Local payment methods: No longer just an alternative

The concept of “alternative payment methods” was born from a world where cards and cash were the dominant payment methods. While many countries relied on traditional payment methods for in-store and later e-commerce purchases in the 1990s and 2000s, the rise of local options in countries and regions over the past two decades has steadily transformed the payments landscape. 

Now, local payment methods (LPMs) dominate e-commerce in some of the world’s largest markets. What was once considered niche is now, for many markets, the primary way consumers prefer to pay. LPMs are no longer alternatives; they are mainstream. 

LPMs > APMs 

Globally, around 80% of e-commerce purchases are projected to be made using digital payment methods by 2030, including local payment methods across bank transfers, digital wallets, and Buy Now, Pay Later (BNPL). Research shows that in India, China and Brazil the preference for digital wallets and bank transfers is up to 68%, 86% and 57% respectively for consumers shopping online; and in Europe the same goes for 61% of German consumers and 78% of Dutch consumers. 

As of 2025, WeChat Pay boasted over 1.2 billion active users, making it one of the most widely used payment platforms in China, with 85% of Chinese consumers using the digital payment service. Alipay, another major player in the Chinese payment landscape, has over 1.4 billion users globally, having expanded its reach beyond China to offer services in various international markets. 

With over 400 payment methods globally, the payments landscape is increasingly fragmented. This diversity is driven by the need to meet local consumer demand, which in turn fuels innovation.

India payment method breakdown

[{"label":"E-Wallet","value":"64"},{"label":"Card","value":"25"},{"label":"Bank Transfer","value":"4"},{"label":"Cash","value":"4"},{"label":"BNPL","value":"3"}]

India payment method breakdown

China payment method breakdown

[{"label":"E-Wallet","value":"84"},{"label":"Card","value":"9"},{"label":"Cash","value":"4"},{"label":"BNPL","value":"4"},{"label":"Bank Transfer","value":"2"}]

China payment method breakdown

Netherlands payment method breakdown

[{"label":"Bank Transfer","value":"67"},{"label":"E-Wallet","value":"11"},{"label":"Card","value":"11"},{"label":"BNPL","value":"10"},{"label":"Cash","value":"2"}]

Netherlands payment method breakdown

Brazil payment method breakdown

[{"label":"Card","value":"39"},{"label":"Bank Transfer","value":"34"},{"label":"E-Wallet","value":"16"},{"label":"Cash","value":"3"},{"label":"BNPL","value":"1"},{"label":"Crypto","value":"1"}]

Brazil payment method breakdown

Consumer preference drives adoption 

Consumers prefer payment methods that make everyday transactions simple and convenient. In the Netherlands, iDEAL exemplifies this as a fast, instant way to pay via online banking. With providers such as PPRO, iDEAL can also be used for recurring payments, making subscription billing quick and seamless.

8.8 million Swedish consumers use Swish because it’s heavily embedded into products, systems, and services that Swedes use every day. Alongside accessibility, payment methods also flourish when they provide a great user experience.

Merchant benefits of LPMs

For merchants, this presents a unique opportunity to capitalise on the popularity of LPMs. By integrating these methods into their payment strategies, merchants can unlock a host of benefits that can drive business growth. Here are some key advantages of adopting LPMs:

• Reduced chargebacks and fraud – Many LPMs do not carry chargeback risk, particularly those that are based on bank transfers, thanks to the added security that comes from multi-factor authentication. Therefore, merchants can reduce financial and operational costs by processing volume through LPMs.
• Customer acquisition – Merchants are able to add new customers to their user base by offering their preferred payment methods. By removing the friction that can arise from trusted payment methods or currencies being absent from the checkout, users can transact with confidence. This can be particularly impactful for subscription businesses that are entering into longer-term relationships with their customers. With the subscription economy set to be worth $1 trillion by 2028, more and more local payment schemes are introducing native recurring functionality, including BLIK (Poland), Bancontact (Belgium) and TWINT (Switzerland).
• Decreased cart abandonment – Offering preferred local payment options can significantly reduce cart abandonment rates. When consumers see their preferred payment method at checkout, they are more likely to complete the purchase, enhancing conversion rates and boosting sales. Checkout conversion rates can decline by up to 10% if a consumer’s preferred way to pay isn’t available.  

Local considerations on all fronts

While the adoption of LPMs enables access to a huge share of consumers, businesses must navigate several considerations to successfully integrate these methods into their payment strategies, such as:

• Regulatory compliance – One of the primary challenges in adopting LPMs is navigating the complex regulatory landscape. Each country has its own set of regulations governing payment methods, data protection, and financial transactions. Working with a partner with deep experience and expertise in different markets eases the burden for Payment Service Providers (PSPs) and merchants looking to add LPMs.
• Technological integration – Integrating LPMs into existing payment systems can be technologically demanding. Businesses need to ensure that their platforms can support various payment methods, including updating point-of-sale systems, e-commerce platforms, and backend processes to accommodate different payment types. Additionally, businesses must ensure seamless integration to provide a smooth user experience, which can be challenging when managing multiple payment providers. 
• Cultural and consumer preferences – Understanding and catering to local consumer preferences is crucial for the successful adoption of LPMs. Payment methods that are popular in one region may not be favored in another. Businesses must conduct thorough market research to understand the preferences and behaviors of their target audience. This involves tailoring marketing strategies, user interfaces, and customer support to align with local expectations. 
• Operational complexity – Offering multiple payment methods can add operational complexity to businesses. This includes handling different currencies, facilitating cross-border transactions, and managing varying settlement times. Efficient processes and systems to overcome these complexities and ensure smooth operations are key. 

To grow global, think local. 

A fragmented LPM market can cause complexity, but local payment methods are no longer the alternative; they are the preferred methods in many regions. So, understanding and integrating them into the payment mix is critical for businesses aiming to expand internationally. Catering to local preferences builds customer satisfaction, increases conversion and authorisation rates, and helps businesses grow in diverse markets.

Where ‘alternative’ payment methods were once an optional add-on to a business’s payments strategy, local payment methods are now a core component to business growth.

Connect with us at Money20/20 Europe

If you’d like to learn more about how PPRO helps businesses grow by letting customers pay local, come and see us at Money20/20 Europe.

You’ll find us at The Ultimate Local Payments Hub, stand #1A60, where we’ll be joined by some of Europe’s leading local payments schemes, including Bancomat, BLIK, Floa, and Wero.