In emerging markets, what the world calls “alternative” is actually the norm. Payment behavior here is mobile-first, trust-driven, and shaped by infrastructure that evolved differently than in mature economies. Alternative payment methods (APMs) have become the backbone of digital commerce across Latin America powering more than half of all online transactions.

Why Alternative Payment Methods dominate emerging markets

In developed economies, credit cards and traditional banking rails are often the first choice. But in emerging markets, the story is different. Local APMs took the lead by solving real challenges: limited card penetration, cash-heavy economies, and consumers entering the digital world through mobile phones rather than bank accounts.

From QR codes to real-time bank transfers, APMs aren’t just an option—they’re the foundation of trust and financial inclusion.

Key drivers include:

• Mobile-first adoption: Smartphones are the entry point to financial services.

• Offline-to-online transition: Cash is digitized via vouchers and real-time transfers.

• Trust and transparency: Consumers prefer methods that align with familiar money habits.

Latin America

While cash is still widely used, Latin America is shifting towards alternative payment methods. Brazil’s PIX, introduced by the central bank, has become one of the region’s most successful systems, allowing individuals and businesses to make instant transfers at no cost.

At the same time, digital wallets such as MercadoPago, Nubank, and RappiPay are changing online and mobile commerce. Consumers who can’t access traditional banking are using digital wallets for everyday spending, bill payments, and e-commerce.

The region offers significant growth potential but also complexity. Regulations differ by country, currencies fluctuate, and consumer preferences vary widely. This makes local expertise essential for building a payment strategy that works at both regional and country levels.

Main types of Alternative Payment Methods

While each region has its own dynamics, APMs in emerging markets typically fall into these categories:

1. Real-Time Payments (RTPs)

Systems like Pix in Brazil, UPI in India, and SPEI in Mexico allow instant, low-cost transfers. They are now the backbone of person-to-person and merchant payments, far surpassing card usage in volume.

2. Bank Transfers

Widely used for utilities, subscriptions, and large purchases, bank transfers remain essential in markets like Colombia, South Africa, and Nigeria.

3. eWallets and SuperApps

Apps such as PicPay (Brazil) dominate in everyday purchases—transport, food delivery, utilities—often topping 70% of digital payments in these industries.

4. Buy Now, Pay Later (BNPL)

With limited credit card access, BNPL fills the credit gap, enabling installment purchases for electronics, travel, and eCommerce.

5. Cash-Based Digital Payments

Vouchers like Boleto (Brazil), Efecty (Colombia) and OXXO (Mexico) connect offline cash spenders with online merchants, bridging two worlds.

Payment preferences by industry

Consumer behavior in emerging markets shows clear industry patterns:

• Gaming & Streaming → eWallets dominate with fast, embedded checkouts.

• Retail & eCommerce → Offline-to-online flows (cash vouchers, BNPL) remain strong.

• Ride-Hailing & Transport → Mobile wallets ensure real-time confirmation.

• Travel & Hospitality → Cards, BNPL, and bank transfers balance affordability and trust.

• SaaS & Subscriptions → Cards and tokenized APMs power recurring billing.

Each choice reflects fit, not just access—consumers select methods that align with how they earn, spend, and manage money.

Key takeaways for merchants and fintechs

• APMs are not “alternative” in emerging markets—they are mainstream.

• Cards remain essential in high-trust verticals like travel and SaaS, but coexist with local methods.

• Behavioral fit drives conversion. Payment success depends on aligning with how users already manage money.

• Ecosystems are evolving fast. APMs are becoming gateways to broader financial services.

For global merchants, fintechs, and financial institutions expanding into Latin America, understanding APMs is no longer optional—it’s the entry ticket to growth.

Payment strategies must go beyond infrastructure and focus on trust, relevance, and user behavior. The future of payments in emerging markets isn’t about replacing cards with APMs—it’s about building ecosystems where every method fits seamlessly into the way people already live, earn, and spend.