Voice of the Industry

The unexpected results of changing APM acceptance rates

Thursday 10 November 2022 08:30 CET | Editor: Raluca Ochiana | Voice of the industry

Julie Fergerson and Leo Parrill of MRC reveal the drivers of APM adoption and the most popular payment methods among merchants.


As ecommerce continues to expand in almost every market, it’s no surprise that alternatives to traditional payment methods continue to proliferate. Innovation is a critical component of staying competitive and offering new ways to pay continues to be a strong draw for new customers, and an effective tactic for merchants to increase revenue. 

While experimentation with payment methods has always been an integral component of ecommerce, the last decade has seen explosive expansion in the Alternative Payment Method (APM) space. The COVID-19 pandemic and associated lockdowns also caused a substantial increase in the volume of new consumers, which further accelerated the adoption of APMs.

As APM offerings become more ubiquitous, it’s interesting to examine which payment methods merchants are choosing to adopt, and why. This data provides clarity into the present and potential future of payment acceptance in global ecommerce markets.

The drivers of APM adoption

To begin, it’s useful to understand why merchants might move toward accepting new payment methods in the first place. 

Data from the 2022 Payments and Fraud Report released by the MRC, Cybersource, and Verifi, provides important insights supplied by 1,060 surveyed ecommerce merchants across a variety of locations and verticals, at the end of 2021. These metrics offer a robust and compelling portrait of merchant behaviour over the last year.

The survey results contained in the report point to considerations such as improving the customer experience, researching new customer segments, facilitating access to new markets, and a continued move toward mobile payments, as important drivers behind the increase in new payment method acceptance. The data also highlights which alternative payment methods merchants are adopting, and why. 

Most popular APMs among merchants

According to the report, the fastest-growing payment methods among merchants globally were third-party payments (e.g., cryptocurrency), Buy Now, Pay Later (BNPL), digital wallets, and mcommerce solutions. Most merchants currently accepting these methods added them in the twelve months prior to responding to the survey.

Third-party payments like cryptocurrency had significant growth, with 30% of merchants now accepting cryptocurrencies, and 22% of those merchants implementing acceptance in the last twelve months.  

Several market segments, such as gaming, are seeing significant transaction volume move toward cryptocurrency, bolstered by the proliferation of NFT marketplaces, and blockchain-powered experiences. While the future of cryptocurrency is still somewhat opaque due to the difficulty of identity verification and an unclear regulatory future, the number of merchants now accepting cryptocurrency continues to rise. That trend is likely to continue.

BNPL also saw significant growth in adoption, to 29% acceptance, with 21% of those merchants adding BNPL options in the past twelve months. The continued expansion of these short-term financing contracts is due to a variety of factors, one being popularity among Millennials and Generation Z who tend to be more debt-averse than their older counterparts. Another is that BNPL contracts provide short-term credit to those that are underbanked or don’t have access to more traditional credit offerings like credit cards.

BNPL does present unique risks to merchants, including concerns about future regulatory requirements, default liability, currency exchange rate fluctuations, and other potential issues. However, there are significant advantages as well. Average order value tends to increase when customers use BNPL, as consumers can spend more on an individual purchase than they might otherwise. BNPL increases revenue for merchants, and it’s well-loved by an important segment of the market.

Understanding the fundamentals of BNPL is highly recommended for anyone looking to capitalise on the unique advantages these short-term financing agreements provide.

Addition not replacement

Though APMs clearly offer value to customers and merchants, there are still significant benefits to merchants utilising traditional payment methods, especially those that are advantageous for their specific product or vertical. 

According to the 2022 Payments and Fraud Report, nearly 9 in 10 merchants still encourage customers to use the merchant’s preferred payment method. They do this by actively promoting the preferred methods during checkout, offering or pre-selecting preferred methods prior to the payment selection page, and by providing incentives for customers to steer them toward a specific payment type.

There are several reasons merchants might prefer accepting traditional payment types over new APMs. One is lower fraud risk due to the merchant having the experience, infrastructure, and fraud mitigation strategy built out to support acceptance. This familiarity might also result in higher conversion rates due to optimization that has likely already been implemented, as well as expedited availability of funds and lower processing costs achieved by relying on trusted and familiar processing partners.

APMs are here to stay, but it’s also clear that traditional payment methods aren’t going anywhere anytime soon.

APMs moving forward

Paying close attention to merchant adoption of Alternative Payment Methods provides compelling insights into how the payments industry might change over the next few years. 

It’s clear from the 2022 Payments and Fraud Report that APMs aren’t necessarily a replacement for traditional payment methods. As more merchants accept options like BNPL and cryptocurrency, however, the coming years could very well bring continued shifts in payment acceptance rates, customer behaviours, and payment technologies that lead to the traditional payment paradigm evolving in unexpected directions. 


This article was first published in Payment Methods Report 2022, the most updated overview of trends and developments in the payment methods space and the innovative technologies that these methods work upon, emerging consumers habits, and strategies on how to win at conversion and retention.

About Julie Fergerson and Leo Parrill 

Julie Fergerson, CEO of the Merchant Risk Council, has 25+ years of experience developing, delivering, and promoting Internet-based technologies. 

Leo Parrill has extensive experience with content marketing and copywriting in the payments, technology, and gaming industries. 



About the Merchant Risk Council 

The MRC is a global community connecting ecommerce fraud prevention and payments professionals through educational programs, online community groups, conferences, and networking events. As a non-profit organization, the MRC is headquartered in Seattle, Washington, but embraces members from across the globe.

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Keywords: payment methods, ecommerce, alternative payment method, APM, BNPL, NFT
Categories: Payments & Commerce
Companies: MRC
Countries: World
This article is part of category

Payments & Commerce


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