English Literature from SUNY Geneseo in 2018. She currently resides in New York.
Davina Ward
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