What Is an Alternative Payment Method? Top Methods 2025

Payment choices for online purchases are more diverse than ever, with Canadian businesses and global payment systems adapting rapidly to meet evolving customer expectations. Alternative payment methods are not just trendy add-ons; they’ve become a strategic part of a merchant’s payment processing and customer experience.

Understanding Alternative Payment Methods

Alternative payment methods refer to ways to pay that go beyond traditional credit and debit cards. Their history dates back to early digital wallets and mobile payment platforms, but today’s landscape includes real-time bank transfers, money transfers, buy now pay later (BNPL) options, and more. Alternative payment methods offer flexibility and help businesses tailor their payment strategy to reach a broader audience.

Types of Alternative Payment Methods in 2025

• Pay by bank (e.g., Interac e-Transfer®) for payments from bank accounts
• Digital wallets like Apple Pay and Google Pay for secure mobile payment and online transactions
• BNPL (Buy Now, Pay Later) programs such as Klarna, Afterpay, and Affirm
• Prepaid cards and vouchers for privacy-focused or unbanked users
• Cryptocurrency is used for some online purchases and global payments, though not yet mainstream
• QR code payments and open banking—a growing area in Canada, expected to enable more real-time payments soon

Why Offer Alternative Payment Methods?

Expanding your payment systems to offer alternative payment methods is crucial for several reasons:

• According to a 2023 Bank of Canada report, 58% of Canadians use payment methods such as Interac e-Transfer.
• Mobile payment habits are accelerating; over 37% of Canadians use digital wallets on their phones for everyday purchases.
• BNPL solutions attract customers looking for flexibility, driving higher average order values and sales.
• Customers expect seamless, secure, and real-time online payment experiences, increasing satisfaction and reducing cart abandonment.

Pros of Alternative Payment Methods

• Reach more customers: Appealing to the “un-carded” and mobile-first generation.
• Reduce costs: Bank transfers typically have lower fees than card details processing, improving margins.
• Less risk of chargebacks: Pay by bank is irrevocable, avoiding costly disputes.
• Enhanced trust: Familiar options such as Interac and PayPal boost brand credibility.
• Better customer experience: Giving users choices and enabling instant or scheduled payments makes shopping smoother.

Cons to Consider

• Integration effort: Not all payment systems are plug-and-play, and setup may require extra work.
• Coverage limitations: Some payment methods focus on local markets, so businesses need broader global payment options for cross-border sales.
• Variable fees and settlement: BNPL and some wallets may have higher charges or slower payouts than real-time bank transfers.
• User familiarity: Some older customers may be less comfortable with mobile payment or digital wallet options.

Spotlight: Interac e-Transfer Pay by Bank

Interac e-Transfer is Canada’s leading bank transfer solution for instant, secure online payment from a customer’s bank account—no card details required. Providers such as Clik2pay bring a lot of value through Interac e-Transfer for eCommerce and a variety of industries. Payments are processed in real time, lowering processing fees and providing a frictionless payment strategy for both merchants and consumers.

Key Takeaways for Businesses

• A robust payment strategy should offer alternative payment methods alongside cards to maximize reach and improve the online payment experience.
• Popular alternative payment methods in 2025 include bank transfers, mobile payments, digital wallets, and BNPL services.
• Providers such as Clik2pay make it simple to integrate preferred methods like Interac e-Transfer into your eCommerce platform for secure, real-time transactions.
• Ultimately, offering alternative payment methods is about improving customer experience, increasing conversions, and future-proofing payment processing for a global audience.